ONE ELEMENT OF SUCH AUDITS IS FINANCIAL EXAMINATION AND EVALUATION OF COMPLIANCE. FINANCIAL ANALYSES ARE TO BE MADE IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS. THE AUDITOR IS ALSO EXPECTED TO DETERMINE WHETHER A GRANTEE HAS COMPLIED WITH LAWS, STATUTES, AND REGULATIONS WHICH STIPULATE HOW FUNDS ARE TO BE USED. A SECOND ELEMENT OF SUCH AUDITS IS EVALUATION OF ECONOMY AND EFFICIENCY. THIS INVOLVES ASCERTAINING WHETHER GOVERNMENT-FURNISHED RESOURCES ARE BEING MANAGED OPTIMALLY. THE AUDITOR IS EXPECTED TO ADVISE ON HOW SPECIFIC PROCEDURES, METHODS, OR ACTIVITIES CAN BE MADE MORE ECONOMICAL. THIS ENTAILS DETERMINING IF CATEGORIES OF EXPENDITURES WERE NECESSARY, IF DUPLICATION EXISTS, IF PROCUREMENTS ARE MADE IN ECONOMICAL ORDER QUANTITIES, IF INVENTORIES ARE AT THE MOST ECONOMICAL LEVELS, AND IF EQUIPMENT IS OPERATED EFFICIENTLY. EVALUATION OF PROGRAM RESULTS IS A THIRD ELEMENT OF THE AUDIT. THIS CONSISTS OF ASSESSING THE DEGREE TO WHICH SPECIFIED GOALS ARE REACHED, WITH PROPER REGARD FOR COSTS. TO ASSIST THE AUDITOR, MEASUREABLE EVALUATION CRITERIA AND MEANS OF GATHERING DATA FOR SUCH MEASURES SHOULD BE INDICATED BY LEGISLATORS OR IMPLEMENTING AGENCIES AND PROMULGATED BY DECISIONMAKERS. ON THE WHOLE, ACCOUNTING INFORMATION IN FEDERALLY-ASSISTED PROGRAMS DOES NOT HAVE THE QUALITY FOUND IN PRIVATE BUSINESS IN PART BECAUSE AUDITS MAY BE CONDUCTED SEVERAL YEARS AFTER A GRANT IS MADE. FURTHER, AUDITORS HIRED BY THE GRANTEE OFTEN FIND IT DIFFICULT TO REPORT TO THE FEDERAL GOVERNMENT ABOUT PROGRAM INADEQUACIES AND IRREGULARITIES, AND AUDITORS EMPLOYED BY THE GOVERNMENT OFTEN DO NOT RECEIVE COOPERATION. FOOTNOTES ARE PROVIDED. (RCB)