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Territorial self-government is an independent entity that has a certain scope of freedom in deciding on the path of development of the subordinate area, common property, and implementation of public tasks. The aim of the study is to assess the intra-regional diagnosis of the level of the poviat’s financial situation relative to the development potential. The data used to conduct the study refer to the years of 2009 and 2016; they come from the Local Data Bank and cover 101 poviats of Eastern Poland. The poviat can carry out its tasks when it is equipped with stable and efficient sources of income. The level and structure of budget revenues determine investment activity. The socio-economic space of the poviat’s activity is a multi-element system. It achieves different levels of development depending on the structure, equipment elements, as well as the quality and complexity of the links between them. The ability of a poviat to operate can be seen as a set of factors that are mutually related to each other. These factors include: technical infrastructure, knowledge, innovation, regional product, eco-development, geographical location, finances. These factors depend on the potential inherent in the region, activity in the sphere of planning and implementation of regional policy by regional self-government authorities, the state’s economic policy, and the standards of structural policy and EU cohesion policy. These factors are not unchangeable over time; therefore, they should be subjected to continuous and ongoing analysis. The synthetic measure of the financial situation according to the average value of the 2007–2016 years was in the range from 0.24 to 0.49. Poviats with a higher rate of the synthetic financial situation are better in terms of the measure of development. The level of the indicator is influenced by: the economic character of the entity and the function of the area, economic potential, financial situation, quality of the natural environment and infrastructure. The management of financial resources is of special importance in the functioning of poviats. They affect the economic situation of the local government, the conditions for the implementation of tasks. Financial resources are the basis for the operation of individuals and a condition for the implementation of the tasks imposed on them, they determine development and are an expression of the potential for economic development. The situation of the surveyed units varied. The ranking of cities in the ranking did not change substantially in the subsequent years. It was confirmed that financial resources are the basis for the operation of individuals and a condition for carrying out the tasks imposed on them, determine development, and reflect the potential for economic development.

INTRAREGIONAL DIVERSIFICATION OF THE LEVEL OF THE FINANCIAL SITUATION OF THE POVIATS OF EASTERN POLAND IN RELATION TO THE DEVELOPMENT POTENTIAL