Performance audits contribute to public accountability and transparency by providing independent and objective analysis of the efficiency and effectiveness of government programs, operations, and activities. They provide findings, conclusions, and recommendations to assist management and those charged with governance and oversight with improving performance and operations, reducing costs, and making sound decisions.

The primary difference between a financial audit and a performance audit is that a financial audit expresses an opinion on whether management spent the organization’s funds the way they said they did, and a performance audit looks at whether the money was spent in the most efficient, economical, and effective manner. BART undergoes an annual financial audit that is conducted by a Certified Public Accounting firm. Financial audits are typically conducted annually, whereas performance audits look at a broad variety of topics and each topic is not required to be audited on any specific cycle.

We use laws, regulations, organizational policies and procedures, industry standards, expert opinions, terms of contracts and grant agreements, benchmarks, and leading practices as criteria against which to evaluate performance and make recommendations when we identify opportunities for improvement. Performance audits can benefit an organization by identifying, for example:

• Opportunities to reduce costs or increase revenues through operational improvements
• Programs, services, or activities that can be reduced, eliminated, or expanded
• Gaps or overlaps in programs, services, or activities
• Weaknesses in internal controls that can affect the organization’s ability to achieve its mission or increase the risk of fraud, waste, or abuse
• Unnecessarily restrictive laws, regulations, or policies
• Opportunities to increase transparency and accountability
• Opportunities to improve compliance with laws, regulations, contracts, grant agreements, and policies and procedures
• Leading practices that can be implemented to achieve better outcomes