Regulation 45 — Performance audit evaluates government programs an
Original Rule Text
# 45. Broad framework of Performance Audit
(1) Performance audit is carried out in accordance with the Auditing Standards, Performance auditing guidelines and other relevant orders issued by the Comptroller and Auditor General.
(2) Performance audit assesses:
(a) Economy – The principle of economy means minimising the costs of resources. The resources used should be available in due time, in and of appropriate quantity and quality and at the best price.
(b) Efficiency – The principle of efficiency means getting the most from the available resources. It is concerned with the relationship between
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resources employed and outputs delivered in terms of quantity, quality and timing.
(c) Effectiveness – The principle of effectiveness concerns meeting the objectives set and achieving the intended results, especially in terms of outputs and outcomes. For example, expenditure on health schemes/ programmes such as NHM should lead to the intended outputs of having hospitals/ CHC etc, having the desired number of hospital beds etc; it should also have the outcomes as intended and/or stated such as delivery of effective health schemes.
(3) Performance Audit, therefore, is concerned with the audit of economy, efficiency and effectiveness in receipt and application of public funds. Comptroller and Auditor General’s function to carry out examinations into the efficiency and effectiveness with which the Government uses it resources is inbuilt in the Comptroller and Auditor General’s DPC Act.
(4) In keeping with Regulation 5(3), Performance Audit focuses on inputs, processes, including planning and preparedness, (for example disaster preparedness etc), outputs, outcomes (for example learning outcomes in school education) and results. The analyses in Performance Audit is distinct from, and goes beyond, compliance issues, and seeks to provide new information, analysis or insights on the actual benefit of the activity undertaken by the entity. Where appropriate, the impact of the regulatory, institutional or operational framework on the performance of the audited entity or subject matter of Performance Audit should also be taken into account as part of Performance Audit.
What This Means
Performance audit evaluates government programs and operations against three principles: Economy (minimizing input costs — getting resources at the right quality, quantity, time, and best price), Efficiency (maximizing outputs from available resources), and Effectiveness (achieving the intended objectives, outputs, and outcomes). It goes beyond compliance checking to provide new insights on whether public funds actually delivered the intended benefits. Performance audit also considers the impact of the regulatory, institutional, and operational framework on the entity's performance.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Three core principles: Economy (minimize costs), Efficiency (maximize output from resources), and Effectiveness (achieve objectives)
- 2Conducted per CAG's Auditing Standards and Performance Auditing Guidelines
- 3Focuses on inputs, processes (including planning and preparedness), outputs, outcomes, and results
- 4Goes beyond compliance issues to provide new analysis and insights
- 5Considers the regulatory, institutional, and operational framework's impact on performance
- 6CAG's authority for efficiency and effectiveness audit is inherent in the DPC Act
Practical Example
The CAG conducts a performance audit of the Mid-Day Meal Scheme in a State. Economy: Were food grains procured at competitive rates? Efficiency: How many meals were served per rupee of expenditure compared to the national average? Effectiveness: Did the scheme actually improve school enrollment and nutrition outcomes as intended? The audit finds that while procurement costs were reasonable (economy met), only 60% of enrolled students received meals (efficiency gap), and malnutrition rates did not decline in the target areas (effectiveness failure).
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between outputs and outcomes in performance audit?▼
Does performance audit only look at spending or also at program design?▼
Is the CAG's authority for performance audit different from financial audit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.