The Current State of the Financial and Material Base of Territorial Communities in Terms of Decentralization

Abstract

The article defines the peculiarities of managing the financial and material base of territorial communities of Ukraine in the conditions of decentralization. The economic essence of the term «financial and material base» is given and the main components of this indicator are allocated, allowing to assess the financial security of territorial communities. The main factors of influence on the financial and material base of territorial communities related to the implementation of the decentralization reform in Ukraine are determined. New financial opportunities and responsibilities of administrative and territorial units are allocated, which is reflected in strengthening the own financial base of local self-government. A dynamic analysis of the ratio of incomes of the general fund of local budgets to the GDP of Ukraine during 2014–2020 was carried out. The process of transfer of the joint ownership objects to communal property of territorial communities in the context of regions of Ukraine as of 05.03.2021 is considered. Since the assessment of the state of financial and material resources of territorial communities is a complex process and includes the management of communal property, the main ways of using communal property are defined, among which it is worth to highlight: rent, privatization, independent use of property by the territorial community, leasing, concession and others. The assessment of the ways of using communal property objects on the example of the territorial community of Lviv for 2018–2019 was carried out. It is proved that the analysis carried out is evidence of an increase in the level of financial security of local budgets and a justification of positive trends in the growth of their resource base as a result of financial decentralization. Negative factors of influence on the main indicators of financial and material base of local budgets are determined. Also a number of problems faced by local self-government bodies are specified and ways to solve them are suggested.