The Australian National Audit Office (ANAO)’s performance audit activities involve the independent and objective assessment of all or part of an entity’s operations and administrative support systems. Performance audits may involve multiple entities and examine common aspects of administration or the joint administration of a program.

Through this activity, the ANAO reports to the Parliament on areas where improvements can be made to aspects of public administration and makes specific recommendations to assist public sector entities to improve performance.

The ANAO assesses all aspects of the proper use of resources:

• effective (the extent to which intended outcomes are achieved);
• economical (minimising cost);
• efficient (maximising the ratio of outputs to inputs);
• ethical ; and/or
• legislative and policy compliance.

The purpose of this guide is to explain ANAO methodologies to help entities prepare for an ANAO audit. This edition is intended for officials within government entities responsible for governance, internal audit or a government activity that may be the subject of an ANAO performance audit.