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INTRODUCTION The issues of decentralization are relevant from the standpoint of different legal sciences, particularly financial and legal. The democratic transformations taking place in Ukraine, the activation of the processes of formation of civil society institutions and the building of a democratic, social and legal state require a combination of all directions of modernization of contemporary Ukrainian society and an effective improvement of the mechanism of state power, which in turn requires adequate financial support. When the state became independent, the processes aimed at the formation and development of local self-government, according to the European model, became more active, moving away from subordination of local authorities to state authorities, as it used to be during Soviet times. Over the years of independence, the concept of local authorities has changed several times. Back in December of 1990 (later in the version of March 26, 1992), the Law “On Local Councils of People’s Deputies, Local and Regional Self-Government” was adopted, according to which the councils were limited to the functions of local and regional self-government. Meanwhile the executive functions were transferred to the representatives of the President of Ukraine in the regions and districts, as well as in the cities of Kyiv and Sevastopol. The reform of local government was suspended since February 1994, when the Verkhovna Rada adopted the Law “On the Formation of Local Authorities and Self-Governance” and returned power to local councils and their executive committees. After the adoption of the Constitution of Ukraine, the executive power in the regions and districts of Kyiv and Sevastopol was transferred to local State Administrations, that became accountable to and controlled by the executive bodies of a higher level. The powers of local State Administrations are defined by the Constitution of Ukraine by Article 119 and the Law of Ukraine “On Local State Administrations”, adopted on April 9, 1999 1 . In accordance with this Law, heads of local State Administrations are appointed by the President of Ukraine on the submission of the Cabinet of Ministers of Ukraine for the term

FINANCIAL DECENTRALIZATION AS A FUNDAMENTAL CONDITION FOR INDEPENDENCE OF LOCAL AUTHORITIES