The purpose of this article is to analyze the control of local budget expenditures in Ukraine under the influence of the crisis caused by COVID-19 and to find ways to improve the internal financial control of expenditures of budgetary organizations. The relevance of the study is due to the need to create a system of separation of powers and responsibilities in the public sector on the basis of ensuring economical, efficient, effective and legal use of budget resources to achieve the goals set by the organization. The study was conducted on the basis of data from Ukraine. Expenditures of budgetary institutions as an object of internal financial control are considered. The analysis of control of expenses of local budgets is carried out. It is established that Ukraine needs further reform of the state financial control of expenditures of budgetary institutions -in the direction of decentralized control. It is proved that the creation of a modern information and analytical resource optimizes the accounting and control system, which will lead to the introduction of more effective mechanisms for administration, de-shadowing of the economy and increasing control over budget expenditures. Thanks to digital technologies, the economic activity of budgetary institutions will become more transparent, risk assessment will be optimized and the capabilities and effectiveness of the system of internal financial control of expenditures will increase.