The financial condition of communes in Poland (2010 vs. 2019)

Abstract

PURPOSE: The examination and assessment of the financial condition of communes in Poland in the spatial aspect, using the standard indicators related to financial independence and financial burdens imposed on their budgets by current expenditure, and the authors’ indicators related to the possibility of communes to satisfy the requirements of residents.

DESIGN/METHODOLOGY/APPROACH: The study used the methods of descriptive statistics. Detailed analyses were carried out based on the authors’ calculations using MS Excel.

FINDINGS: The financial condition of communes in Poland is varied when interpreted in terms of time and spatially, when measured with standard indicators used by, among others, the Ministry of Finance in Poland, and with the measures proposed by the authors, it differs, and therefore the changes in the finances of these units are assessed differently. Also, the variations in the values of the standard indicators do not explicitly indicate the direction of changes of the financial condition of communes.

PRACTICAL IMPLICATIONS: State institutions in their work on the changes in the system of revenue in LGUs in Poland, aimed at adjusting the amounts of the financial resources available to them to the range of tasks allocated for realization. Local authorities in the annually determined amounts of financial resources which they can implement to realize their tasks, having included the burdens resulting from the long-term contractual obligations they are bound by.

ORIGINALITY/VALUE: Expanding the research on the financial condition of LGUs by approaching this matter through the prism of indicators reflecting the possibilities of local authorities to define the amounts and the directions of their budgetary expenditure.