APPLICATION OF FINANCIAL MANAGEMENT AND CONTROL IN INSTITUTIONS OF EDUCATION IN THE REPUBLIC OF SERBIA J. Eremic Djodjic 1 , I. Bosnjak 2 , S. Rakocevic 3 , S. Popovic 4 , O. Sedlak 5 , Z. Ciric 5 , A. Tomic 6 1 Educons University, Faculty of Business Economics (SERBIA) 2 Ministry of State Administration and Local Self-Government (SERBIA) 3 Mediterranean University Montenegro, Faculty of Economics and Business (MONTENEGRO) 4 University Business Academy in Novi Sad, Faculty of Economics and Engineering Management in Novi Sad (SERBIA) 5 University of Novi Sad, Faculty of Economics Subotica (SERBIA) 6 Union University Serbia (SERBIA) Abstract Purpose: Only the accurate financial statements are the basis for making correct business decisions in every organization and also in the educational institutions in the Republic of Serbia. The obligation of the public sector is to implement them. Therefore, it is necessary to design an educational institution mechanisms that will manage the budget intended for this purpose through well designed internal controls. This is the way to achieve planned costs in the future. Methodology/Approach: the authors analyze the following elements in this paper: duration/level of established financial management in educational institutions; curriculum for implementation and training of employees in order to establish financial management on a legally satisfactory level; access to initial training of teachers and other employees in educational institutions in the Republic of Serbia. Findings: Financial Management and Control (FMC) is a system of internal controls based on the concept of risk management that is established by the managers of public funds users.The system includes all business transactions, cash flows, tender procedures and contracts, assets and liabilities in accordance with the law and regulations. The progressive or comprehensive implementation of financial management and control in education institutions requires time, and innovation can take into account the following: a change in - a way of doing ("process innovation"), a change in the context in which employee training is introduced. This analysis will show whether the financial management system exists in educational institutions, what kind of work process they have derived from and how the employed teachers in the Republic of Serbia perform their work. It will also show what are the main differences in the systems of individual regions in Europe and are there historical, political and cultural reasons for these possible differences. It should enable understanding of common issues, dilemmas and controversies related to FMC. Research limitations/implications: Coordinated synergy of educational institutions, state government and legal regulations is an important requirement for unified treatment of the work process.The legal obligation of implementation the project of the FMC system not only stimulate better control of the costs of the budgetary operations of the Republic of Serbia, but also become the key element of an innovative solution that encourages the creation of new ideas. Originality/Value of paper: The benefit from the establishing the FMC system, is both for the management and employees of the educational institutions to perform their work better. The Government of the Republic of Serbia has specifically defined the problem of establishing and implementing this new management method in the public sector through the Strategy of Development. The Law on the Budget System of the Republic of Serbia stipulates that the manager is responsible for the implementation of the FMC system. This approach enables us to make all the necessary documents and implement them into regular activities. At the same time we could see the differences in relation to the same institutions of the countries in the region. Keywords: educational institutions, financial management and control, budget, internal controls, costs. Proceedings of EDULEARN19 Conference 1st-3rd July 2019, Palma, Mallorca, Spain ISBN: 978-84-09-12031-4 4382