Distribution of local expenditure for sustainable development of united territorial communities (economic and mathematical approach)

The paper analyzes current expenditure system of united territorial communities, which includes funding of education, culture, health care, social safety net, housing and community amenities, infrastructure development, which together ensure territories` sustainable development. It has been proved that the current system of local finances` management does not support their sustainable development and does not introduce viable mechanisms for the effective expenditure distribution inside united territorial communities (UTCs) between the settlements within them. The following arguments have been shown: UTCs include settlements characterized by different population size and income per capita. Due to migration processes the population size is unstable. The model of expenditure distribution between settlements of UTCs for provision of public goods using a system of linear homogeneous difference equations, taking into account national economy specifics has been proposed based upon foreign experience. It has been proposed to calculate the population size at certain time intervals, taking into account the expected (planned) changes of each settlement` s population within UTCs and to distribute programmed expenditure for providing public goods within territories` sustainable development capacity. Keywords—united territorial community, budget expenditure, public goods, population size, migration I. STATEMENT OF THE PROBLEM IN GENERAL WAY AND ITS RELATION TO IMPORTANT SCIENTIFIC OR PRACTICAL TASKS Transformation of the administrative and territorial system of Ukraine is one of the reform components that Ukrainian society badly needs. One of the ten priorities of the “Ukraine – 2020” Strategy for Sustainable Development” [1] approved by the Presidential Decree is decentralization and state socio-economic system reform, restructuring of the business entities` territorial organization. Therefore, Ukraine and its economy need urgent scientific substantiation and practical implementation of measures aimed at sustainable geospatial development of the country amid transformation of its administrative territorial structure. Building a system of integrated, multi-criteria management of natural and economic systems, which include united territorial communities (UTCs), which will ensure regional and national sustainable development over the long term, remains a national problem. National sustainable development can only be ensured if UTCs organized because of decentralization are self-sufficient and financially viable. Thus, the UTCs face the following tasks: first, to form the revenue part of their budget more effectively; secondly, to move to self-sufficiency and rational resource and expenditure planning, which in the future will make territorial communities economically selfsufficient and financially viable. That is why, in the context of decentralization, the problem of the effective system of territorial communities` finances management building becomes especially relevant. II. ANALYSIS OF RECENT STUDIES AND PUBLICATIONS THAT HAVE INITIATED PROBLEM SOLUTION, WHICH THE AUTHOR REFERS ON Analysis of foreign decentralization experience has been conducted in the works of Wollmann H. (Denmark), Andre C., Garcia C. (Finland), Baldershrim H., Kulesza M. (Poland), Feltensteina A., Iwata S. (China) and others. [2-4]. Jourmard I., Giomo C., E., Salachna J. [5] studied models of local self-government, mechanism of local budgets` formation and models decentralized budgeting in European countries. Ukrainian scholars like Batalov O.A., Datsko O.I., Marunyak E.A., Lisovsky S.A., Murkovich L.L.., Oliynyk D.I., Oliynyk Y.B., Pavlyuk A.P., Rudenko L.G., etc. [6-11] dealt with current aspects of territorial communities` and local self-government`s development problem solving. III. HIGHLIGHTING UNRESOLVED ISSUES TO WHICH THE ARTICLE IS DEVOTED The decentralization reform was launched in 2015. Appropriate legal framework was formed prior to its beginning, namely, amendments to the Tax Code of Ukraine and the Budget Code of Ukraine were adopted, which significantly expanded local self-government`s financial capacity. 7th International Conference on Modeling, Development and Strategic Management of Economic System (MDSMES 2019) Copyright © 2019, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). Advances in Economics, Business and Management Research, volume 99