PRAGMATISM OF RISK ASSESSMENTS OF LOCAL BUDGETS
Proposed own methodical approach to the assessment of the risks of local budgets (including budgets of united territorial communities (UTC) in the conditions of reforming the system of local self-government and decentralization of power. Тhe approach takes into account the following steps: 1) identification of indicators of the state of local budgets – expenditures of general and special funds of local budgets without intergovernmental transfers; general and special fund revenues of local budgets without intergovernmental transfers; 2) the establishment of statistical characteristics of the distribution of selected indicators of the state of local budgets; 3) identification of functions of distribution of indices of local budgets and determination of the value of budgetary risks for their evaluation;4) determining the degree of riskiness of local budgets of Ukraine by calculating the values of the probability of large deviations from the mathematical expectation of the values of the selected indicators.
On the basis of a specific methodology, an assessment of budgetary risks was carried out using reliable empirical data for each type of risk, such as a sharp decline in local budget revenues and rapid growth, and a drop in local budget expenditures for general and special funds. Attention is drawn to the fact that the indicators obtained as a result of assessing the probability of a risk of local budgets of Ukraine on incomes and expenditures testify to the empirical objectivity of the existence of high budgetary risk. the main manifestation of which will be the failure of local budgets. In this context, the necessity of introducing models and tools of risk-oriented financial management at the local level for the long-term perspective is substantiated.
The proposed approach is the basis for the formation of risk-oriented decision-making tools in the budget process at the local level. It enables to improve decision-making tools in the management of local finance and UTC finances. The conducted research outlined the actual scientific and practical task, which requires a separate solution, – assessment of the risks of local budgets of Ukraine in the regional aspect.