The Influence of Public Audit Bodies on the Effectiveness of Local Budget Governance

Ensuring effective governance of local budgets is critical for public service delivery and sustainable development. Public audit institutions—including internal auditors and independent supreme audit bodies—are hypothesized to enhance local budget effectiveness by promoting transparency, accountability, and efficiency in the use of public funds. The main purpose of this article is to test the hypothesis that stronger and more independent public audit institutions are associated with more effective local budget governance and to answer three research questions concerning (i) how different audit models are organized, (ii) how audit strength is quantitatively related to governance outcomes, and (iii) how these relationships manifest in transfer-dependent settings such as Kazakhstan. Drawing on cross-country indicators and a case study of Kazakhstan, the empirical analysis focuses on the period 2021–2023, when the most recent and comparable data on audit oversight and budget transparency became available. This study reviews international best practices and experiences, analyzes relevant global indices, and conducts a comparative examination of advanced economies and Central Asian countries to assess how audit bodies influence local budget outcomes. Correlation analysis using cross-country data and case studies is employed to quantify and illustrate these relationships. Best-performing countries adopt performance auditing approaches that focus not only on compliance but also on evaluating value-for-money and socio-economic impact. However, gaps remain; globally, while supreme audit institutions often meet standards, legislative oversight and public participation in budgeting are frequently insufficient, and many governments fail to act on audit findings. This study underscores the need for holistic reforms—especially in transfer-dependent regions—combining empowered audit institutions with policy changes to incentivize local revenue generation and responsible financial management. Effective public audit oversight emerges as a cornerstone of good local governance, helping to safeguard public funds and improve trust in government.