Performance Audits
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GAO-03-673G Government Auditing Standards > Chapter 2 Types of Government Audits and Attestation Engagements > Performance Audits
2.09 Performance audits entail an objective and systematic examination of evidence to provide an independent assessment of the performance and management of a program against objective criteria as well as assessments that provide a prospective focus or that synthesize information on best practices or cross-cutting issues. Performance audits provide information to improve program operations and facilitate decision making by parties with responsibility to oversee or initiate corrective action, and improve public accountability. Performance audits encompass a wide variety of objectives, including objectives related to assessing program effectiveness and results; economy and efficiency; internal control; 1 compliance with legal or other requirements; and objectives related to providing prospective analyses, guidance, or summary information. Performance audits may entail a broad or narrow scope of work and apply a variety of methodologies; involve various levels of analysis, research, or evaluation; generally provide findings, conclusions, and recommendations; and result in the issuance of a report. (See chapters 3, 7, and 8 for standards and guidance for auditors performing a performance audit in accordance with GAGAS.)
2.10 Program effectiveness and results audit objectives address the effectiveness of a program and typically measure the extent to which a program is achieving its goals and objectives. Economy and efficiency audit objectives concern whether an entity is acquiring, protecting, and using its resources in the most productive manner to achieve program objectives. Program effectiveness and results audit objectives and economy and efficiency audit objectives are often interrelated and may be concurrently addressed in a performance audit. Examples of these audit objectives include assessing
a. the extent to which legislative, regulatory, or organizational goals and objectives are being achieved;
b. the relative ability of alternative approaches to yield better program performance or eliminate factors that inhibit program effectiveness;
c. the relative cost and benefits or cost effectiveness of program performance; 2
d. whether a program produced intended results or produced effects that were not intended by the program’s objectives;
e. the extent to which programs duplicate, overlap, or conflict with other related programs;
f. whether the audited entity is following sound procurement practices;
g. the validity and reliability of performance measures concerning program effectiveness and results, or economy and efficiency; and
h. the reliability, validity, or relevance of financial information related to the performance of a program.
2.11 Internal control audit objectives relate to management’s plans, methods, and procedures used to meet its mission, goals, and objectives. Internal control includes the processes and procedures for planning, organizing, directing, and controlling program operations, and the system put in place for measuring, reporting, and monitoring program performance. Examples of audit objectives related to internal control include the extent that internal control of a program provides reasonable assurance that
a. organizational missions, goals, and objectives are achieved effectively and efficiently;
b. resources are used in compliance with laws, regulations, or other requirements;
c. resources are safeguarded against unauthorized acquisition, use, or disposition;
d. management information and public reports that are produced, such as performance measures, are complete, accurate, and consistent to support performance and decision making;
e. security over computerized information systems will prevent or timely detect unauthorized access; and
f. contingency planning for information systems provides essential back-up to prevent unwarranted disruption of activities and functions the systems support.
2.12 Compliance audit objectives relate to compliance criteria established by laws, regulations, contract
provisions, grant agreements, and other requirements 3 that could affect the acquisition, protection, and use of the entity’s resources and the quantity, quality, timeliness, and cost of services the entity produces and delivers. Compliance objectives also concern the purpose of the program, the manner in which it is to be conducted and services delivered, and the population it serves.
2.13 Audit organizations also undertake work that provides a prospective focus or may provide guidance, best practice information, and information that cuts across program or organizational lines, or summary information on issues already studied or under study by an audit organization. Examples of objectives pertaining to this work include
a. assessing program or policy alternatives, including forecasting program outcomes under various assumptions;
b. assessing the advantages and disadvantages of legislative proposals;
c. analyzing views of stakeholders on policy proposals for decision makers;
d. analyzing budget proposals or budget requests to assist legislatures in the budget process;
e. identifying best practices for users in evaluating program or management system approaches, including financial and information management systems; and
f. producing a high-level summary or a report that affects multiple programs or entities on issues studied or under study by the audit organization.
1The term “internal control” in this document is synonymous with the term management control and, unless otherwise stated, covers all aspects of an entity’s operations (programmatic, financial, and compliance).
2These objectives focus on combining cost information with information about outputs or the benefit provided and outcomes or the results achieved.
3Compliance requirements can be either financial or nonfinancial in nature.
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