Initiative with BuiltIn and Custom Policies

[AnshuBhatiaGit]

I am facing issues when I create an initiative with both built and custom policies. I have an initiative with 2 builtin policies with effect (Audit, AuditIfNotExists) and 4 custom policies with effect(Audit) so how do I implement the two effects in the code. Is there a way to define policy parameters for builtin policies that specific builtin policies uses the effect associated with that builtin policy?
I have the below initiative.

I have this code to create the initiative.

# Network
locals {
  builtIn_policies  = jsondecode(data.local_file.builtIn_policy_data.content)["builtIn_policies"]
  network_policies  = local.builtIn_policies["Network"]
}
data "azurerm_policy_definition" "network" {
  for_each     = local.network_policies
  display_name = each.value
}

locals {
  custom_policy_keys = [
    "any_rules",
    "enforce_nsg",
    "just_in_time",
    "network_peering",
  ]
}
module init_network{
  source                  = "../modules/initiative"
  initiative_name         = "TF - Network"
  initiative_display_name = "TF - Network"
  initiative_description  = "TF - Policies for Azure Network"
  initiative_category     = "Network"
  # Comment out for subscription scope
 # management_group_id = data.azurerm_management_group.org.id


  member_definitions = concat(
    [for def in data.azurerm_policy_definition.network : def], # BuiltIn
    [for key in local.custom_policy_keys : module.def_network[key].definition] # Custom
  )
}

I have this code in definitions.tf file
# Network
##################
module def_network {
  source                = "../modules/definition"
  for_each              = local.network_c_policies
  policy_name           = each.key
  display_name          = each.value
  policy_description    = each.value
  policy_category       = "Network"
 # management_group_id = data.azurerm_management_group.org.id # Comment out for subscription scope
}

This is the builtin.json file
{
  "builtIn_policies": {
 "Network":{
      "net_priv_link":        "Event Hub namespaces should use private link",
      "net_key_vault":        "Key Vault should use a virtual network service endpoint"
    }
}
} 

It gives me this error.
Error: updating Scoped Policy Assignment (Scope: "/subscriptions/xxxxx"
│ Policy Assignment Name: "tf - network"): unexpected status 400 (400 Bad Request) with error: PolicyParameterValueNotAllowed: The value 'AuditIfNotExists' is not allowed for policy parameter 'effect' in policy definition 'TF - Network version 1.0.0'. The allowed values are 'Audit, Disabled'.
│
│ with module.asgmnt_network.azurerm_subscription_policy_assignment.set[0],
│ on ../modules/set_assignment/main.tf line 62, in resource "azurerm_subscription_policy_assignment" "set":
│ 62: resource "azurerm_subscription_policy_assignment" "set" {
│
│ updating Scoped Policy Assignment (Scope: "/subscriptions/xxxxxxx"
│ Policy Assignment Name: "tf - network"): unexpected status 400 (400 Bad Request) with error: PolicyParameterValueNotAllowed: The value 'AuditIfNotExists' is not allowed for policy parameter 'effect' in policy definition 'TF
│ - Network version 1.0.0'. The allowed values are 'Audit, Disabled'.
╵

It is giving error because the effect "AuditIfNotExists" is not defined but not sure how to resolve this.
Should I use merge_effects = false in the code?
Any help is appreciated. Thanks a lot.

[AnshuBhatiaGit]

merge_effects = false solved the issue.