The focus of modern public administration is on the Public-Value approach. This approach emphasises the importance of recognising how stakeholders’ perceptions of administration outcomes are influenced by both the level of well-being delivered and the level of uncertainty attached to it. Resilient public administration is characterised by the capacity for adaptation and the ability to maintain operations despite disruptions. In the context of local government, the resilience of municipalities is crucial for ensuring the continued delivery of services to the community. The increasing importance of resilience in local government policy requires policymakers to be prepared for potential shocks to the municipal budget and to ensure the timely detection of risks to municipal financing. When it comes to spending, budgetary decisions should incorporate the following principles and qualities of resilience: the capability to constantly evolve and adjust based on new information, the ability to align budgets with decisions that work towards a shared goal, and the capacity to change, evolve, and adapt in response to changing circumstances. In terms of revenue, municipalities must ensure that their fiscal model can support existing infrastructure, handle changes that impact infrastructure, and maintain the provision of community services. The primary challenge in evaluating the resilience of local government in relation to financial conditions is establishing a set of indicators that can measure adherence to the aforementioned principles of resilience and ensure financial independence. This challenge is further complicated by the current trends of economic growth slowdown and rising deficits in local budgets. The study focuses on examining the tools used to assess the financial condition of municipal budgets. The evaluation of budget indicators, including their structure, dynamics, relationships, and other parameters, is crucial for analysing the socio-economic development of municipalities. Understanding the financial conditions is essential for assessing the level of financial sustainability and adaptability, as it forms the foundation for implementing socio-economic decisions and projects. The study proposes a system of indicators as part of a composite indicator for evaluating the resilience and adaptability of municipalities. This methodology will enable the analysis of the current state of municipal finances, evaluating budget resources and their utilisation, the identification of threats and risks to the budget, and developing measures to mitigate them. The research confirms the presence of specific factors that are significant for the composite indicator of municipal financial resilience in Latvia, such as the level of independence from intergovernmental transfers and the ratio of local budgets’ own expenditure to their own revenue. These findings should be taken into account when reforming the equalisation system for local finances and can also provide valuable insights for assessing the potential risks of insolvency and evaluating the socio-economic development of municipalities.