Improving the methods of budget funds management in decentralization conditions

Problem setting. The process of decentralization, which was initiated in order to strengthen the material and financial basis of local self-government, requires the latest approaches to its implementation, given the complexity of the process, the large number of issues of the functioning of the territorial communities, which it covers and the ambiguity of the consequences it leads to. Since it, on the one hand, can contribute to the development of separate territorial communities at the expense of additional financial resources and, on the other hand, create barriers for the development of other communities with less economic potential and can not compete with more developed regions, provided that the transition to a self-financing model of local self-government is preferable .

This is particularly evident in the management of budgetary funds that are available to territorial communities and should be used most rationally and efficiently on the one hand and have enough to finance their aspirated needs from another. And in view of this, there is a need for an analysis of the methods of managing budget funds in a decentralized environment that would correspond to the current trends in the development of territorial communities and were of a new character.

Recent research and publications analysis. A number of scholars in their writings touched upon issues of budget activity in the conditions of decentralization, including in its fiscal aspect, among them: V. Bodrov, T. Buturlakin, A. Vasiliev, G. Voznyak, O. Kyrylenko, A. Lelechenko, Z. Lobodina, G. Lopushniak, M. Vlivdar, V. Kuybida, I. Lunin, S. Romaniuk, A. Tkachuk, G. Shakhov and others. Among foreign scholars should mention Sh. Blankarta, G. Bivaleets, M. J. Byukenen, R. A. Masgraveva, Y. Kulyavika and others.

The scholars and the questions of the concept of fiscal decentralization were considered, which were reflected in the works of O. Borislavskaya, I. Volokhova, V. Hamana, M. Goncharenko, Y. Grinchenko, O. Kyrilenko, N. Kryshtof, O. Lisenko, O. Onishchenko, S. Romanyuk, M. Ruban, A. Yakymchuk, V. Yaroshchuk and others like that.

However, the question of the methodology of managing budget funds in conditions of decentralization and its improvement was not the subject of a separate scientific analysis.

Highlighting previously unsettled parts of the general problem. In general, the issue of budget activities in the context of decentralization was considered mainly from the point of view of the functioning of individual budgets and the needs of their adaptation to this process. That is, the scholars considered separate issues of budget activity in a decentralized environment without analyzing the methodology of managing budget funds in the course of decentralization processes.

At the same time, it is the methods of management of budget funds that would correspond to the current state of decentralization processes taking place in local self-government were not the subject of separate scientific research, and therefore there is a need for scientific research in this direction.

Paper main body. From the point of view of public administration of budgetary funds in the conditions of decentralization, it is necessary to determine the method of management of budget funds in the conditions of decentralization as a set of consistent actions aimed at achieving the result in the form of improved management of such budgetary funds. In view of the complex nature of budget relations and the issues of legal and practical regulation of fiscal decentralization, it is advisable to choose an approach based on development, with subsequent practical application, not one and a number of new methods that should improve the management of budgetary funds in conditions of decentralization. Having grasped the most important issues of managing budget funds in the territorial communities.

At the state level, the relevant financial, property and budgetary rights of local self-government are guaranteed, with the allocation of local budgets as independent components in the budget system of Ukraine, and the opportunities for transferring resources to the bodies of self-organization of the population are guaranteed, which must be taken into account during the management of budget funds in conditions of decentralization.

Until the start of a new budget period, territorial communities are not able to take advantage of all the financial opportunities provided to united territorial communities. Including receive corresponding revenues to the budget of the united territorial community, as provided for in Article 64 of the Budget Code of Ukraine. And this reduces the budget opportunities of the united territorial community, especially when the union took place at the beginning of the fiscal year. Therefore, it is expedient to allow such associations to be held and in the future, without limiting them only in the framework of 2018, by making appropriate amendments to the current legislation and adding in this part of the Methodology for the formation of capable territorial communities.

The territorial community is estimated by the population criterion and the area without taking into account the particulars of the area (the mountainous location, the severity of the availability of particular settlements or parts of the territories), the existing infrastructure on the ground (its degree of development, wear, suitability for use), natural and climatic conditions, etc. Therefore, it is advisable to supplement the Methodology, as well as the Law of Ukraine “On Voluntary Association of Territorial Communities”, with norms that would take into account a greater number of factors for the financing needs of territorial communities.

The resources available to the territorial communities should be the basis of their activities and the effectiveness of their use will be directly dependent on the possibility of functioning of such communities, on the principle – the lack of resources dictates the need for joining another territorial community. Also, not all territorial communities are fully capable of self-financing, and therefore need support from the State Budget.

An important issue is the transfer of powers without their proper funding, which leads to the creation of a significant amount of deficit within the local budgets to cover the use of funds that could be used to develop the territorial communities. Therefore, it is important in the Methodology for the formation of capable territorial communities to consider the mechanism of management of budget funds, which should be based on the appropriate level of financing of delegated powers, without which the execution of such powers or other functions of local self-government may be endangered. Also, during the management of budget funds, it should be possible to borrow all the budgets of local self-government bodies, especially the budgets of the joint territorial communities, which at the expense of the received funds will be able to implement projects that are important for the communities and develop the economies of such communities. At the same time, the restrictions contained in the Budget Code of Ukraine, regarding the financial possibilities of borrowing funds of territorial communities and their use within the budgets of development should be kept.

There is a legal framework for involving civil society organizations in the consideration of budget issues of local self-government and their control by the budget process at the level of territorial communities. However, the Methodology for the formation of capable territorial communities does not provide for the possibility of conducting public financial control over the formation of the budget, primarily through its public discussion, and further control over its implementation by the public and public organizations of such a community. This shortcoming must be corrected by making appropriate additions to this Methodology.

Conclusions of the research and prospects for further studies. The main new approaches to improving the methodology for managing budget funds in the territorial communities are as follows:

• transition to the budget of the united territorial community from the budgets of the territorial communities that united without setting the time frame for such a transition;
• management of budget funds in terms of allocating financial support between the budgets of the joint territorial communities, which needs to be improved and taking into account additional factors influencing the need for features of location (in particular landscape), natural and climatic conditions;
• management of the budget funds of a territorial community is based on the following key provisions: 1) territorial communities should receive at least 50% (according to the model of European states) from taxes, fees, payments paid on the territory of the community; 2) territorial communities should be self-financing, which, on the one hand, will put them in an effective use of resources, and on the other, create additional incentives for the formation of united territorial communities that will be financially self-sufficient; 3) support from the state budget should be provided on the basis of functions, including social, carried out by the territorial communities, with full financing of these functions;
• management of local budgets, which consists of borrowing opportunities for all budgets of local self-government bodies, especially budgets of united territorial communities;
• introduction of public control in the field of local budgets, the formation and implementation of the budget of territorial communities.

The prospect of further research is the detailed elaboration of the identified ways of improving the methodology of budget funds management and the formation of legislative acts for its implementation.