Object – the intergovernmental relations, that arise in the budget system of Ukraine. Purpose – the research and the development of theoretical statements, the discovery of the lines of development of the system of intergovernmental transfers in Ukraine and the substantiation of the recommendations for the improvement of functioning of the intergovernmental transfers in the terms of market transformations. Methods – dialectical, logical, historical; the method of theoretical generalization, method of abstraction, induction and deduction; empirical knowledge, analysis and synthesis, grouping, comparative method, graphical analysis, economic and mathematical methods; generalization, analog method, formal and logical methods. Results – scientific substantiation of the conceptual principles of functioning of the system of intergovernmental transfers and practical recommendations for its improvement, the forming of conclusions. Novelty – the dualistic nature of the intergovernmental transfers, which combines unity of two components: economic and socio-political, is discovered; the redistributive, allocative, regulative and administrative functions of intergovernmental transfers are formulated; conceptual approaches to the allocation of state investment subventions between the local budgets were improved, basing on social and economic development of the region and with the use of formal methods; methodological principles of assessment of the relative degree of variation of the socially oriented expenditures with the use of the coefficient of variation, were developed; the stages of the intergovernmental relations development in Ukraine were distinguished in the context of the system of intergovernmental transfers formation; the approaches to the definition of equalization grant were developed in the part of calculation of the expenditures of local budgets, which are taken into account in determining the amount of intergovernmental transfers based on the standards of social security. Implemented in the activity of the Department of Finance of the Chernivtsi City Council, the Department of Finance of the Chernivtsi Regional State Administration, the Department of Finance of the Ternopil Regional State Administration and the study process of Chernivtsi Trade and Economics Institute of Kyiv National Trade and Economics University. Scope of application – the activity of the Ministry of Finance of Ukraine and the Committee of Verkhovna Rada of Ukraine on Budget, regional councils. Industry - economics.
