Performance audit

Appropriateness is mentioned in the Act on the National Audit Office, and the NAOF has interpreted it to refer to performance. Appropriate financial management means that the state funds are used in an economic, efficient and effective manner.

The focus of performance audits

Performance audits focus on activities that involve significant use of state funds or have a substantial impact on the central government’s revenue, expenditure or assets. The audits are often targeted at activities carried out jointly by several government authorities. The audits may also be targeted at recipients of government grants or other financial support outside the central government.

Performance audits pay attention, for example, to

• operational planning
• organisational structures
• financial systems
• operational guidance and management
• operational results and impacts
• economic and operational efficiency.

Performance cannot always be assessed by means of an audit. In such cases, the audit assesses whether the financial management has provided adequate preconditions for economic, efficient and effective activities. Thus, the audits may focus, for example, on how well the activities are organised.