Audit of the use of budget funds in public sector institutions as an instrument of financial control

Abstract

Abstract. The purpose of this study is to provide a conceptual and applied clarification of the role of public funds audit as a key instrument of financial control aimed at ensuring the legality, efficiency, and economy of the use of public resources within budgetary institutions. The research focuses on preventing the misuse of funds and minimizing inefficient expenditures through formalized audit procedures that integrate compliance verification with budget legislation, assessment of the soundness of managerial decisions, and identification of risks associated with public procurement and contract performance. The paper examines how the results of public sector audit influence the management cycle, from detecting deviations in pricing, breaches of spending limits, and deficiencies in documentary support to correcting internal control procedures and improving financial administration practices. The methodological framework is based on general scientific methods of analysis and synthesis, comparative legal analysis of regulatory acts, and examination of financial reporting data interpreted through an institutional approach, which enabled the systematization of established public audit practices and the identification of mechanisms through which they affect financial discipline and transparency of cash flows. The findings demonstrate that the audit of budgetary funds performs not only a control function but also a significant preventive role, as it ensures early detection of violations, traceability and reproducibility of financial transactions, and identification of the root causes of recurring errors related to weaknesses in documentation and internal control systems. It is substantiated that the proper implementation of audit procedures reduces the likelihood of duplicate payments, limits off-standard expenditures in time, enhances consistency between primary documentation and financial reporting, ensures correct application of budget classification codes, and stabilizes reporting timelines. Collectively, these effects strengthen financial discipline and increase public trust in the management of state finances. The practical significance of the study lies in the possibility of applying its results to improve accounting procedures, internal control mechanisms, and tax and reporting support within the public sector, in accordance with the principles of legality, efficiency, and accountability of public expenditures.