THE IMPROVEMENT OF THE KOSOVO’S LOCAL SYSTEM FINANCIAL PROBLEMS

Abstract

The Kosovo's municipalities are characterized by different development opportunities. Sustainable development local system plays an
important role of financing them. For the improvment of local financial system it is necessary to make changes from the goverment and
municipality. Mostly, the sources of financing of municipalities in Kosovo are: Revenue from government grants and own revenues. These
grants and revenue generated by municipalities are considered insufficient for local sustainable development because it represents a
decentralization of conditioned and incorrect equity in distribution, due to lack of data precisely the number of population and motives
different policy aimed at the extreme centralization of financial resources. With the current funding law, municipalities would still remain the
basic work, without a real possibility of other investments. According to some research fiscal decentralization to municipalities considered
good chance of local development. While a state claims to be included in the EU and to have sustainable economic development should
not depend on revenues of VAT and customs. Today, even in states with more centralized tradition as Russia and China, a quarter of the
value of VAT was left to regional or local governments. German professor Gunther Hendkamp, local government expert at the Council of
Europe, decentralization of treats more as economic as political imperative, since according to him in the spotlight, is the economic
efficiency of public expenditure. Optimal solution must be sought in the optimal combination of these differences depending on the specific
conditions of each state. However, for public sector the rebalance ion and consistent transfer of powers and public finance from central to
local level also includes the EU rules. Decentralization of fiscal really realized just by providing their own local resources, increased
accountability and budget transparency. Drafting of the law and public borrowing strategies with significant interest rate and Treasury bill
issuance (bonds) to municipalities, will help municipal financing system and would increase the number of different investment capital.
Simultaneously, to increase the efficiency of local financial management and improving its system needed: reform of human resources
and professional software, design strategies for increasing the revenue collection Own, The rationality of public expenditure, adoption of standards unique to the evidence accounting, reporting and accountability, which strengthen and transparency in public.