EFFECTIVE MANAGEMENT OF PUBLIC FINANCES - OVERVIEW OF HIGHER EDUCATION INSTITUTIONS IN SERBIA

The research examines the essential approaches to the concept of management responsibility in public administration, which implies the true commitment of managers and employees to use public funds in the correct way in their daily work. Through a theoretical analysis of the relevant literature and key drivers of reforms and an empirical assessment of the quality of the established system of financial management and control through the Consolidated Annual Report on the State of Internal Financial Control in the Public Sector, the goal work is to point out that there are significant needs to improve management in institutions of higher education in Serbia, based on report the findings and recommendations of the state audit institution. The framework of public policies for higher education in Serbia in the context of higher education reforms does not only refer to their basic activity, but also integrity, transparency and responsibility in the management of the funds at their disposal, performance-based financing and quality assurance, which contributes to the effective functioning of the market and economic growing. Modest progress in this sense indicates that these institutions have not fully established the basis for good governance. The findings of the research sample are the higher education institutions that were subject to the control of the state audit institution in the previous two years, and through the analysis, the authors of this work include recommendations of audit related on management responsibility in relation to the integrative components of financial management and control. The concluding considerations point to a fundamental misunderstanding of the holders of management functions of the purpose and role of internal control mechanisms in the management system, which is a prerequisite both for the implementation of legal regulations and for effective business operations.