Beginning with a definition of an audit, the paper discusses how the scope of the traditional audit has expanded in response to the increasing size and complexity of State programs. Audit concepts are first categorized as financial and performance auditing, and performance is then divided into compliance, operational, and program auditing. The purpose of a compliance audit is to test controls that are designed to ensure adherence with management's rules and policies and to ascertain that management has fulfilled the judicial and administrative requirements prescribed for a program. Auditors must collect information on all regulations and policies and then evaluate the control system through appropriate techniques. Operational audits are concerned with the efficient use of public resources and proper conduct of government programs. With this objective, personnel and procurement practices may be reviewed. Useful techniques for operational audits include an onsite inspection of an operation, flow charts, and a systems analysis of a program's components. A program audit examines additional elements of the management control system, such as monitoring processes, and evaluates the reliability of data that documents program accomplishments. Because of lack of performance reports and standards, true program auditing is seldom done. These individual audit approaches have many common features and should be conducted under one comprehensive program that correlates all the evaluations and places the findings in proper perspective. The increased willingness of Federal agencies to rely on State and local audits should encourage the development of a comprehensive State audit system.