Recognition specifics of public sector organizations’ financial insolvency

The current state of the Russian economy is characterized by the economic entities’ unstable financial position. Under the influence of various internal and external factors, an entity may not have the opportunities to repay its current payables, i.e. to be financially insolvent. In recent years, it has become increasingly obvious that insolvency can be found not only in commercial organizations, but also institutions operating in the public sector of the economy, and seemingly protected by fairly stable sources of financing. The purpose of the work is to study the manifestation specifics of the public sector organizations’ financial insolvency. The paper uses the methods of theoretical research (abstraction, analysis and synthesis, mental modeling), as well as the methods of empirical research (observation, comparison, measurement). Based on the study of scientific papers published by Russian economists, alternative approaches to the concept of “bankruptcy” that take place in Russian science are analyzed; the nature of this phenomenon is studied. The article describes the types of bankruptcy of the organization, as provided by the system of normative regulation of the state, and defined by the researchers of bankruptcy as an economic phenomenon. The authors carried out a comparative analysis of the economic conditions of bankruptcy procedures of financial insolvency recognition for commercial organizations and public sector organizations. The relationship between the concepts of “financial insolvency” and “inefficiency” of a public (municipal) institution is revealed. The influence of the legal status of the institution (state, budget, autonomous) on the decision-making procedure for its liquidation is revealed. Possible reasons for initiation of a public (municipal) institution liquidation by state bodies are indicated. The main (key) stages of the public (municipal) institution liquidation procedure are determined. The current problems of legislation application on insolvency (bankruptcy) in relation to public (municipal) institutions are revealed. The measures for their elimination are suggested.