Local self-government authority default procedure: experience for Ukraine ; Процедура дефолту органу місцевого самоврядування: досвід для України
Problem setting. Local self-government authorities have been given a wide range of functions and tasks under the decentralization in Ukraine. They are empowered to raise financial resources from various sources of income, to own and manage communal property, securities portfolios, and to raise loans for capital investment projects. But local self-government authorities can find themselves in a financial crisis for various reasons. There are limited resources of the territory (budgetary and extra-budgetary), inability to fulfil local budget revenue target indicators due to changes in regulations. Therefore, the international practice of financial security in public administration provides and clearly regulated default procedure of the local self-government authorities or municipal default (bankruptcy). In Ukraine the algorithm of behavior of local self-government authorities in the appearance of bankruptcy has remained neglected at the legislative level.Recent research and publications analysis. The issue of local self-government authorities' default is poorly researched both in economic theory and in public administration. Ukrainian scientists such as I. Babukh, A. Galchinsky, V. Kravchenko, N. Lubkay, I. Lunina, G. Monastyrsky, P. Nikiforov, S. Stetsenko emphasize the necessity to fulfill this niche in theoretical and practical terms. Mechanisms of implementation of procedures of local (municipal) bankruptcy are devoted to separate scientific works of S. Dyachenko, I. Sofinskaya, S. Yurii and others. However, a comprehensive solution to this problem and adaptation mechanisms for Ukraine has not been worked out yet.Highlighting previously unsolved parts of the general problem. Therefore, local self-government authorities' default procedures require thorough research and development of implementation the mechanisms in Ukraine.Paper main body. Unlike corporate bankruptcy, which can lead to the liquidation of a business entity, defaulting on a local self-government authority is a safeguard procedure. The purpose of the default procedure is to pay off the obligations to creditors and restore the financial self-sufficiency of the local self-government authority.The foreign experience of default mechanisms for local self-government authorities are examined in this work. The causes, consequences and ways of resolving the defaults of these cities are highlighted in this article.Local self-government authorities' defaults are classified into three main types. They are: a technical default arises from the non-performance of credit agreements that are not directly related to the payment of interest and principal; non-financial default implies the necessity to attract unplanned reserves for debt service or reserve loans; financial default, the most severe type, refers to the non-payment of interest or principal.Three basic elements of the mechanism of local self-government authorities' defaults are distinguished. There are: an identification of the entity initiating or deciding the default procedure; adjusting the local budget to ensure protected expenditures and ability to service a debt; negotiation procedures between the obligator and creditors to restructure the debt and potentially reducing it.The significance of development and regulatory consolidation of the algorithm behavior of local self-government authorities in case of bankruptcy signs is proved. The key functions of this legislation are identified.The peculiarities of the "extraordinary" budget, which is valid for the period of studying the legality of all decisions of the local self-government authorities, which probably led to the financial crisis, are considered.The list of management actions during the procedure of local self-government authorities' default aimed at overcoming the crisis is presented.Conclusions of the research and prospects for further studies. Local self-government authorities are becoming more susceptible to financial problems, which are more commonly experienced by private-sector organizations taken into account the significant empowerment of local self-government authorities under decentralization. The uniqueness of municipal default procedures is that the local self-government authorities are not private companies that can be sold and distributed if they cease to be successful. Therefore, the development of a clear mechanism for implementation the local self-government authorities' default procedure in Ukraine and the establishment of relevant criteria, conditions, and responsibilities in a separate legal act make actual further scientific studies of the local self-government authorities' features of the default procedure in Ukrainian realities. ; Розглянуто закордонний досвід механізмів дефолту органів місцевого самоврядування і проаналізовано стан наукової та практичної розробленості проблематики в Україні. Доведено актуальність розробки та нормативно-правового закріплення алгоритму поведінки органів місцевого самоврядування при появі ознак банкрутства. Визначено основі типи дефолтів органів місцевого самоврядування, базові елементи механізму їх врегулювання, функції профільного законодавства та наведено перелік управлінських дій, спрямованих на подолання фінансової кризової ситуації.