Since the 1940's, most Government agencies have established an internal audit department, and Congress has officially endorsed the concept through legislation. Many improvements in these organizations have occurred, particularly in moving toward operational audits from simple financial audits. The tremendous increase in Federal services and Federal assistance to State and local governments has been accompanied by a demand for good internal auditing to ascertain that funds are wisely spent and effectively administered. The GAO has noted that top management does not always pay enough attention to internal audit reports. The agency is also concerned that its role is not sufficiently understood, as evidenced in a recent television news report which inaccurately stated that GAO did not evaluate operations for efficiency or test for fraud. GAO has made many cost-effectiveness studies, including evaluations of Department of Defense long-range plans to consolidate or relocate certain activities. Proposed legislation will expand GAO's responsibilities in this area by requiring the agency to have experts available who can assist congressional committees with cost-effectiveness studies. Acquiring and retaining a highly professional staff continues to be a critical problem for GAO. Internal auditors also need expertise in electronic computer techniques, and GAO has initiated a project to establish an accelerated training program for all Government auditors. Internal audit teams could also benefit from the services of experts such as economists or engineers hired on a consultant basis. No references are included.