Ohio Performance Team

What is a Performance Audit?

Performance audits examine the efficiency and effectiveness of government programs and functions with the goal of making them better. While financial audits determine if public funds are spent legally and managed in accordance with accounting principles, performance audits examine if funds are spent wisely and if programs achieve their intended purpose.

The principles guiding performance auditing are often called the “Three Es”:

• - ECONOMY means keeping the cost low.
• - EFFICIENCY means getting the most out of available resources.
• - EFFECTIVENESS is meeting the objectives or goals of the program.

Performance audits, like financial audits, are conducted in three phases: planning, fieldwork and reporting. Reports are written to be accessible to both government officials and taxpayers; the data is often presented visually to make the data more meaningful to all readers.

Performance audits are collaborative and require the participation of the organization being audited. Each audit is tailored to the client and may include a range of subject areas. They may review the overall operations of an entire entity or just a single department. They can also examine a function or service that cuts across operations or a single issue that involves several departments.

Staffing and employee compensation, program results, contract management, transportation systems, and facility and asset utilization are all areas commonly included in a performance audit. Results may identify cost savings, duplicative or underused services that could be reduced or eliminated, and gaps and overlaps in services.

A performance audit can be used by any government seeking to improve operations, identify cost savings and produce sustainable, balanced budgets.