Publication date: 11.06.2024
Financial Autonomy of Local Councils: Legal Aspects of Formation and Execution of Local Budgets
Introduction
The financial autonomy of local councils is one of the key elements of the effective functioning of the local government system. It enables independent planning, formation and execution of local budgets, which contributes to the development of territorial communities and improves the quality of public services. This article examines the legal aspects of financial autonomy of local councils in Ukraine, as well as the challenges and prospects for the development of this area.
Legal framework for financial autonomy of local councils
The financial autonomy of local councils in Ukraine is regulated by a number of legal acts, among which the following are key:
The Constitution of Ukraine:
- Articles 140-146 of the Constitution of Ukraine define the general principles of local self-government, including the financial autonomy of local councils.
Budget Code of Ukraine:
- The main document regulating the budget process in Ukraine defines the principles of formation and execution of local budgets, their structure, sources of revenues and the procedure for making expenditures.
The Law of Ukraine "On Local Self-Government in Ukraine":
- The Law establishes the legal framework for the activities of local self-government bodies, their powers in the field of finance, and the procedure for drawing up, approving and executing local budgets.
The Law of Ukraine "On Public Finance in Ukraine":
- The law regulates relations in the field of public finance, including intergovernmental transfers and financial equalization affecting the budgets of local councils.
Formation of local budgets
Sources of local budget revenues:
- Local budget revenues include own revenues (local taxes and fees, revenues from municipal property), assigned revenues (part of national taxes and fees), and intergovernmental transfers (grants, subventions).
Budgeting process:
- The formation of the local budget begins with the preparation of budget requests by budget managers. Based on these requests and the revenue forecast, a draft budget is prepared, which is approved by the local council after discussion and public hearings.
Execution of local budgets
Planning and control:
- The local budget is executed in accordance with the approved budget allocations. Local governments ensure control over the receipt of revenues and the use of budget funds, as well as financial discipline.
Reporting and auditing:
- Local councils are required to report regularly on budget execution to the community and higher authorities. State and internal audits ensure that budget funds are used efficiently and legally.
You may be interested in the following articles:Legal analysis of the situation, Legal opinion, Writing a lawyer's request, lawyer's request, analysis of the situation by a lawyer, analysis of the situation by a lawyer, legal analysis of the situation, legal opinion of a lawyer lawyers documents help lawyer online lawyer online legal opinion legal opinion of a lawyer lawyer online
Challenges and prospects
Challenges to financial autonomy:
- Insufficient own revenues, dependence on intergovernmental transfers, problems with planning and forecasting revenues, and low efficiency of budget spending.
Development prospects:
- Strengthening the financial capacity of local councils by expanding the local tax base, improving the mechanisms of intergovernmental transfers, introducing modern methods of budget planning and control, and engaging the public in the budget process.
