FORMATION AND IMPLEMENTATION OF THE LOCAL BUDGETS: PROBLEMS AND DIRECTIONS OF INCREASING EFFICIENCY

Abstract

Objective. The objective of the present article is to identify problems and directions for improving the effectiveness of the formation and execution of budgets of territorial communities. Methods. In the research process, the following general scientific methods and methods of cognition were used: methods of scientific abstraction, analysis and synthesis (for researching theoretical aspects of the budget process at the local level, determining the main problems of the formation and implementation of local budgets, developing directions for improving the efficiency of the formation and implementation of local budgets), systemic generalization (to determine the influence of advantages and disadvantages of decentralization on local budgets), statistical analysis (to assess the effectiveness of formation and implementation of local budgets). Results. According to the results of the conducted research, the essence of local budgets, the positive and negative consequences of the impact of decentralization on local budgets were considered, the main areas of evaluation of the effectiveness of the formation and implementation of local budgets were determined (analysis of financial stability (balance, financial independence, overall effectiveness of the budget); analysis of efficiency (financial productivity, economic and social efficiency)). Based on the example of the the Kryvyi Rih City Territorial Community, an analysis of the main indicators of the formation and implementation, as well as the effectiveness of the budget during 2018 - 2022, was carried out, according to the results of which the general trends of increasing tax revenues, decreasing the implementation of planned indicators of budget expenditures, increasing the level of financial sustainability of the budget, multidirectional trends were established indicators of budget efficiency (increase in the indicator of financial productivity, social efficiency; decrease in the coefficient of economic efficiency). General problems in the management of revenues and expenditures of local budgets have been identified: limited budget resources; insufficient financial stability; problems of forming the revenue part of local budgets and the need to identify reserves for their increase; failure to receive possible income from rent and payment of land tax from land plots of communal property that are not used; application of minimum land tax rates; ineffective management of communal property; nonreceipt of personal income tax due to informal employment of the population; improper use of interbudgetary transfers; insufficient transparency of budget formation and execution. Areas of increasing the efficiency of local budgets have been determined (increasing the revenue and expenditure capacity of the budget and making tax payments; ensuring stability and effective use of available funds, effective risk management and ensuring openness, public accounting, optimization and improvement of cost efficiency, involvement of local residents and other stakeholders in the process formation of the budget, implementation of measures to support the development of local economic potential to provide additional sources of income and increase their efficiency).