MANAGEMENT OF SOCIAL PROJECTS IN COMMUNITIES AMIDST DECENTRALIZATION AND LOCAL BUDGET SHORTFALLS

Abstract

Amidst financial decentralization – compounded by the war and a chronic shortage of budgetary resources – territorial communities face an urgent need to enhance the efficiency of social sector management. The traditional line-item budgeting approach to fund allocation is losing its effectiveness, necessitating the adoption of project-oriented public governance. This article aims to develop theoretical-methodological foundations and practical tools for managing social projects within territorial communities, thereby optimizing the use of limited financial resources and ensuring institutional capacity. The study employs a combination of general scientific and specialized methods: a systems approach to examine social projects as an integrated system; classification analysis to group projects based on content, implementation timelines, and funding methods; and multi-criteria analysis alongside cost-benefit methodology to create a project ranking matrix based on social utility, urgency, and strategic focus. The research outlines the structural characteristics of various project types (infrastructure, service-oriented, and institutional) and analyzes how these characteristics influence the selection of funding sources. The study substantiates the use of the opportunity cost criterion to identify hidden losses in expenditure allocation and to mitigate the risk of underfunding critical initiatives. Furthermore, it proposes mechanisms to address budget deficits by attracting non-budgetary capital, such as public-private partnerships, social entrepreneurship, international grant programs, and charitable contributions. The role of the institutional framework for project management has been defined, encompassing the operation of project offices, the digitalization of processes via the DREAM system and CRM tools, and the engagement of residents in decision-making through participatory procedures. The findings provide a practical foundation for local government executive bodies to develop local development programs, optimize budget expenditures, and build a prioritized project portfolio for attracting international aid and private investment.