This document details the purposes and principles of community audits and presents guidelines for designing and conducting a community audit to assess a local community's workforce development needs and resources. Section 1 presents an overview of the U.S. Department of Labor's Community Audit Project and explains the following key steps in launching a successful community audit: defining the goals; building the stakeholder partnership; determining the scope; selecting methods and an approach; finding the resources; utilizing the resources; and determining the products. Section 2 explains the following techniques for conducting a baseline community audit: defining the geographic scope; finding the data; analyzing the demand side; analyzing the supply side; mapping the community's assets; and determining who should conduct the research. Section 3 discusses the following specialized community audits and techniques: sector and cluster analysis; detailed occupation and skill analysis; mapping career ladders; vacancy surveys, identification of skills shortages; use of rapid response and job developers; and business visitation programs. Section 4 explains how to use the following tools and strategies to tailor community audits to support local strategies: employing/reemploying a target population; sectoral strategies; layoff aversion strategies; employer-focused training; high roads strategies; community career ladders; and skills standards. (MN)