Assessment of financial sustainability of the local budgets: case of Ukraine

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With the deepening of global financial and economic instability, the search for ways to increase fiscal sustainability becomes relevant in the crisis regulation system. This problem is compounded by the emergence of new global challenges, including the COVID pandemic. Timely and complex analysis of the local budget financial sustainability allows one to comprehensively assess financial and economic risks, identify social and other problems, consider planning deficiencies and, on this basis, form a sound and effective regional budget policy. The purpose of the study is to summarize theoretical and practical principles of assessing the financial sustainability of local budgets and to outline the directions for its improvement in Ukraine considering international practices.
The study revealed the lack of a unified system for assessing the financial sustainability of local budgets in Ukraine. On the basis of generalization of theoretical and methodological approaches, a system of indicators for estimating the financial sustainability of local budgets has been identified. The indicators were grouped and calculated. Based on the study of practical experience, measures have been specified that would contribute to a systematic approach to assessing the financial sustainability of local budgets in Ukraine.
It was concluded that a systematic assessment of the financial sustainability of local budgets is a prerequisite for making informed management decisions about necessary adjustments to the budget, improving the quality of budget planning and the effectiveness of budget policy.

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    • Table 1. System of indicators for assessing financial sustainability of the local budgets
    • Table 2. Main indicators of development of some Ukraine’s regions in 2019
    • Table 3. Composition and structure of revenues and expenditures of some Ukraine’s local budgets in 2019
    • Table 4. Main indicators of financial sustainability of Ukraine’s local budgets
    • Table 5. Integrated indicators of financial sustainability of Ukraine’s local budgets
    • Conceptualization
      Liubov Lysiak, Svitlana Kachula, Oksana Hrabchuk, Milena Filipova
    • Funding acquisition
      Liubov Lysiak
    • Investigation
      Liubov Lysiak, Svitlana Kachula, Oksana Hrabchuk, Milena Filipova, Anna Kushnir
    • Methodology
      Liubov Lysiak, Milena Filipova, Anna Kushnir
    • Project administration
      Liubov Lysiak, Oksana Hrabchuk
    • Supervision
      Liubov Lysiak
    • Validation
      Liubov Lysiak, Milena Filipova, Anna Kushnir
    • Writing – original draft
      Liubov Lysiak, Svitlana Kachula
    • Writing – review & editing
      Liubov Lysiak, Svitlana Kachula
    • Data curation
      Svitlana Kachula, Oksana Hrabchuk, Milena Filipova, Anna Kushnir
    • Formal Analysis
      Svitlana Kachula, Anna Kushnir
    • Visualization
      Oksana Hrabchuk, Anna Kushnir