FACTORS AFFECTING THE EFFECTIVENESS OF INTERNAL AUDIT IN BUDGET ORGANIZATIONS AND SYSTEMIC PROBLEMS

Abstract

The article analyses the factors affecting the effectiveness of internal audit in budget (public-sector) organizations and the related systemic problems. It examines the influence of the internal audit unit’s independence, competence and institutional status, the impact of the internal control environment, financial management quality and data reliability on the audit, and the weak points in action-plan implementation, monitoring and feedback. The empirical basis is the list of the most frequent violations by audit organizations published by the Ministry of Economy and Finance and the results of the Ministry’s evaluation of the internal audit services of five ministries in the first half of 2025. The analysis shows that, although institutional factors such as independence, resources and competence score high (87–95%), risk-based planning (47.8%) and action-plan implementation (62.6%) score low and constitute the systemic weak point of effectiveness. The article concludes with practical recommendations to improve effectiveness