Regulation 45 — Audit Regulations 2020
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.
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.