Onischenko I. S., Rieznik M. A.

Oles Honchar Dnipropetrovsk National University, Ukraine



The budget is a prerequisite for financial stability of the state, it should serve as a financial constitution. Currently, Ukraine doesnt have and effective budgeting system.

The budgeting process is activities regulated by the legal standards connected with the preparation, review, approval of budgets, their implementation and control of their implementation, examining reports on the execution of budgets that are part of the budget system of Ukraine.

The budgeting process has the following stages:

- drafting budgets;

- consideration of the draft law and adoption of the law on the state budget of Ukraine, decisions on local budgets;

- executing the budget and giving effect to the decisions on local budgets;

- preparation and review of a performance report and a decision on it.

The current budgeting process has a number of advantages and disadvantages, which are as follows: firstly, the current revenue base in the budgets of all levels doesnt make it possible to carry out complete funding and meet the need for budget funds; secondly, the forced measures for planning and implementation of the budget reduces the possibility of development of institutions, corresponding networks, which has negative consequences, since schools are not provided with new teaching aids and textbooks, hospitals dont get equipment and medical supplies that are necessary to ensure the health of the nation, retired people and low-income citizens are left without retirement benefits, social security payments and wages, government-sector employees do not receive a salary; thirdly, the current budgeting process does not provide full control over the use of public funds.

At the present stage of development of Ukraine, improving the budgeting process remains a very urgent task; its execution will help to successfully implement the strategic objectives of the state in economic and social development. Accordingly, improvements are needed in each of the stages of the budgeting process.

The main problems of the modern budgeting process in Ukraine are the following ones:

- objective budget planning, which could provide real budget revenues;

- preparation and execution of special budget programs;

- improving the efficiency and transparency of budgetary funds;

- provision of effective budgetary control at each stage of the budgeting process.

The methods of budget planning are becoming more and more important while drafting the budgets. The significance of budget planning goes without saying, because objective and realistic plans are the key to effective budget execution and financing specific expenditure items in full.

According to the Budget Code of Ukraine there was introduced a program-target method of budgeting that requires the improvement of methods of budgeting.

Result-oriented budgeting is the method of planning, implementation and monitoring of the budget execution, which provides the distribution of budgetary funds in accordance with the goals, objectives and functions of the state, taking into account the priorities of the state policy and social value of expected immediate and end outcomes of the use of public funds.

Application of this method requires the introduction of relevant policies and procedures in the budgetary process, including:

improving strategic state planning;

increasing the responsibility of managers as for forecasting and budget execution.

Optimization of budgetary organizations provides a clear definition and differentiation of budgetary institutions, which should be under the jurisdiction of the respective spending unit. This clear subordination will enable to perform tasks aimed at implementing budgetary programs and to optimize distribution of budgetary funds for spending.

Effective budgeting process is impossible without a properly organized financial control. What is important is the combination of internal and external monitoring the compliance with the legislation on the drafting, review, implementation of the budgets of all levels, performance of the budget fund spending units.

There is a problem of duplication of monitoring functions by the bodies of financial control at certain stages of the budgeting process. In this regard, one of the objectives of improving financial control is to define the tasks and responsibilities of each department.

An important step in this direction is to determine responsibility at the stage of planning and use of budgetary funds.

The concept of offenses covers the following elements:

- improper use of financial and material resources;

- failure to effectively implement the budget and other decisions;

- fraud or error;

- failure to file timely and accurate information on financial and other resources.

Ukraine has gained and accumulated some experience of openness and transparency of the budgeting process, i.e. when the information about the budget is made public and the budgeting process is quite open, so that citizens better understand and actively support the initiatives of local authorities. One of the aspects of such transparency is that the information is made known via Internet and by publishing a draft budget in local newspapers.

In conclusion, we can say that for the financial plan is adjusted to changing circumstances during a year. Many cities in Ukraine also improved their budgeting process, creating community advisory committees and working groups. Such groups focus on economic development, public services, strategic planning, tourism and on giving aid to the government authority officials to set goals, priorities, a desired level of service provision. Recommendations of such commissions and working groups have contributed to the adoption of strategic plans, resulting in funding of new important projects and areas of activity for the benefit of the entire community.


List of references:

1. . .  : . . / . , . . . . : , 2006. 240 .

2. . : / . , . // . 2010. 4. . 4654.