A government scheme can be reviewed in three ways. A performance audit by the CAG asks whether the scheme was economical, efficient and effective. A social audit asks the people the scheme serves to check records against what they saw. A scheme evaluation asks whether the scheme achieved its intended outcomes. They use different evidence and answer different questions.
Last reviewed: 17 October 2026. Facts checked. We opened the cag.gov.in page for CAG's Auditing Standards, 2017, and ran searches on Section 17 of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Audit of Schemes Rules, 2011 (results were state government portals, a parliamentary library file and explainer sites, not the Act or Rules themselves). We did not search for or open any government evaluation framework, so the scheme evaluation column is a general description, not a citation. We discuss no specific scheme's audit findings.
The three methods at a glance
| Performance audit | Social audit | Scheme evaluation | |
|---|---|---|---|
| Who does it | The CAG's audit offices | Community, through a body independent of the implementing agency | Usually a commissioned evaluator or the sponsoring department |
| Main question | Economy, efficiency, effectiveness | Do the records match what happened on the ground? | Did the scheme achieve its intended outcomes? |
| Evidence | Records, data, site visits, criteria | Records read out and checked with beneficiaries | Surveys, outcome data, comparison groups |
| Output | Findings and recommendations to the legislature | Findings raised in a public forum | A report to the sponsor |
The last column on scheme evaluation is a general description, not tied to a particular government framework.
Performance audit
CAG's Auditing Standards, 2017 describe performance audit as examining whether interventions, programmes and institutions operate with economy, efficiency and effectiveness, measured against suitable criteria. It analyses the causes of deviations and offers recommendations. It is essentially a direct reporting engagement and is not normally expected to give an overall opinion.
For a scheme, typical questions are:
- Did the money reach the intended places on time?
- Were the works or services delivered at reasonable cost?
- Did the intended results follow?
Results go to the legislature in the CAG's reports. See how CAG reports are prepared and audit types compared. The difference from an internal operational review is in performance audit vs operational audit.
Social audit
A social audit is done with the people a scheme is meant to reach. Searches on MGNREGA found these points:
- Section 17 of the Act makes social audit a statutory requirement, with the Gram Sabha conducting regular social audits of projects.
- Under the Audit of Schemes Rules, 2011, each State is to identify or set up an independent Social Audit Unit, either a society or a directorate, independent of the implementing agencies.
- A Gram Panchayat is to have at least one social audit every six months.
These come from state portals and explainers, so check the Act and Rules for the exact wording. Our post on social audit: meaning, types and process goes further.
The key idea is simple: records are tested against lived experience. If muster rolls say a worker was paid, the worker is asked.
Scheme evaluation
Evaluation looks at outcomes and impact. It asks whether the scheme did what it set out to do, for whom, and at what cost per result. Evaluators often use surveys and outcome data. The sponsoring department or an outside agency commissions the work.
Because we did not open any official evaluation guidance, treat this as a general description. Check the framework that applies to your scheme.
How they differ in practice
- Audit tests delivery. Was the process followed and the money well used?
- Social audit tests honesty of records. Does paper match reality?
- Evaluation tests results. Did lives or services change?
A scheme can pass one and fail another. Spending can follow every rule and still miss its goal. Equally, a scheme can reach its goal with weak record-keeping.
Using them together
| If you need to know | Use |
|---|---|
| Whether rules were followed and money used well | Compliance or performance audit |
| Whether beneficiaries received what the records say | Social audit |
| Whether the scheme changed outcomes | Evaluation |
A scheme manager can plan for all three: keep clean records for audit, publish records for social audit, and collect outcome data for evaluation from the start.
What reviewers look at in all three
- A clear statement of scheme objectives.
- Sanction orders and guidelines.
- Beneficiary lists and how they were chosen.
- Fund flow from release to spend.
- Reports and utilisation certificates. See utilization certificate format.
Frequently Asked Questions
What is a performance audit of a scheme?
An examination of whether a scheme operates with economy, efficiency and effectiveness, measured against suitable criteria and reported with recommendations.
Is social audit the same as a CAG audit?
No. A social audit is done with the community through a body independent of the implementing agency. A CAG audit is carried out by the Indian Audit and Accounts Department and reported to the legislature.
How often is a social audit under MGNREGA done?
Explainers say at least once every six months in each Gram Panchayat. Check the Audit of Schemes Rules, 2011 for the exact provision.
What does scheme evaluation measure?
Whether the scheme achieved its intended outcomes. It usually uses survey and outcome data.
Can the same scheme face all three?
Yes. They answer different questions and can run side by side.
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