Core Objective of Performance Auditing
Performance auditing, governed by ISSAI 300, is an independent, objective, and reliable examination of whether government undertakings, systems, operations, programs, activities, or organizations are operating in accordance with the principles of Economy, Efficiency, and Effectiveness (the 3 Es), and whether there is room for improvement.
Operational Metrics of the 3 Es Framework
Performance auditors analyze a public program by breaking its operational lifecycle into three measurable interfaces:
    [ INPUTS ] ───────────────► [ OUTPUTS ] ───────────────► [ OUTCOMES ]
         â–²                            â–²                            â–²
         │                            │                            │
  (1) ECONOMY                  (2) EFFICIENCY               (3) EFFECTIVENESS
  "Minimize Cost"              "Maximize Ratio"             "Achieve Goals"

1. Economy (Minimizing Input Costs)
Keeping the cost of resources used for an activity as low as possible while maintaining appropriate quality. Auditors ask: Did the government buy the necessary construction steel or medical supplies at the lowest available market price, or did it overpay due to poor market research?
 
2. Efficiency (Optimizing the Input-Output Ratio)
Getting the most out of available resources. It measures the relationship between inputs (money, labor, time) and outputs (completed public services or products). Auditors ask: Did the agency build the maximum number of highway kilometers possible given the budget provided? Is the administrative processing cost per passport application minimized? 
 
3. Effectiveness (Realizing Policy Outcomes)
The relationship between the actual outcomes achieved and the original intended policy objectives. It evaluates if the program achieved its real-world purpose. Auditors ask: Did building the new regional health center actually result in a reduction of localized disease transmission rates? Did the literacy program succeed in increasing adult employment? A program can be highly economical and efficient but remain completely ineffective if it fails to resolve the societal problem it was designed to fix.
 
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