The study shows that the first problem impeding municipal work is the inadequate formation of municipalities and municipal unions which has undermine the entire municipal sector. The second problem is municipalities’ limited administrative and financial independence, due to the state’s burdensome bureaucratic processes, the failure to disburse revenues from the Independent Municipal Fund on time and according to the specified amounts, the lack of transparency in the Fund’s operations, as well as issues related to the legitimacy of representation, oversight, accountability and participation mechanisms and many other complex problems.