The aim of performance audit is to provide information on efficiency of dispose of state and local government funds and administration of property. During this audit the auditors review the economy, efficiency and productivity of the operations of the audited entities.
Each performance audit can focus on one or several aspects of performance audit (economy, productivity of efficiency). Economy, efficiency and productivity is clearly illustrated by the investment-product model.
During evaluation of economy the main aspect of interest is reduction in usage of resources, i.e. performance of activities with the lowest possible costs meanwhile also retaining the quality. Economy actually means preserving low costs by assessing if a certain goal is being achieved by using as less means as possible.
When evaluating productivity the main aspect of interest is the proportion between investments and the end product, i.e. during the audit it is reviewed whether the resources necessary for reaching goals of certain operations are obtained by providing an optimal proportion between investments and the end product, or whether the same result could be achieved by using less resources, and whether by using the same resources a better result could be achieved. Productivity actually describes rationality of usage of available resources by evaluating whether the utilised resources provide an optimal yield.
Productivity is measured by comparing similar activities, activities performed in other time periods or by comparing them with applicable standards.
During evaluation of efficiency the main focus is on proportion of the planned goal to the result, i.e. the degree of having reached the stated goals. Actually the efficiency is the ability to reach the stated goals.