The Mechanism of Budget Management as an Element of Risk Control in Regulatory Authorities

Abstract

The activities of economic entities of the public sector in the conditions of uncertainty are associated with many risks, which manifest themselves in negative consequences, i.e., the lower effectiveness of executing assigned powers. Many subjective and objective factors influencing managerial decisions require the knowledge of methods for assessing and managing risks in order to reduce their consequences and achieve the strategic goals of economic entities. There is a promising theory of risk management that does not have the proper theoretical and methodological support, which limits its application. Currently, most studies are concerned with the feasibility of applying and adapting control mechanisms in the public sector. However, the theory of risk control, or risk management, is not considered by modern economists. The objective is to form a budget management mechanism in the Federal Treasury (regulatory body) as an element of risk control. The study considers the optimality and efficiency of the distribution of budgetary funds in the process of exercising the assigned budgetary powers by regulatory authorities and conducting a comprehensive analysis of causes and conditions that affect negative deviations from the standard values. The results of this study contribute to the body of knowledge about risk management, and the proposed approach can be used in similar studies in the public sector.