Page 314 - CA Final PARAM Digital Book.

(iii) Policy documents: Documents of Planning Commission, Ministry of Finance etc.
(iv) Academic or special research: Independent evaluations on the entity, academic research and
similar work done by other governments and other SAIs.
(v) Past audits: Past financial and performance audits of the entity provide a major source of
information and understanding.
(vi) Media coverage: Print and electronic media - their systematic documentation on regular basis
in a transparent manner.
(vii) Special focus groups: Audit Advisory Committee concerns, annual and special reports of World
Bank, Reserve Bank of India, reports by special interest groups, NGOs, etc.

QNO Performance Audit- Issues addressed Old Course-- (N15R, M16R, M16E, M17R, N18R, N18E, M20R, SM21)
600.000 TITANIUM CNO – PSU.160 New Course-- (SM23)
“A performance audit is an objective and systematic examination of evidence for the purpose of
providing an independent assessment of the performance of a government organization, program,
activity, or function in order to provide information to improve public accountability and facilitate
decision-making by parties with responsibility to oversee or initiate corrective action.” Briefly discuss the
issues addressed by Performance Audits conducted in accordance with the guidelines issued by C&AG.
OR
Write short notes on Issues addressed in Performance Audit of PSUs?
Answer According to the guidelines issued by the C&AG, Performance Audits usually address the issues of:

➢ Economy-
It is minimising the cost of resources used for an activity, having regard to appropriate
quantity, quality and at the best price.
Judging economy implies forming an opinion on the resources (e.g. human, financial and
material) deployed. This requires assessing whether the given resources have been used
economically and acquired in due time, in appropriate quantity and quality at the best
price.

➢ Efficiency-
It is the input-output ratio. In the case of public spending, efficiency is achieved when the output is
maximised at the minimum of inputs, or input is minimised for any given quantity and quality of
output.
Auditing efficiency embraces aspects such as whether:
• sound procurement practices are followed;
• resources are properly protected and maintained;
• public sector programmes, entities and activities are efficiently managed,
regulated, organised and executed
• efficient operating procedures are used;
• optimum amount of resources (staff, equipment, and facilities) are used in
producing or delivering the appropriate quantity and quality of goods or services
in a timely manner; human, financial and other resources are efficiently used;
• the objectives of public sector programmes are met cost-effectively.

➢ Effectiveness-
It is the extent to which objectives are achieved and the relationship between the intended impact
and the actual impact of an activity.

In auditing effectiveness, performance audit may, for instance:
• assess compliance with laws and regulations applicable to the program; and
• assess whether the objectives of and the means provided (legal, financial, etc.)
for a new or ongoing public sector programme are proper, consistent, suitable or
relevant to the policy;
• identify factors inhibiting satisfactory performance or goal-fulfilment;
• assess the adequacy of the management control system for measuring,
monitoring and reporting a programme’s effectiveness;
• determine the extent to which a program achieves a desired level of program

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