Assessment of financial condition of districts in Switokrzyskie province

In the next stage of the research the variables has been standardized. They deprive of the value titers, leading to the comparability of variables essentially incomparable. These values can then be added then. At the end, a synthetic variable was constructed, which lead to organizing transformed and normalized values of the simple features.

Calculated values of the synthetic index allowed assigning the individuals to the so-called. groups with similar features. Information which of them is in particular groups may have practical importance both for local authorities, tax authorities and investors. The conducted analysis allowed detecting groups of data. In the analysis the objects were classified into groups, not knowing at the beginning the membership of the objects nor the number of groups that arise during the procedure. The use of the analysis of the concentration is conditioned by the source of data and the expected form of the results.

Success in local development and meeting the needs of the habitants are closely associated with the performance of the management understood as the knowledge and skills of resources control: human, financial, natural spatial and development processes to the optimal use to achieve the intended results (improvement of the living conditions of the population).

The basic condition for the proper execution of local government entities' tasks is the proper management of local government finances, because on the quality of the process depends result of the management of available resources under the given conditions and in economic environment. The essence of financial management is to create conditions for the functioning of local government by creating a variety of financial resources, their distribution and allocation in these areas of activity, which are aimed at achieving the objectives of the organization.

Meeting collective needs of local communities, improving the investment attractiveness of self-government depends largely on held income, both their own and foreign, as well as on their effective use. The financial condition of the entity is understood as the ability to finance services by using collected revenues in the particular socio- economic and institutional environments, or as the ability of territorial authorities to generate the funds necessary to pay liabilities during the given period.

Dilemmas between own and external funding sources of local government and the instruments functioning within them are associated with the need of ensuring financial sources for financing activities associated with implementation tasks of a public nature. A state while leading financial policy creates legal basis of the economic and financial system of the local government contributing in this way to the development of financial policies of the individual cells of public authorities. When choosing a suitable method of gaining financial resources and appropriate external financial sources for local government the authorities should always specify the objectives pursued by their decisions. Creating the best conditions for the expansion of financial independence at all levels of local government both on the basis of their own revenues and transfers from the central budget is vital of all stakeholders.

The consequence of decentralization of public finance is diversification of the economic situation of individual local governments, and the vertical and horizontal fiscal imbalances connected with that. The discrepancy between the sources of income and necessary expenses, arising out of assigned tasks can be very large. The imbalance between revenue and expenditure of the various levels of public authority causes so called problem of inadequacy or a vertical fiscal imbalance. Local government units differ in degree of socio-economic development those differences exacerbate as a result of decentralization and increasing their independence.

To properly manage the finances it is important to make proper decisions to achieve the most favorable relation between effects achieved by local government units and the total inputs on investment, and to provide necessary funds for their implementation. The manner in which a municipality is financially managed is reflected in its ability to timely meet its obligations, its ability to finance its development. A vital fraction in the financial management is a financial analysis, which deals with the assessment of the economic subjects' efficiency and their economic and financial situation. units (art.236) are considered budgetary expenditures that are not property expenses, which include investment expenses and investment purchases.

A factor that affects equally the financial condition of local government are budgetary expenditures, reflecting executing by them the tasks. Current expenditure are sources designed to operate and maintain the existing facilities and their current functioning, such as salaries or costs of living/ maintenance. Current expenditure of the municipality are related to the basic functions of local government which is the execution of the tasks through which the municipality meets the collective needs (provides goods and services necessary for normal, everyday functioning of both its residents as well as businesses located in the area and the wider local development). This group of expenses may include: expenses carried to maintain schools, provide municipal services and smooth operation of existing infrastructure.

Investment expenses are very important as they deplete current spending but serve development objectives. These include the purchase or production of tangible assets necessary for municipalities to fulfill their tasks. To this group we mainly include objects of technical and social nature, which in the future may contribute to increasing municipal revenues by increasing investors' interest in a particular municipality or stimulate local initiative. A proper balance between current and investment expenditure should be maintained. Capital expenditure in the financial management of municipalities - next to their income - is a factor characterizing the possibility of local government units' development. Capital expenditures play an important role while pursuing investment tasks which are expansion of existing infrastructure and creating a new one on the municipal territory. Conducting and investment activities determine the municipalities' performance of the tasks. Thus, investments are the means which enables performance both of current tasks and those that will be valid in the future. Thanks to their conducting a local government can provide access to the services at the highest possible level and at the same time corresponding to their needs to their citizens.

Swietokrzyskie region covers an area of 11.710 sq km (15th in the country), the population is almost 1,270.3 thousand (13th place). It consists of 102 municipalities and 13 counties and one city with county rights- Kielce city.

In the northern part of the province (formerly Old Polish Industrial Region) since many years heavy industry has been developing (it is currently experiencing a difficult period) and metallurgical (ostrowiecki district), metal (skarzyski district), mechanical (starachowicki district), foundry (konecki district). The southern and eastern parts of the region are dominated by agriculture, particularly well- developed gardening and fruit-growing industry (district of Sandomierz). Presented characteristics of the region is reflected in the statistics showing data: total revenue per capita; own revenues per 1 inhabitant; population; entities registered in REGON per 10 thousand population; average monthly gross salary; registered unemployment rate; spending on one person and the surface of the county.

Counties' revenues depend largely on the economic situation in the entire region. While assessing the financial position of districts the level of own revenues, income and totoal expenditure is important. The current system of income may indicate differences in the quality of public services provided by counties, as well as an excessive dependence of counties' finances on transfers from the state budget.

The level of own income which is vital from the point of view of financial independence was highly diversified in Swiqtokrzyskie (Table 2 and Figure 1).

government financial local

Expenditure is the second element strongly affecting the financial condition of the districts. Investment expenditures are very significant here (for development purposes, increasing the income of the county, increasing its attractiveness) and current (associated with responding to consumer collective needs, providing goods and services to the regular, everyday functioning of both residents and businesses, as well as with the execution and performance of basic tasks).

Tabel 2. Selected indicators characterizing features of counties in Swigtokrzyskie Voivodship in years 2008 and 2012.