Performance audit is an independent assurance service that provides assurance on the performance of projects, programs, activities and functions in terms of economy, efficiency and effectiveness but also in respect of environment. The aim of a performance audit is to provide recommendations about where and how improvement can be made and to identify the likely impact they may have.
Performance audit objective
Performance audit objectives can vary, but the goal is to assess program effectiveness, economy, and efficiency; ensuring the presence of internal controls; compliance with laws, policies, and regulations; and prospective analyses. Performance audits may have more than one overall objective.
(a) The economy of activities in accordance with sound administrative principles and practices, and management policies;
(b) The efficiency of utilization of human, financial and other resources, including examination of information systems, performance measures and monitoring arrangements, and procedures followed by audited entities for remedying identified deficiencies; and
(c) The effectiveness of performance in relation to the achievement of the objectives of the audited entity, and the actual impact of activities compared with the intended impact.
(d) The environment means considering if the programs are managed with due regard to the effects on the environment while conducting an audit.
Performance audits may examine and report on:
a) the quality of information and advice available to the organization for the formulation of policy;
b) the existence and effectiveness of administrative machinery in place to inform the Organisation whether or not program objectives and targets have been determined with a view to fulfilling policy objectives;
c) if, and to what extent, stated program objectives have been met;
d) the economy, efficiency, effectiveness and ethics of the means used to implement a program/activity;
e) if laws and organization procedures have been complied with;
f) if internal procurement controls have been effective and transactions have been reported accurately; and
g) The intended and unintended direct and indirect impacts of programs/activities; for example, the environmental impact of the activity.
Performance Audit Process
A typical performance audit may involve various stages, and take an average of 6 to 9 months to complete, depending on the complexity and scope of the audit
