ECONOMIC ESSENCE OF FINANCING ACTIVITIES OF HIGHER EDUCATION INSTITUTIONS

Abstract

The financial system of higher education has specific features. Being initially an element of finances of the non-productive sphere, it is formed in the process of redistribution of the gross do-mestic product of the country. At the same time, the return on investment in higher education is mainly in the field of material production and, therefore, at the stage of redistribution, initial investments in higher education are transferred in both intangible and material production. This characterizes the duality of higher education finances. At first, these are non-productive investments and later they are trans-formed into investments in productive and non-productive sectors of the economy. Higher education finances are formed in the redistribution process of the cost of gross national product. As it is known from the finance theory, the process of distribution and redistribution of the cost of gross national product is a financial mechanism. It includes separate spheres of financial relations, allowing to form own finan-cial resources of economic entities, hired workers, state and local self-government bodies. The financial mechanism is a system of organization, regulation and planning of financial relations, methods of for-mation and use of financial resources. Many studies of native and foreign scientists are devoted to issues of the financing mechanism of higher education, budget financing of universities, educational credit, etc. At the same time, the scientific interpretation of the essence of the financing process of higher education in general and the development of individual elements of its mechanism is relevant. One of the most important tasks of the full entry of Ukraine into the world economic field is the training of personnel required by the national economy and they should be competitive at the world labor market. One of the conditions for achieving the task is to finance the Ukrainian higher education system that meets the needs of the country’s economic development at the present stage. Under the conditions of insufficient funds, higher education faced significant difficulties in the formation of financial resources for the implemen-tation of their functions. Despite the priority status of education, many institutions of higher education have problems with financing. The systematic and complex financing of the national system of higher education is violated. Developing the financial mechanism, the state seeks to ensure its fullest compli-ance with the requirements of financial policy of one period or another, while maintaining the constant desire for its compliance with the objectives.