The Problem of Cost Management in Municipalities

To date, there have been many positive developments in Ukraine in recognition of the objective need for the establishment of real self-government as the right and ability of territorial communities to independently solve issues of local importance. The basic principles of successful self-government are independence and financial independence, which are integral parts of one whole, since independence will always be only formal if the financial dependence remains. An independent solution to the complex financial provision of economic and social development of territories within the competence of the appropriate level of local government means the independent management of financial resources, the size of which corresponds to functions and tasks. In turn, effective financial provision of the municipal entity requires careful study of the cost system, study and analysis of the structure of costs and reserves for their reduction. Therefore, in the context of the development of local self-government in Ukraine, the issue of studying the management of expenditures of municipalities is very relevant. The purpose of the article is: the study of the principles of the formation of an effective mechanism for managing the costs of municipal entities; defining tasks of cost management in the short and long term; outlining of the principles on which the management of the expenditure of municipal entities should be based. Methods of research used in the writing of the article include the application of general scientific and empirical methods of economic science, which are based on a systematic approach. Also in this work, the following general methods of research have been used as generalization and comparison, induction and deduction, analysis and synthesis. The results of the study are the identification of the basic principles of the formation of a mechanism for managing expenditures of municipal entities; outlining of the most important tasks of cost management; development of principles on which the management of the expenditure of municipal entities should be based. The scientific novelty of the study is to determine the role of human capital not only in managing the costs of the subject of municipal management, but also in the process of adapting this system to market costs. The practical significance of the results of the research reflected in the article is the possibilities of their use in the development of teaching materials for the teaching of the discipline "Municipal Management" and other economic disciplines. And also − with further research on the issues of cost management in municipal formations.