Financial

Abstract

The article reveals the essence of “financial independence” concept in the aspect of public administration and the content of a state policy regarding financial independence of territorial communities. Defined that the Budget Code of Ukraine establishes the principle of independence as one of the principles of the budget system. Performed a brief review of the available approaches in the scientific literature to the definition of financial independence in local self-government. Proposed the author’s definition of the essence of the concept “financial independence of the territorial community” – the state of the local government, which is reflected in its relations with other public entities and is characterized by the following features: the ability to make decisions about the formation, disposal and use of community financial resources; responsibility for decision making process; state guarantee of the budgetary stability and financial policy concerning local self-government. It is noted that the key role in ensuring the financial independence of territorial communities is played by the state represented by the legislative and executive authorities. Defined the components of the state policy ensuring the financial independence of territorial communities: 1) determination of sources of local self-government financial resources, equivalent to the powers of local self-government bodies and officials provided by the legislation; 2) guaranteeing the stability of the established sources of revenues to local budgets in the long run;3) ensuring the consistency of decisions on the territorial communities’ financial resources and avoiding their frequent change; 4) ensuring full synchronization of the amount of financial resources and the range of powers delegated by the state to local governments; 5) protection of financially weak communities through the implementation of budget equalization mechanisms; 6) establishment of clear, objective and transparent criteria, procedures and measures of financial equalization; 7) minimization of state intervention in the use of local budgets, i.e. avoid restriction of the local governments freedom to decide on the disposal of financial resources; 8) motivating local governments to make full use of opportunities to fill budgets and increase the financial potential of communities and territories; 9) ensuring a reliable structure of the financial market andlocal governments access to it for the implementation of investment capital loans; 10) holding consultations with local self-government bodies on making decisions on the procedure for transferring financial resources to them. The state policy measures to ensure the financial independence of territorial communities are organized into two large groups: direct and indirect participation of the state in the formation of financial resources of communities and territories and their disposal.