IN RESPONSE TO A REQUEST FROM THE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, THE GENERAL ACCOUNTING OFFICE REVIEWED THE FEDERAL TRADE COMMISSION'S FISCAL CONTROLS OVER ITS PUBLIC PARTICIPATION PROGRAM. AS REQUESTED, THE REVIEW DETERMINED WHETHER AUDITS OF THE PROGRAM HAVE BEEN MADE IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS AND WHETHER AUDITED PARTICIPANTS HAVE MADE REFUNDS FOR DISALLOWED EXPENDITURES. FINANCIAL AUDITS WERE MADE OF SOME UNAUDITED PARTICIPANTS WHO RECEIVED MORE THAN $50,000 (ALSO SOME THAT RECEIVED LESS THAN $50,000). REVIEW WORK WAS DONE AT THE FEDERAL TRADE COMMISSION'S HEADQUARTERS IN WASHINGTON, D.C., AND AT PROGRAM PARTICIPANTS' OFFICES IN SAN FRANCISCO, CLEVELAND, AND WASHINGTON, D.C. PROGRAM RECORDS WERE EXAMINED, AND PERSONNEL WERE INTERVIEWED. THE REVIEW COVERED THE PERIOD FROM THE PROGRAM'S START IN FISCAL YEAR 1976 THROUGH JUNE 30, 1979. THE AUDIT OF PROGRAM EXPENDITURES AND EFFORTS TO COLLECT AMOUNTS DISALLOWED IN THE AUDIT WERE GENERALLY SATISFACTORY. HOWEVER, INTERNAL AUDITING OF THE PROGRAM CAN BE MADE MORE EFFECTIVE BY INCREASING THE SCOPE OF THE AUDITS TO INCLUDE PERIODIC REVIEWS OF FEDERAL TRADE COMMISSION DETERMINATIONS OF PARTICIPANT ELIGIBILITY AND HAVING THE INTERNAL AUDIT FUNCTION REPORT TO A HIGHER AGENCY OFFICIAL, PREFERABLY THE CHAIRMAN. ALSO, PROGRAM ADMINISTRATION COULD BE STRENGTHENED THROUGH BETTER DIRECTION AND GUIDANCE TO PARTICIPANTS REGARDING ACCOUNTING FOR REIMBURSABLE COSTS INCURRED UNDER THE PROGRAM AND CLOSER ATTENTION TO FISCAL ACCOUNTING OF PROGRAM FUNDS. TABULAR DATA ARE INCLUDED. (AUTHOR ABSTRACT MODIFIED--RCB)