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ORGANIZATION AND CONDUCT OF INTERNAL AUDIT SERVICE
IN THE PUBLIC SECTOR
PhD, assoc. prof.
Shanasirova Nodira Abdullaevna
Tashkent State University of Economics
ORCID: 0000-0003-2158-8395
Abstract.
In the article, a study was conducted on the organization and implementation of
the internal audit service in the public sector. Based on the study of the current state of the internal
audit organization and foreign experience, suggestions and recommendations were made on the
implementation of the internal audit service in different foreign countries and the mechanism of
its operation in our republic.
Key words:
public sector, internal audit, cost, budget, financing, health system.
ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ СЛУЖБЫ ВНУТРЕННЕГО АУДИТА В
ГОСУДАРСТВЕННОМ СЕКТОРЕ
PhD, доц.
Шанасирова Нодира Абдуллаевна
Ташкентский государственный экономический университет
Аннотация.
В статье проведено исследование по организации и внедрению службы
внутреннего аудита в государственном секторе. На основе изучения современного
состояния организации внутреннего аудита и зарубежного опыта были выработаны
предложения и рекомендации по внедрению службы внутреннего аудита в разных
зарубежных странах и механизму ее функционирования в нашей республике.
Ключевые слова:
государственный сектор, внутренний аудит, стоимость,
бюджет, финансирование, система здравоохранения.
DAVLAT SEKTORIDA ICHKI AUDIT XIZMATINI TASHKIL ETISH VA JORIY ETISH
PhD, dots.
Shanasirova Nodira Abdullaevna
Toshkent davlat iqtisodiyot universiteti
Annotatsiya.
Maqolada davlat sektorida ichki audit xizmatini tashkil etish va joriy etish
bo‘yicha tadqiqot o‘tkazildi. Ichki audit tashkilotining bugungi holati va xorijiy tajribani o‘rganish
asosida turli xorijiy davlatlarda ichki audit xizmatini joriy etish va uning respublikamizda faoliyat
yuritish mexanizmi bo‘yicha taklif va tavsiyalar berildi.
Kalit so'zlar:
davlat sektori, ichki audit, xarajatlar, byudjet, moliyalashtirish, sog'liqni
saqlash tizimi.
UOʻK: 657.6
169-174
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Introduction.
Accounting of costs in health care institutions in world practice, allocation of costs to the
cost of services provided, accounting of resources, correct identification of factors causing
costs, optimization of costs related to clients, separate accounting for the time spent on surgery
and treatment and real resource consumption, operation (treatment) scientific on optimizing
the calculation of standard costs and operation (treatment) costs until preparation research is
being conducted. Currently, systematic studies are being conducted to optimize cost per patient
with coronavirus, to allocate costs between facilities, and to control costs.
In Uzbekistan, in recent years, extensive measures have been implemented on internal
audit, financial control and accounting in healthcare institutions. Controlling the formation and
spending of funds in healthcare institutions in our republic, the correct distribution of expenses
according to the calculation items, and the effective organization of audits are one of the main
issues today. Therefore, in organizations, the task of conducting "financial audit, which provides
for the assessment of accounting (budget) accounting, truthfulness of financial reports,
purposeful and legal use of financial resources, and the completeness of income, as well as the
legality of financial transactions"
14
is defined. This creates the need to improve accounting and
auditing of healthcare institutions.
Analysis of literature on the subject.
Organization and conduct of internal audit service in the public sector has its own
characteristics. Therefore, we try to reveal the nature of internal audit in budget organizations.
Jan Van Tynen, Andreevs (2011) "consider internal audit in the public sector as an activity
on a systematic approach to the evaluation of the internal control system and its effectiveness
in achieving the goal set by the head of the organization".
Ibragimov and Sugirbaev (2010) recognized the internal audit in budget organizations as
follows: "Internal audit is an objective activity, directed to the effective implementation of
internal control, reports being drawn up and recommendations for increasing the effectiveness
and efficiency of the budget organization's activities directed to doing".
Mehmonov (2018) defined the internal audit in budget organizations as follows: "Internal
audit is the verification of compliance with the legislation and monitoring of the preparation
and execution of estimates by the organization, ensuring the reliability of financial reporting
data, compliance with budget-estimate discipline. Is an activity aimed at purposeful and
rational spending of funds".
According to Toyinov (2018), "Internal audit in organizations financed from the state
budget means a system that objectively assesses the targeted spending of budget funds, the
legality of financial processes and the financial control system, and specializes in providing
professional advice on the reasonable planning and spending of the organization's expenses".
Research methodology.
Effective methods of analysis and synthesis, analytical analysis, and comparative analysis
were used in the course of scientific research. In our research, we tried to study the problem in
depth using the fields of comparative analysis and analytical analysis. The article compares the
scientific-theoretical views of economists on the organization and conduct of the internal audit
service in the public sector.
Analysis and results.
If we look at the international practice of organizing internal audit in the public sector, it
can be seen that this process is a separate direction. In countries with a developed market
14
"Measures for the further development of auditing activities in the Republic of Uzbekistan" Decree of the
President of the Republic of Uzbekistan, dated August 27, 2021, No. PF-6300, "Measures for the further
improvement of the state financial control system."
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economy, the Ministry of Finance takes the main place in the organization and methodological
support of the internal audit in the public sector. In particular, "Central Committee for the
Harmonization of Internal Audit (CHAI)" in order to strengthen the role of internal audit in the
establishment of public financial control in France. In France, internal audit committees operate
in ministries financed from the state budget" (Kolesnik, 2017).
In Great Britain, internal auditing in publicly funded organizations is developed by the
Internal Auditing Standards Advisory Board. A special feature of the development of these
standards is that they are based on the requirements set by relevant internal audit standard
setters. "Internal audit standard setters include the Public Institute of Public Finance and
Accountancy (CIPFA), HM Treasury, the Ministry of Health and the Ministry of Finance"
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.
In 2014, the "Rules for conducting internal financial audits" (Resolution, 2018), and in
2016 "Methodological recommendations for conducting internal financial audits" (Order,
2019) and several similar documents were developed by the Finance Department for
organizing internal audits according to the Budget Code of the Russian Federation.
In the Ministry of Health of our country, the formation and evaluation of the internal
control system is assigned to the internal audit service. The activity of the internal audit service
in the system is formed on the basis of the "Temporary REGULATION on Internal Audit and
Financial Control Service" approved on December 27, 2017 by the Ministry of Health of the
Republic of Uzbekistan.
The need to organize an internal audit in the system arose as a result of the adoption of
the decision of the President of the Republic of Uzbekistan dated August 21, 2017 No. In this
It should be noted that in recent years, large amounts of funds have been allocated from
the state budget to the social sector, including the health care system. As it happened all over
the world, in 2020-2021, the coronavirus pandemic Covid-19 caused serious problems for the
health care system in Uzbekistan. The increase in the number of patients and the deterioration
of the epidemiological situation led to the implementation of additional measures, the increase
in public spending on health in 2020, in many ways, the mobilization of additional resources to
fight against the coronavirus infection.
According to information, the funds allocated to the health care system from the state
budget for financing the health care system in 2020 amounted to 20,752.9 billion soums. In
2021, 21,047.8 billion soums were allocated to the industry, which is 1.1 times more than in
2020.
The increase in spending on the fight against the coronavirus infection did not affect the
amount of funds allocated for other health spending in 2021. The amount of funds allocated to
the health sector from the state budget amounted to 3.1% of GDP, and these costs were mainly
financed by local budgets
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.
The share of these funds in the state budget is significant, and it is important to control
the targeted spending of funds. That is why it is very important to properly organize financial
control methods, because the achievement of the final result and the effectiveness of control
depends on the correct choice of certain actions and tools by controlling entities. depends. On
the other hand, the adequate application of financial control methods and methods is
controlled, which allows not to interfere with the normal activities of economic entities.
guarantees compliance with the rights and legal interests of subjects.
"Internal audit - control and evaluation of their work by checking and monitoring
compliance with the laws, founding documents and internal documents of the Republic of
Uzbekistan by the executive div and structural units of the enterprise management, the
completeness and reliability of the information reflected in accounting and financial reporting
15
- Official website of the UK Internal Audit Standards Advisory Board.
16
Budget for Citizens: 2021 State Budget allocations for healthcare.
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of the structural division of the enterprise (internal audit service) on the implementation of
established rules and principles of implementation of economic operations, maintenance of
assets and principles of corporate management activity is understood" (Decree, 2006).
The introduction of internal audit activities depends, first of all, on the effective
organization of allocations from the budget and targeted and rational use of budget funds in
budget organizations. Today, there is a need to properly organize an internal audit service in
the healthcare system, which is our research object.
At this point, let's talk about the main requirements for organizing an internal audit,
namely:
•
retaining primary control rights in one person's hands;
•
claim the interests of the organization;
•
internal control compliance requirement;
•
the need for flexibility, continuity of development and improvement;
•
elimination of unnecessary steps in the verification process;
•
accountability requirement;
•
regulatory requirements;
•
control.
If we pay attention, in any case, the great responsibility for organizing the internal audit
service rests with the responsible person, that is, the auditor. In this regard, one should not
forget the activity of a person with such professional responsibility.
As we know, it is necessary to ensure that the internal audit activities are carried out in
accordance with the internal audit plan. The plan is developed by the responsible person, that
is, the auditor of the organization, and signed by the head of the organization.
It is necessary to ensure that the internal audit service has the following rights:
-
accounting of all documents, plans, registers, estimates and other documents on
financial activity;
-
monitoring the correctness of transactions in accounting;
-
study the territory of the enterprise, farm, service, warehouse, construction objects, etc.;
-
demand a full or partial inventory of assets and liabilities belonging to the organization,
if necessary, seal cash registers, special rooms where documents are stored, archives and other
places;
-
preparation of the organization for activities related to external audit and tax
authorities.
Also, the internal audit service will have to constantly monitor the status of accounting
and reporting within the framework of the current legislation, constantly check their
compliance with the interests of the organization, and if necessary, conduct its activities within
the scope of its service in court proceedings related to financial relations. In order to achieve
the objectives of the auditor responsible for the organization (the head of the internal audit
service), he must have the qualities of independence, impartiality, responsibility and
confidentiality" (Shanasirva, 2019).
First of all, independence, which means that each internal auditor must be independent
of his colleagues, including management. The internal audit department should be independent
and neutral in relation to the management levels at which decisions are made.
Impartiality When reporting on the results of an audit, the internal auditor must clearly
distinguish facts from suspicions.
Responsibility means that the internal auditor is ready to perform the work within the
scope of his ability and professional competence, and is not only responsible for his own
actions, but also means that he is ready to take responsibility for the shortcomings of the
internal audit div. Internal auditors should strive to continuously improve their professional
level, efficiency and quality.
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Confidentiality Internal auditors must exercise caution in the use of information obtained
in the course of their duties. They must not use confidential information for personal or other
purposes. In addition, they should not use official communications for their own personal
purposes. It should be noted that during the transfer of all documents related to the conduct of
inspections to the person authorized to make decisions, internal auditors shall not include
copies, drafts or any they should not store the information in any media outside the designated
places.
In the "Strategy of Actions" for 2017-2021 adopted by our government in our country,
many tasks are defined, which, in turn, requires improvement of legislation in all fronts in our
country.
In fact, in recent years, the existence of shortcomings in the organization of financial
control and internal audit services has shown its negative aspects. That is, it led to inefficient
use and looting of funds allocated by the state. In particular, 7 billion soums of looting was
committed in health institutions of Samarkand region, that is, medicines worth 9.256 billion
soums were bought for 14.902 billion soums, 5.643 billion soums at an expensive price"
17
. In
order to prevent such negative situations, many new regulations are being adopted. As we
mentioned above, the main goal of all measures is aimed at improving the socio-economic
status of the population.
the Republic of Uzbekistan is to increase the quality and efficiency of the correct use of
budget funds. determined by installation. Of course, constant monitoring will limit various
robberies and excessive spending in our country and will serve for the constant and stable
operation of financial and economic activities.
The internal audit service must constantly monitor compliance with the budget and
budget institution's accounting legislation.
The employees of the internal audit and financial control service annually improve their
skills in the prescribed manner, as well as in the control of budget funds, in terms of economic
accounting, and they must be given a document confirming that they have improved their skills.
Conclusions and suggestions.
Based on our research, we have formulated the following conclusions and suggestions:
-
the internal audit service in the health care system should provide services at the
expense of state budget funds and provide its conclusions on the provision of paid services. in
this case, not only the funds allocated by the state, but also in the provision of paid medical
services are not allowed to be looted.
-
the internal audit service must constantly monitor compliance with the legislation on
budget and budget institution accounting.
-
the employees of the internal audit and financial control service will improve their
skills in economic accounting and budget funds control every year, and they must be given a
document confirming their qualification.
-
it is expedient to organize the internal audit and financial control service under the
supervision of republican councils or public councils on the activity of health care institutions.
and at the same time as being accountable to this council, the council should also decide on the
hiring and firing of service employees.
-
in the internal audit program, it is appropriate to include a separate item on checking
the state of budget funds and extra-budgetary funds and their receipt and use, along with giving
a conclusion on it.
17
"People's Word" (online), January 5, 2020.
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Andreev, P.P. (2011) "Internal control and audit in the public administration sector and
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Decree (2006) "Regulation on Internal Audit Services in Enterprises" approved by the
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- Official website of the UK Internal Audit Standards Advisory Board.
Ibragimov A.K., Sugirboeva B.B. (2010) "Budget control and audit." Educational manual.
Info COM.Uz. LLC. –T.:
Kolesnik A.L. (2017) "Organization and methodology of conducting internal audit by
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Makhmonov S.U. (2018) "Improvement of the methodology of accounting and internal audit
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