The local governments of settlements fulfi ll not only their basic duties but also a great deal of other tasks as well that infl uence the communities’ living conditions and quality of life, and through the way inhabitants feel also have an impact on the retention capacity of the settlements. The social policy of local governments is fulfi lled by the governments. Financing the tasks and their risks have a great effect on the realization of sustainable local governing. The aim of this study is to review the Hungarian local governmental system assessing some anomalies of the fi nancing of local governments and to draw attention to the risk of local governments, to the possibilities of how to reduce their operational risks highly considering the social political goals of the local governments, the role it has in developing and improving the people’s quality of life
