The Impact of the Performance of Audit and Control Institutions on the Economic Security of a Municipality

In the contemporary context of economic and political instability, significant sanction pressure, high inflation, and excessive budget expenditures, maintaining economic security at both state and municipal levels has become increasingly critical. Verifying the effective and rational utilization of budgetary funds is the prerogative of municipal audit and control chambers. Proactive identification of arrears and the efficient implementation of control measures contribute to the optimization of budget spending, reduction of budget deficits, and a decrease in the volume of municipal debt. The aim of the research is to quantify the impact of the key performance indicators of control and audit bodies on the volume of municipal debt as an indicator of the economic security of municipal entities. The object of the study is the activities of the audit chambers of urban districts and cities of federal significance with a population of at least one million people (cities with a population of over one million), and an assessment of the effectiveness of their activities is given. By employing correlation-regression analysis, the influence of performance indicators of audit chambers in these major cities on the volume of their municipal debt was identified. The analysis results confirm that the activities of audit and control institutions have a direct impact on the economic security of a municipality. This is particularly evident through factors reflecting the quality of control and the manageability of budgetary funds. An increase in individual workload coupled with insufficient effectiveness leads to a rise in municipal debt, which, in the long term, consequently weakens the financial independence of the territory and diminishes its economic security. Therefore, enhancing the performance of audit and control institutions is not only an administrative task but also a crucial element of the municipal economic security system, significantly influencing macroeconomic stability and territorial governance. Based on the developed model, a scenario forecast for the municipal debt volume of Novosibirsk was compiled, serving as an indicator of its economic security. This scenario-regression approach to assessing economic security measures substantiates the necessity of implementing programs aimed at improving the effectiveness of audit and control institutions as a vital component of municipal risk management. The constructed model is proposed as a strategic planning tool for the budgetary process and for evaluating the performance of audit chambers.