he conduct of performance audits is unique to government entities due to the nature of the services that governments provide. Performance audits can be used in several ways. First, such audits can provide information to assist government Managers on how well a government program is achieving its desired results. Performance audits can also be used to verify compliance with requirements of government programs.

Here's a good example. Over the past three years, I managed a performance audit of California's Job Creation Fund, a state Special Revenue Fund. The Fund was established in $2013$ pursuant to voter$-$passed Proposition $39,$ which imposed a tax on corporations. The proceeds of this tax was restricted to fund energy projects at K$-12$ schools, charter schools, and community college districts throughout the state. Such energy projects could take the form of more efficient lighting, solar energy, heating and air conditioning, and energy management systems, just to name a few. Another objective of the program was providing jobs to Californians during an economic downturn at that time. Districts that received funding from this Program for energy projects were expected to comply with Program requirements, which consist of various statutes in the state's Public Resources Code and applicable Implementation Guidelines issued by the California Energy Commission $($CEC$)$ and the California Community Colleges Chancellor's Office $($CCCCO$).$ The CEC and the CCCCO manage this Program for the State.

The Program passed by voters included the creation of The Citizen's Oversight Board $($COB$),$ an independent government body to oversee the Program, along with an independent annual audit requirement. The COB contracted with our office to conduct these engagements. The objective of our performance audit is to determine whether districts have complied with Program requirements covering the planning and implementation of energy projects funded by Program resources. To conduct these audits, we rely on standards for performance audits contained within Government Auditing Standards, as established by the Comptroller General of the United States. The standards are contained in a document commonly known as "The Yellow Book."

There are differences between the types of audits conducted and the standards that auditors use for each type. For example, standards for financial audits require auditors to determine whether financial statement amounts are free of material misstatement. They are tasked with providing an opinion $($assurance$)$ based on evidence gathered during the audit. In contrast, performance audit standards require auditors to assess the efficiency and effectiveness of program operations and$/$or agency compliance with requirements of government programs. To do that, the standards require that auditors obtain sufficient and appropriate evidence to support their findings and recommendations regarding the results of program operations and$/$or compliance with program requirements.

Attached to this post is a copy of the latest edition of the GAO's Yellow Book issued in $2018$ to assist you with the questions below.

Now $-$ imagine that you are conducting our performance audit. If you were the Audit Manager instead of me$,$ you would need to know certain things about conducting the audit according to standards. Some of what you would need to know and what you need to identify includes.....

$(1)$ What sections of the Yellow Book address evidence requirements for findings within performance audits?

$(2)$ How does the audit guidance provided there assist you in determining when the audit evidence you have gathered during a performance audit is considered to be sufficient and appropriate?