Tetyana Melnyk

The introduction of a qualitatively new type of relationship between citizens and authorities, one in which every person would be guaranteed real observation and protection of the rights and freedoms in these bodies activity, should be one of the priority areas of socio-political transformation in Ukraine. The urgency of the improving local finances, the formation of local budgets and the use of their funds is increasing due to changes in local self-government.

The article proposes a scientific methodological approach to assessing the level of financial decentralization in Ukraine during the period of the decentralization reform (2014–2017). The universal integral indicator of financial decentralization has been calculated, which has found that local budgets improve public funds management, which is illustrated by the growth of the integral indicator level in dynamics.

A number of recommendations are also provided for improving the budget process transparency for each of the components: budget information openness, the state and effectiveness of budgetary supervision, and public participation in the budget process. The idea of the relationship between the budget process transparency and the results of the financial decentralization reform is proposed.

The article proposes a way of determining the future directions of financial support for the social development needs. To this end, the Tintner method of consecutive differences is used. The practical application of this method allows for pre-selecting the best curve that describes the level of financial support for social needs. The model off inancial support for local self-government is determined. The adequacy of funding for the needs of local budget social development is analyzed. The share of expenditure of local budgets in Ukraine on health care, intellectual and physical development, education, social protection and social security is described. A number of challenges when it comes to financial support are considered, both from a theoretical perspective and those confirmed by actual calculations.

Transparency in public and local finance is one of the most important factors in building a democratic society with high level of public confidence in the government. Democratic shifts in a country will only take place if citizens perceive the country’s government and local self-government as fully transparent and controlled by them. Citizens will be able to support and cooperate with the government if it informs them of all public activities: decision-making, financial reporting, planning, local budget expenditures, etc. Transparency in the formation and use of local financial resources is the most sensitive issue.
Local finance transparency has been studied from the perspective of 21 online portals of local authorities from four Ukrainian regions, geographically remote in the context of two main blocks, namely, the state of public procurement and the budget process. The portals of Lviv, Vinnytsia, Sumy, Mykolaiv administrative centers and the city of Kyiv were identified in each region (oblast), and in each oblast, four cities with the district status, which are the largest by population, were identified. Significant discrepancies in local finance transparency have been identified, as portals of regional centers and a small number of districts have high levels of transparency. The vast majority have low transparency in local finances. In addition, the level of community involvement in the regional development problems through social networks was analyzed. The population of small cities was found to be more active. Most local governments should pay attention to the low level of portals in terms of making them user-friendly.