LEGAL BASIS OF INTERNAL AUDIT OF FINANCIAL ACTIVITIES OF LOCAL GOVERNMENTS
Journal Title: «Приватне та публічне право» - Year 2017, Vol 3, Issue
Abstract
At the current stage of development of local self-government in Ukraine, the importance of controlling the effective use of local budgets and property of joint ownership of territorial communities of villages, settlements, cities of territorial communities is increasing. Internal audits are usually carried out in the budget sphere and are far away for local budgets and enterprises. An important component of the overall problem of improving the implementation of internal control and audit by local self-government bodies is the almost complete absence of its methodological support, which leads to theoretical and practical gaps. The basic basis for the effective and qualitative performance of the internal audit service is the instructions (guidelines) that determine its organizational and methodological aspects. It is expedient to develop them on the basis of existing regulations, considering the conditions of functioning of the territorial community, its organizational structure, the number of communal enterprises, and the volume of the local budget, taking into account the qualifications of specialists and the availability of material and technical base. The functioning of the internal audit service of the local self-government body (territorial community), subject to compliance with the requirements for ensuring its existence at the legislative level, its organization and methodology, is a reliable guarantee of full, objective and unbiased control over the receipt and use of funds from the local budget, the effective use of property territorial community, prevention of unreasonable and illegal actions of employees of enterprises, institutions and organizations of the territorial community, identification of reserves improved the economic activity of business entities, reducing the risk of adopting inappropriate and ineffective management decisions. The current situation can not meet neither the needs of the territorial community nor the expectations of society. Therefore, one of the ways of reforming the system of internal financial control is further development of internal independent control in the area of municipal resources management, which includes the definition of goals, objectives, functions of internal audit and ways of their achievement. Each local self-government body (territorial community), having created internal control, will be able to solve its specific tasks, have its objects audited and act according to common methodological and organizational principles. It is extremely important to distinguish between methodological reasons, that is, to eliminate the duplication of the main functions of the controlling and treasury bodies, the audit bodies of the main spending units and the functions of internal control of the local self-government body while exercising control over the legality of the budget process. The lack of appropriate coordination leads to duplication of checks, parallelism in work, dispersal of control efforts and, as a result, their activities are not comprehensive. Implementing joint activities will promote a comprehensive approach and in-depth analysis. Inclusion in a single system of internal control and audit created by the local self-government body of internal control and audit will automatically increase its role, where it will clearly identify its place, which will give a real opportunity to purposefully influence the financial policy of the territorial community. Taking into account the above-mentioned preconditions for the formation of internal financial control, it is advisable to carry out its problems in the following areas: the formation of common conceptual foundations of the organization of internal financial control, based on the current conditions for the reform of the system of local self-government and the creation of territorial communities; creation of a single legal field for the development of internal control and audit of local self-government bodies (territorial communities) and legislative consolidation of control functions; introduction of internal audit standards in the national legal framework; development of methodological recommendations and unification of procedural provision of internal audit; recognition of the profession of internal auditor; establishment of qualification requirements; development of training programs and qualification improvement of the internal auditor.
Authors and Affiliations
І. В. Козачок
Keywords
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