American Journal of Business Management, Economics and Banking ISSN (E): 2832-8078 Volume 32, | January - 2025 P a g e | 125 www.americanjournal.org PROSPECTS FOR IMPROVING INTERNAL AUDIT AND FINANCIAL CONTROL OVER LABOR AND PAYMENT IN HIGHER EDUCATION INSTITUTIONS Rustamova, Shokhida Tulkunovna Independent Researcher, Tashkent State University of Economics E-mail: rustamova_sh_t@mail.ru ORCID: 0009-0002-9373-4961 A B S T R A C T K E Y W O R D S This article is devoted to the prospects for improving internal audit and financial control over labor and remuneration in higher educational institutions. The article analyzes the importance of internal audit and financial control in regulating labor relations, paying wages and maintaining accounting records in higher educational institutions. Particular attention is paid to issues such as the effectiveness of the financial control system, preventing errors in the payment of wages, and protecting the rights of employees. Wages, budget funds, bonus, auditor, efficiency, labor law, reporting system, planning, financing. Introduction Professors and teachers of higher education institutions are the main element of higher education, and the quality of training of specialists and the efficiency of economic processes depend on their qualifications, pedagogical skills, working and living conditions, human and moral qualities, general culture. In higher education institutions, employees are hired on the basis of a contract and they are paid wages in a differentiated manner. The procedure for labor and its payment is carried out on the basis of established norms. The implementation of these norms is monitored. Higher educational institutions are budgetary organizations, therefore, their labor costs are planned and financed on the basis of estimates. At the same time, taking into account the financial independence granted to some higher educational institutions, the procedure for payment for labor may change depending on their individual powers. The Resolution of the President of the Republic of Uzbekistan "On Measures to Grant Financial Independence to State Higher Educational Institutions" of December 24, 2021, granted state higher educational institutions granted financial independence the authority to make independent decisions on the following issues from January 1, 2022 [1]: – involving local and foreign professors and specialists on a contractual basis who can apply modern pedagogical technologies and conduct scientific research in the educational process; - making decisions on determining the amount of remuneration for the work of foreign highly qualified American Journal of Business Management, Economics and Banking Volume 32 January - 2025 P a g e | 126 www.americanjournal.org specialists involved in educational and scientific processes based on market conditions. In modern conditions, it is impossible to properly organize wages in a higher education institution without labor standardization, which would allow establishing a balance between the amount of labor input and the amount of payment for it. Literature Review A number of foreign scholars have conducted scientific research to study and improve the theoretical and methodological foundations of internal audit and financial control over labor and remuneration in higher educational institutions . In particular, N.P. Kondrakov [2], O.V. Mitina [3], T.S. Maslova, T.A. Poleshchuk [4], A.A. Ushakov [5] can be mentioned. A.S. Bakaybaeva [6], A.K. Ibragimov [7], K.Sh. Ibragimov [8], S.U. Mekhmonov [9], M. Ostanakulov [10], I.N. In the scientific works of Koziev [11], Sh.V. G'aniev [12], budget accounting in budget organizations, budget reporting, accounting of extra-budgetary funds of budget organizations and audit, internal audit and financial control in budget organizations, theoretical issues of budget control and directions of their development were studied. It should be noted that the scientific works of the above economists do not focus on the study of theoretical and practical problems of improving payroll accounting and control in higher education institutions as a separate object of research. At the same time, changes in regulatory documents related to the reform of the higher education system create the need for scientific research in this area. Analysis and Results Over the past decade, significant changes have occurred in the methods and means of transmitting knowledge, and therefore the content of educational work has also changed. The features and changes in educational work were taken into account by the author when designing an optimal system of motivating the work of university professors and teachers. In particular, the implementation and improvement of the procedure for paying bonuses, incentives, awards and KPI bonuses to professors and teachers in addition to their basic salary have found their place in every higher educational institution today. Also, since pedagogical work is of high social importance, it is necessary not only to make high demands on the level of important professional qualities of the professor-teacher, but also to evaluate the results of his activity accordingly. An optimal system of material incentives for professors of higher education institutions would be appropriate to divide the salary into three components. Payroll control by dividing it into three components simplifies the process and clarifies the results of the internal audit activity. A tiered approach to determining the amount of compensation for labor is the most effective method for paying and controlling employees' wages (Figure 1). American Journal of Business Management, Economics and Banking Volume 32 January - 2025 P a g e | 127 www.americanjournal.org Figure 1. Separation of wages into three components in the development of an optimal system of material incentives in higher education institutions Moreover, such work should be carried out at the levels of subordination - at the level of the management of the chief budget manager, at the level of heads of departments and at the level of ordinary employees of the departments of the chief budget manager. As a result, for each significant budget risk, measures are determined to eliminate the causes of its occurrence. Such measures include: • explanation of regulations on the implementation of individual procedures; • clarification of control measures in relation to procedures carried out within the framework of financial management; • implementation of organizational and staff work; • improving the skills of employees who carry out transactions (procedures, actions) that involve risks that need to be minimized; • redistribution of tasks within the structural unit related to risks whose activities should be minimized; • purchase and launch of equipment, automation equipment, software and other tangible and intangible assets necessary to minimize risk; • organize and monitor changes in budget legislation in order to provide responsible officials with the complete information necessary for the proper conduct of operations in a timely manner; • other measures, the implementation of which may lead to minimization of risks. it is appropriate to carry out the internal audit of the transactions in higher education institutions on the basis of the following stages ( Figure 2 ). The first component Fees are paid for the performance of official duties. Everyone who performs similar functions in the university receives the same fee for doing so The second component The second part of the salary is determined by factors such as length of service and standard of living. All university employees receive this component of their salary, but it varies for different categories and its amount is regulated annually. The third component The employee is paid based on the results achieved in the previous period American Journal of Business Management, Economics and Banking Volume 32 January - 2025 P a g e | 128 www.americanjournal.org Figure 1. The procedure for conducting internal audits of salary transactions in higher education institutions It is effective to use the following audit methods in the processes of internal audit of labor transactions by the audit team in collecting audit evidence and forming the necessary proposals and recommendations: Auditing selection method - study of the documents of the institution's activity in a certain period in accordance with the content of the studied internal audit issues; Figure 3. Transactions on wages internal audit methodology Figure 3. Transactions on wages internal audit methodology Creating an internal audit annual work plan Preparation of the program of the internal audit of labor transactions Implementation of internal audit measures of labor transactions Preparation of the report of the internal audit of labor transactions Overseeing the elimination of errors and inconsistencies indicated in the internal audit report 1 2 3 4 5 Internal audit procedures for salary transactions Checking compliance with applicable legal requirements Checking the correct reflection of salary transactions in accounting Checking the correct calculation of the CIT from the salary Checking the procedure for deductions and withholdings from wages Checking the correct formation of accounting and tax reporting indicators Check account system elements Checking the correct formalization of frame documents Checking the correct formalization of the first documents of accounting Checking the correct calculation of income and rate for the purpose of calculating JShDS Verifying the correct calculation of the amount of deductions and withholdings from wages in accounting documents Checking that the original documents correspond to the indicators of the accounting report and tax payments to the tax report Signs of strengthening internal controls Non-availability of documents and props Payment documents, presence of errors in the account The presence of errors in the calculation of the average salary Lack of timely fulfillment of obligations for the payment of Labor American Journal of Business Management, Economics and Banking Volume 32 January - 2025 P a g e | 129 www.americanjournal.org The general study method is to study all the documents related to the activity of the institution for a certain period of time (Fig. 3). In internal audit processes, the audit team should make sure of the completeness of the information and documents related to the issue under investigation before applying the inspection methods and procedures. Cases of violations of the law determined by the audit methods and actions used and the actions of their occurrence are analyzed. Conclusion The effectiveness of internal audit and financial control measures for wages in higher education institutions depends on the familiarity of employees working in this area with the activities of the audit or control object and the knowledge and skills related to wages in the higher education system. At the same time, the correct assignment of tasks for internal audit and financial control employees for wages audits and the systematic planning of audit measures are important in achieving the intended goal. Today, granting financial independence to higher education institutions, developing performance indicators for teaching staff, and constantly encouraging productive scientific research work provide some freedom from remuneration, while at the same time requiring direct disclosure of these circumstances in the formation of reports on the activities of the internal auditor and financial control service regarding the transparency and reliability of accounting data. internal audit and financial control activities on wages in higher education institutions, it is necessary for the employees working in this direction to be independent from the head of the operating organization (employer). Also, in order to study the fairness of bonuses and incentives assigned to employees, the pedagogue should have the authority to directly study the relevant primary documents and freely use the accounting information system. REFERENCES 1. Resolution of the President of the Republic of Uzbekistan dated December 24, 2021 "On measures to provide financial independence to state higher educational institutions." 2. Bakaybayeva A.S. Ways to improve budget accounting and financial control in the Republic of Uzbekistan . Econ. Sci. Phil. Doc. Diss. Abstract. – T.: 2020. –52 p.; 3. Ibragimov K.Sh. Improvement of accounting and financial reporting in budget organizations (in the case of higher education institutions). iqt. science. div. doc. dis. abstract. - T., 2018. - 54 p.; 4. Mehmonov S.U. Accounting in budget organizations : theory and practice. Monograph. –T.: “Economics and Finance”, 2016.; 5. Ostonakulov M. “ Accounting in budget organizations”. Textbook. –Tashkent, Yangi asr avlod, 2008. 480 p. 237 p.; Ostonokulov A.A. “Improving the methodology of accounting and reporting on extra-budgetary funds of budget organizations”. Doctor of Philosophy. dissertation. abstract. –T.: “DAVR MATBUOT SAVDO”, 2021. 72 p.; 6. Koziev I.N. "Improving the methodology of compiling and summarizing the audit report in the conditions of modernization of the economy". iqt. science. doc. dis. abstract. - T., 2017. - 70 p.; 7. Ganiev Sh.V. "Improvement of accounting and financial control in budget organizations" (as an example of the educational system). iqt. science. name dis. abstract. - T.: Uz R BMA, 2008. 28 p.