№ 5/2019

Fìnansi Ukr. 2019 (5): 79–96https://doi.org/10.33763/finukr2019.05.079

LOCAL FINANCE

MALYNIAK Bohdan ¹

¹Ternopil National Economic University
OrcID ID : https://orcid.org/0000-0001-6965-393Х

Shortcomings of local governments in budgeting for unified territorial communities and their possible solutions

The article studies a set of problems which arise in the process of budgeting for unified territorial communities (UTCs) due to actions or inactions of local government units. Based on the elaboration of theoretical studies on the management of local budgets and budgeting, the author developed criteria for assessing the quality of budgeting and classified them into two groups. The first group of criteria is used to characterize the activities of local government units, in particular the organization of planning, the competency of employees, the information base, and the congruence with strategic priorities. The second group is used to evaluate the communications between local governments and territorial communities in the budgeting domain. Proceeding from the analysis of conformity between the budgeting practices and each of the substantiated criteria, the author identifies a set of problems faced by local governments in the process of budgeting for UTCs. Thus, the budgeting process is usually found to be poorly organized, whereas the majority of local government units in UTCs do not have approved guidelines regulating this process. The budgets of UTCs are drafted in the conditions of a limited information base resulting from incomplete databases of local government units. The process of budgeting is revealed to be incongruent with the strategic priorities. The systemic problem with the quality of budget planning in UTCs is that the communications between the authorities and the territorial communities are poorly developed. It is noted that low willingness of citizens to participate in public budget management fosters unjustified positive expectations with regard to outcomes that are supposed to be achieved by other participants of the budgeting process. Finally, the author outlines the measures necessary for solving the aforementioned problems and demonstrates the feasibility of their implementation by the state authorities, local governments and civil society organizations.

Keywords: unified territorial communities, local budgets, budgets of unified territorial communities, budgeting, government-community communications.

JEL: H70, R51

MALYNIAK B. . Shortcomings of local governments in budgeting for unified territorial communities and their possible solutions / B. . MALYNIAK // Фінанси України. - 2019. - № 5. - C. 79-96.

Article original in Ukrainian (pp. 79 - 96)

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