Establishment and Implementation of Financial Management and Control in the Public Sector in Bosnia and Herzegovina as an Indicator of Approaching the European Union

The implementation of the financial management and control (FMC) system in Bosnia and Herzegovina aims to integrate a modern public internal financial control (PIFC) system into the tradi tional models of public funds management. This area is one of the reform areas where Bosnia and Herzegovina must align its legisla tive framework and practices with the good practices and regulations recommended by the European Commission. The establishment and development of PIFC is also an obligation for Bosnia and Herzegovina, stipulated by the Stabilization and Association Agreement between the European Communities and their Member States, on the one hand, and Bosnia and Herzegovina, on the other. The financial management, control, and internal audit system focuses on improving transparency, financial discipline, and the targeted spending of public funds, i.e., transparent, economical, efficient, and effective management of public funds and control over their use. The subject of this paper is financial management and control in the pub lic sector, with the aim of presenting the level of achievement in estab lishing this system within public sector institutions in Bosnia and Her zegovina through theoretical research.