Involved source of local budgets funding in Ukraine: problems and prospects

Abstract

The publication is devoted to the issue of financial resources attraction by local authorities. The possible sources, mechanisms and tools to attract external finance local governments are considered. It has been carried out the analysis of the legal and regulatory framework in the sphere of financial relationships regulation of local governments with emphasis on external resources attraction. Their capabilities and limitations are specified. On the example of the budget of Lviv and other cities the main directions of use of the expenditure part of local budgets are determined and its implementation is analysed. The overview of European financial institutions, mechanisms of their work and opportunities for cooperation with local governments is done.  On the basis of the research the obstacles to attracting revenue funds from international financial institutions in Ukraine are revaeled. It has been done the detailed consideration of such obstacles as the concentration of the important levers of management of financial flows of local government in the Treasury; complexity and difficulty in measuring time of loan approval procedures in public administration; insufficient experience of local government in the preparation of high quality and economically grounded proposals. The possibilities for overcoming the above obstacles through development of scheme of optimization  of attracting financial resources  process from international financial institutions are determined. The changes in regulatory legal acts of Ukraine are specified. This will harmonize the legal framework of normative acts which are connected with the financial resources attraction to the city budgets. It will also bring the financial system of local government closer to European standards.