## Types of Government Expenditure Audit

Government audit has multiple distinct components. The audit of expenditure checks that public funds are spent lawfully, efficiently, and for the intended purpose. There are five specific types, each addressing a different standard.

### The Five Types

Type	Core Question	Trigger Scenario
1. Audit Against Provision of Funds	Was there a budgetary provision authorised by competent authority?	Funds drawn from an account with no budgetary provision
2. Audit of Sanctions	Was there proper sanction (specific or general) from competent authority?	Payments processed without proper approval
3. Audit Against Rules and Orders	Does the expenditure conform to statutory provisions and financial rules?	Expenditure without following prescribed financial regulations
4. Performance Audit	Did the programme/project yield the expected results economically?	Large project with no assessment of whether expected benefits were achieved
5. Propriety Audit	Is the expenditure in line with broad principles of financial propriety?	Unnecessary spending not aligned with financial propriety

### Key Distinctions

Provision of Funds = existence of budget allocation.
Sanctions = existence of specific approval for the expenditure.
Rules and Orders = procedural compliance with financial regulations.
Performance Audit = value-for-money / outcome assessment.
Propriety Audit = broader public interest / prudence standard.

> Note: A single transaction can potentially attract more than one type of audit if it violates multiple standards.

Worked example

### Example 1

Scenario (RTP May 25): A government department allocated budget for infrastructure development. The auditor observes five situations. Match each to the applicable type of government audit:

(i) Payments processed without proper approval from competent authority.

→ Audit of Sanctions — checks that sanction (special or general) from competent authority exists for the expenditure.

(ii) Large project implemented with no assessment of whether expected benefits were achieved.

→ Performance Audit — checks whether programmes/schemes/projects are run economically and yield expected results.

(iii) Funds utilised from an account for which no budgetary provision was made.

→ Audit Against Provision of Funds — checks that a provision of funds authorised by competent authority exists before expenditure is incurred.

(iv) Expenditures made without following prescribed financial regulations.

→ Audit Against Rules and Orders — checks that expenditure conforms to relevant statutory provisions and financial rules/regulations.

(v) Unnecessary spending not aligned with financial propriety.

→ Propriety Audit — checks that expenditure is incurred with due regard to broad and general principles of financial propriety.

⚠️ Common exam mistakes

Confusing 'Audit of Sanctions' with 'Audit Against Rules and Orders' — sanctions relate to approval authority; rules relate to procedural compliance with financial regulations.
Mixing up 'Audit Against Provision of Funds' with 'Audit of Sanctions' — provision of funds = budgetary allocation exists; sanction = specific approval to spend it.
Thinking Performance Audit is about financial accuracy — it is about outcomes and value for money, not arithmetic.
Treating Propriety Audit as equivalent to legal compliance — propriety is a broader, principles-based standard (prudence, public interest) beyond mere rule compliance.

Reference:

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Types of Government Expenditure Audit – Sanctions, Performance, Propriety, Rules

Worked example

⚠️ Common exam mistakes