Zhadan O. Financial Control of execution of local budgets.

The thesis focuses on the research of theoretical foundations, methodological tools, and organization of the financial control over meeting the local budget targets in relation to revenue and taxes. Based on the results of researching the conditions and problems of local budget revenue formation, the work justifies the following need: improvement of the methodological approach to distributing the state budget subvention among local budgets for the purpose of taking measures targeted at social and economic development of certain territories with a view of potential revenue increase of the object whose construction or reconstruction is financed by means of the subvention. That will promote the development of the region’s infrastructure and the local budget’s increase due to the personal income tax inflow resulting from new jobs creation as well as provide scientifically grounded and unbiased territorial allocation of the local budget funds. The assessment of local budgets’ tax distribution has revealed that most funds are spent on education; however, in comparison with the developed countries of the world, these taxes are significantly higher in Ukraine and require well-grounded planning, efficient spending, and tougher financial control over the expenditure of funds. The analysis has been made of the national and international budget revenue and tax classification provided in the Manual on Government Finance Statistics (2014); their structural differences have been revealed, which makes it impossible to use the same approach to the evaluation and comparison of budget execution data in Ukraine and other countries. It has been planned to introduce changes into the classification structure of budget revenues (to classify local taxes and dues into the categories «Income Tax» and «Property Tax», based on the object of taxation; to classify transfers into current and capital ones according to their economic characteristics) and tax revenues – in the part on grouping subsidies depending on the subject that receives them. That will help to approximate the national budget classification to the international one, improve the quality of planning and control over budget revenues and taxes as well as establish a unified information system of budget data balance on all levels of the government. A deeper insight has been made into the methodological techniques which can be applied to control revenues and taxes. It has also been proposed to specify the techniques by adding the following ones: logical control (over revenues – establishing the correspondence between planned revenues and those which the local government may gain; over taxes – correspondence between budget commitments made to the State Treasury Service of Ukraine and those that are attributed to the budget holder) and analysis of periodical change of data (checking whether there are changes and what the reasons are for the change of procurement agreements). That will increase the performance of authorities responsible for monitoring the efficiency of revenue and tax inflow. With a view of increasing the accuracy of local budgets’ planned tax indices and tightening the control over the economic basis of taxes distribution, a proposition has been justified as for reasonability of control over the evaluation of the need in financing the procurement of goods (work, services) and planning taxes in respect of their functional classification with their simultaneous distribution according to economic characteristics, which will allow monitoring the amount of costs by each economic aspect and direct spending the costs onto the needs that will promote more productive use of costs for the society’s sake. It has been proved that when establishing the indicators of budget programs' efficiency it is necessary to take into account the possibility to evaluate their indices in quantitative and monetary forms. It has been proposed to set the measurability of indicators as an efficiency evaluation criterion. Argumentation has been given to the necessity to perfect the list of efficiency indicators for the budget program «Provision of General Secondary Education by Comprehensive Educational Institutions» by incorporating to this list certain indicators of expenses, goods, productivity, and quality. That will enhance the evaluation of budget programs' reasonability and facilitate decision-making processes concerning further management of local budgets’ financial resources. Much attention has been paid to researching the organization of financial control over the appropriate target-oriented allocation of local budgets’ funds, i.e.: it has been substantiated that there is a need for including into the Rules on Drafting Passports of Local Budget Programs and Reports on their Execution the requirements for specifying the uses of budget funds, which will reflect the economic substance of taxation and tighten the control over the target-oriented allocation of budget funds.