THE IMPACT OF INSTITUTIONAL TRADITIONS ON THE DEVELOPMENT OF THE INSTITUTION OF SPENDING UNIT IN UKRAINE

Abstract

Achieving sustainable development goals and ensuring social well-being require balanced approaches and well-founded decisions on budget funds management. This issue is especially acute during the war, when there’re increased demands on spending units of budget funds regarding the high-quality exercise of powers conferred on them in the budget process, ensuring the rational and efficient use of resources, and the effective implementation of budget programs.

It is established that cases of violations of budget legislation, embezzlement, and non-fulfillment of their obligations to communities by spending units of budget funds are not isolated. Therefore, the need arises to find out the deep roots of these problems, among which, according to our hypothesis, are institutional traditions.

The impact of stable institutional rules on spending units’ behavior has been identified, and proposals for improving the institution of spending unit in Ukraine have been substantiated, taking into account this factor. It has been established that, according to world experience, the institution of spending unit rests entirely on the decentralization of powers to effectively obtain results. Spending units have the freedom of operational management of their budgetary allocations, the freedom of informational influences on the content of indicators of their activity without instructions from above. It is shown how this concept was distorted by the Ukrainian budgeting practice of the first two decades of independence. Spending units did not get enough subjectivity for full-fledged micro-budgeting of networks, accordingly, they cannot organize their activities for the medium term. To fix this situation, it is proposed: 1) to leave the institution of spending unit to the heads of public entities — heads of territorial communities, special officials of agencies that implement projects with their own and budget funds, heads of public entities such as higher education institutions of state and communal forms of ownership; 2) to differentiate between result-driven budget allocations on the basis of accountability and own incomes of spending unit organizations. This will increase the efficiency of spending units and contribute to the introduction of medium-term budgets.