Prospective areas for managing the financial potential of sustainable development of territorial communities

Abstract

Low income and considerable amounts of local budget expenditures, dependence on interbudgetary transfers, and the lack of an effective financial resource management system do not allow local authorities to fully implement the functions assigned to them and fulfil the community's financial potential. In this context, the search for promising areas for managing the financial potential of sustainable development of territorial communities is considered particularly relevant. The purpose of this paper is the theoretical and methodological substantiation of promising areas for managing the financial potential of sustainable development of territorial communities. It has been established that in the conditions of martial law, the tasks of local authorities have significantly expanded. Specifically, the issues of social and household services for internally displaced people, the formation of food reserves, and the application of security measures to protect the community, the implementation of which require adequate funding, have become relevant. It has been proven that local budget revenues are a key indicator of the financial potential of territorial communities. Using the method of economic and mathematical modelling, it is argued that the progress of the financial potential of territorial communities both during the martial law and in the post-war period will depend on capital investments in the development of the economy, the growth of the employment of the working population, as well as the increase in its income as the main source of the formation of financial bases of local budgets. It has been empirically confirmed that the state of war and the need for post-war reconstruction of territorial communities requires their classification depending on the degree of human, infrastructural, and economic losses. It has been proven that such a gradation allows developing an algorithm for managing the financial potential of sustainable development of territorial communities depending on their immediate needs and requests, and for state authorities and management bodies to find out the necessary amounts of financial and other support as soon as possible. The need to develop conceptual approaches to the development of a sophisticated management mechanism for the restoration of the financial potential of communities synchronized with the EU membership plan is argued. Such approaches can be used by local government and management bodies when developing strategic plans for the sustainable development of territorial communities, developing financial potential capable of ensuring the implementation of measures to manage their economic, social, and environmental advance