Provisions for financial risks in the commune: Analysis of legal, financial, and accounting solutions
Provisions for financial risks in the commune: Analysis of legal, financial, and accounting solutions

Summary/Abstract: Economic activities, as well as those from public sector entities, are also accompanied by the riskthat is covered by obligatory or voluntary provisions that are simply understood as accumulatedfunds. The purpose of creating these provisions is very diverse. The aim of this article is to identifythe awareness and behavior of municipalities towards the risks that accompany the implementedpublic tasks resulting in the creation of provisions. There are two hypotheses that were adopted:municipalities gather limited provisions of a certain type, and municipalities do not create optionalfinancial and balance provisions. Research carried out shows that not all municipalities meet thestatutory requirements for the creation of obligatory provisions. At the same time, the first thesishas not been confirmed, while the second thesis has been proven. The awareness of municipalitiesand their management in terms of the risks of conducted activities in the established provisions isnegligible and unsatisfactory. The general information provided by local government units aboutinsufficient income and revenue may explain, at least partially, the observed phenomenon

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