The article presents the issues of the functioning of internal audit in the public finance
sector and its role in the system of management control. The main purpose of this article is to
demonstrate that the internal audit and management control are necessary tools for use in
public sector units. The necessity to control comes from the fact the management of public
resources.
The article presents the definitions and characteristics of both of these tools ona
background of the Public Finance Act, both of 2005 and currently in force in 2009. Also in the
article was presenteda comparative analysis of the internal audit of financial control and
management control.
Functioning of the public sector is based on the management of public funds. Thus, even
more than in the private sector, the need to control income and expenditure in this particular
sector. Glossary of terms in the public distinguished by inspection and auditing, as the main
instruments to help manageand management of public funds.
The new Public Finance Act introduced the concept of management control and the
proposed new regulations relating to internal audit that strengthen expenditure control.
Control and internal audit are often identified both in literature and in practice. But this isa
mistake because they have a different nature and should distinguish between them. These
concepts are closely related and form a coherent system that guarantees the protection of
public financial resources and effective management and operation of all public sector bodies,
but their activities are varied.
Internal audit and, in particular, management control can contribute to increasing the
efficiency of the functioning of the entire public sector.