Conceptual Foundationsof the Financial Control of Government Borrowing at The Local Level

Abstract

In the current conditions of the budget decentralization reform, the need of local governments for additional financial resources against the background of instability and insufficiency of financial revenues is particularly relevant. Local borrowing can provide coverage of insufficient funding of budget expenditures. At the same time, there are significant risks to the debt security of both the state and its regions, the occurrence of which is prevented by adequate measures of state financial control. The purpose of the article is to define the conceptual foundations of the state financial control over public borrowing at the local level and ways to improve it. The article systematizes the author's approaches to the definition of "local borrowing", as well as their types and uses. The organizational and legal bases of various forms of local borrowing are considered. As local loans are an important source of revenue for local budgets, local budget revenues are analyzed and the state of local borrowings is assessed. The factors contributing to the attraction of local borrowings are summarized.

The essence and directions of financial control over local borrowings are revealed, the corresponding powers and functions of financial control bodies are considered. The powers of the Ministry of Finance of Ukraine and the Accounting Chamber of Ukraine in the field of auditing the effectiveness of public debt management are defined. The system of audit of the efficiency of public debt management of Ukraine and the process of internal audit of the efficiency of public debt management by the Ministry of Finance are outlined. The directions of improvement of financial control over local borrowings, in particular, in the aspect of rationing the order of state financial control over local borrowings on the basis of a clear distribution of functions and powers of control bodies at the state and regional levels are outlined.