Analysis of financial flows in the budget process of Ukraine under the conditions of structural imbalances of the financial system

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Adjusting the balanced movement of financial flows in the budget process is a vital component of ensuring the functioning of the financial system. This study aims to identify and outline possible areas for improving the management of financial flows in the budget process of Ukraine to regulate structural imbalances of the financial system. With the help of ranking and clustering, the analysis and assessment of local budgets based on indicators that characterize the movement of financial flows was carried out. The used methods made it possible to consider the differences in the formation and direction of budget flows of territorial communities and determine the progress of administrative-territorial units. An assessment of the state of financial flows consolidated in the treasury single account of Ukraine was conducted: the dynamics of balance, the volume of loans and repayments to local budgets, and the Pension Fund of Ukraine were considered. The assessment results made it possible to determine the directions of setting a stable and balanced movement of financial flows and levers to regulate the impact of structural imbalances of the financial system related to the management of cash balances of the treasury single account and increase of its liquidity. The volumes of revenues, expenditures, deficit, and borrowings to the State Budget of Ukraine were estimated to determine the conditions that cause imbalances in the financial system. The directions for timely and complete execution of the decisions by state authorities and local self-governments are outlined.

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    • Figure 1. TSA opening balance (as of the beginning of each month) in 2017–2021, UAH million
    • Figure 2. Share of TSA balances in total expenditures of the Consolidated Budget of Ukraine, %
    • Figure 3. Loans to cover temporary gaps in local budgets of Ukraine from TSA funds, million UAH
    • Figure 4. Granting and repayment of loans to cover temporary cash gaps to the Pension Fund of Ukraine related to the payment of pensions from TSA funds, million UAH
    • Figure 5. The share of revenues, expenditures, and budget deficits of France, Germany, and Ukraine in GDP in 2020, %
    • Figure 6. Positions of administrative-territorial units of Ukraine in the ranking of individual indicators in 2021
    • Figure 7. Results of the cluster analysis of administrative-territorial units of Ukraine in 2021
    • Table 1. Indicators of revenues, expenditures, state borrowings, and GDP of Germany, France, and Ukraine
    • Table 2. Rating of administrative-territorial units of Ukraine in 2021 by individual indicators
    • Conceptualization
      Kateryna Romenska, Volodymyr Orlov
    • Data curation
      Kateryna Romenska, Volodymyr Orlov, Natalia Pavlova, Ruslana Kryvenkova, Iryna Shalyhina
    • Formal Analysis
      Kateryna Romenska, Volodymyr Orlov
    • Funding acquisition
      Kateryna Romenska, Volodymyr Orlov
    • Investigation
      Kateryna Romenska, Natalia Pavlova, Ruslana Kryvenkova, Iryna Shalyhina
    • Methodology
      Kateryna Romenska, Volodymyr Orlov
    • Resources
      Kateryna Romenska
    • Writing – original draft
      Kateryna Romenska, Volodymyr Orlov
    • Writing – review & editing
      Kateryna Romenska, Volodymyr Orlov, Natalia Pavlova, Ruslana Kryvenkova, Iryna Shalyhina
    • Validation
      Volodymyr Orlov, Natalia Pavlova
    • Visualization
      Volodymyr Orlov
    • Project administration
      Natalia Pavlova, Ruslana Kryvenkova, Iryna Shalyhina
    • Supervision
      Ruslana Kryvenkova
    • Software
      Iryna Shalyhina