Abstract:

The main focus of this paper is the “municipal merger” or amalgamation component of the reform. The research question concerning how amalgamation of local communities in Ukraine affected their internal control facilities. We also look at the financial decentralization component of the reform, namely how has amalgamation affected practices of external financial control and audit in Ukraine. Broadly translated our findings indicate that is hard to estimate any dependence between the size of the local government bodies and the weakness of the internal control system. According to 2020 audit data it can be concluded that  in regions with low intensity of forming ATC the amount of ineffective management actions (decisions) is higher. The level of completion of the Accounting Chamber and the State Audit Office’s audit results in the previous period has a limited effect both on the weakness of the internal control system and non-compliance with the statutory regulations in local government bodies.