Financial Auditing as a Prelude to Program Evaluation

The evolution of GAO capability for conducting program effectiveness reviews is outlined. GAO movement into effectiveness auditing has been prompted by the activities of the executive branch and the needs of Congress. Although the idea of program evaluation was not new in business or in government, its application as a direction in auditing was unique. The GAO policy of developing effectiveness auditing has two guiding principles: (1) evaluation is the natural function of program managers and their agencies, and feedback on effectiveness must be accomplished primarily by those involved in the management process; and (2) effectiveness studies must be tied to more traditional audit work since economy, efficiency, and effectiveness are inextricably linked in most operations. Since 1977, GAO audit work is divided into three separate categories: (1) audits and evaluations of results of ongoing programs oriented primarily to effectiveness in terms of outcomes of what is now happening; (2) analyses of costs and benefits of alternative approaches oriented to problems of the future and probable implications of different options for meeting them; and (3) special studies, a potpourri of work that fits nowhere else, including studies of methodology, new techniques, surveys for internal planning purposes, and others.