Impact of the activities of state audit bodies on the efficiency of budget management at the local level

Abstract

In the context of the increasing dependence of most regions of Kazakhstan on the republican budget, the problem of the effectiveness of interbudgetary relations is acquiring particular significance. There is a trend toward growth in the volume of subventions, an increase in the number of subsidized regions, and a decrease in the share of donor regions, which indicates a decline in the financial independence of local authorities. Consequently, the role of state audit bodies as a tool for enhancing the effectiveness of budget management at the regional level is becoming more prominent. The study employs an integrated approach, including analysis of the regulatory framework, comparative analysis of regional budget indicators, mathematical modeling of interbudget flows, construction of dendrograms, and correlation analysis. Data on transfer volumes in Kazakhstan's regions for 2023, along with visualized data from official statistics, serve as the empirical basis. Findings reveal that in 2023, only two regions transferred more to the republican budget than they received, while the remaining 18 regions were subsidized. The transfer ratio indicators demonstrated significant inequality, with some ratios exceeding 500-900 times. The share of subsidies in local budget revenues reached 37%, indicating a high level of dependence. Weak links were identified between the effectiveness of audit activities and the distribution of budget funds, particularly in subsidized regions. The current model of interbudgetary relations in Kazakhstan requires reform. Strengthening the role of the state audit should be accompanied by a systemic revision of transfer policies aimed at stimulating regions to develop their own revenue bases and adopt responsible financial management. The study's results can inform proposals for optimizing interbudgetary regulation mechanisms, improving legislation related to state audits, and developing effective strategies to enhance budget sustainability at the local level.