Legal aspects of the external control system of municipal finances

Abstract

The control of expenditure of municipal budgets is the essential regulatory element. The municipal budget is the financial basis for the institutional functioning; therefore, local residents, I. e. taxpayers, and local authorities need to know if the budgetary appropriations are implemented lawfully and appropriately, how the budgetary funds are used and their accounts kept, if the targets have been met. The article analyses the external control system of municipal finances and its legal regulation in Lithuania; defines the concepts of municipality, financial control and financial control system; reveals the content of the internal and external control of municipal budgets. The paper provides a thorough analysis of the work carried out by the external control entities of municipal finances (municipal controllers (municipal control and audit services), the National Audit Office, and independent auditors) as well as their interrelationships.