ORGANIZATION OF ACCOUNTING IN LOCAL SELF-GOVERNMENT BODIES: CURRENT STATE, PROBLEMS, AND PROSPECTS
Main Article Content
Abstract
Introduction. The modernization of accounting in local self-government bodies has become an essential prerequisite for improving public financial management in Ukraine under the conditions of decentralization, European integration, digital transformation, and post-war recovery.
Purpose. The purpose of the study is to identify the main directions for improving the organization of accounting and accounting policy in local self-government bodies, to determine current methodological and practical problems of accounting and taxation, and to develop recommendations for their solution in the context of digitalization and institutional transformation.
Results. The study demonstrates that the accounting system of local self-government bodies has significant sector-specific features caused by the nature of public administration activities. Particular attention is paid to accounting for earmarked financing, humanitarian assistance, land resources, lease transactions, war damages, and the provision of non-monetary benefits to community members. The research identifies methodological deficiencies in the widespread accounting treatment of valuable gifts provided by local governments, proving that the payment of personal income tax and military levy from budgetary funds constitutes misuse of public resources. A legally compliant accounting model is proposed, based on advance reimbursement of tax liabilities by recipients (or their legal representatives) and the application of the in-kind coefficient when determining the taxable amount. Furthermore, the study substantiates the importance of digital transformation through ERP systems and integrated accounting software, which improve transparency, strengthen internal control, automate accounting procedures, and reduce the impact of human error. Recommendations are also provided regarding the modernization of accounting policies to reflect legislative changes related to land accounting, lease operations, war damage assessment, consolidated reporting, and sustainability reporting in accordance with European Sustainability Reporting Standards.
Originality. The scientific novelty of this study lies in its comprehensive approach to examining the organizational and methodological aspects of accounting in local government bodies under current conditions of transformation. The paper develops an improved accounting approach for taxation of non-monetary benefits that eliminates violations of budget legislation and proposes practical directions for updating accounting policies considering digitalization, post-war recovery, and European integration requirements.
Conclusion. The development of accounting in local self-government bodies should be based on continuous modernization of accounting policy, harmonization with IPSAS and national accounting standards, wider implementation of digital technologies, and strengthening of financial transparency. The proposed accounting model for taxation of valuable gifts contributes to lawful budget execution and more effective financial management. Further development should focus on expanding digital accounting technologies, improving financial and non-financial reporting, enhancing land resource accounting, assessing war-related losses, and integrating sustainability reporting into the management of territorial communities.
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