Abstract
This paper provides evidence about the effects of facilitating internal control mechanisms on the financial sustainability of local governments. Specifically, it explores the effect of Spanish regulation mandating that municipalities prepare the Annual Financial Control Plan (PACF for its acronym in Spanish). The study is based on the PACFs of 77 Spanish municipalities and relates the quality of risk analysis and the scope of planned public audit activities to the financial sustainability of the municipalities. Our results show that higher quality risk-based planning and increased use of operational audits contribute to financial sustainability. We also find that municipalities with less complex structures and women in positions of responsibility, such as mayor or controller, have greater financial sustainability. In contrast, a lack of resources for the development of the control function is a limiting factor.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.