Education is financed to a significant extent from public budgets. However, the financing of individual educational levels starting from early childhood education and care, school education to higher and further education differs significantly.

Below is a list of approximate distribution of funding by source for each education level (the sum of the shares in each row should equal 100).

*Table explanation: share funded by the government implies revenue by the government and local and regional self-government units (LGUs); share funded by others implies income from abroad in the case of schools, and in the case of higher education their own income in the market, and share funded by households implies revenues that record payments from citizens or student participations. There are no available data on the distribution of funding by source for adult education and training.

The funds for public needs in the area of single-structure (primary and lower secondary) education and upper secondary education are provided from: state budget; local and regional self-government units’ budget; founder’s sources if the founder is any other natural or legal person; income from the commercial activity and other designated income; fees paid for special services and activities provided by the institution; donations and other sources in accordance with the law.

In accordance with the Financing of Local and Regional Self-Government Units Act, the representative body of LGUs, independently, or with another party, monitors the execution of the budget, financial transactions and the use of funds in accordance with their designated purpose. In accordance with the statute, the municipal mayor, the town mayor or the county prefect monitors the financial, material and accounting affairs of the budgetary and non-budgetary beneficiaries of LGUs. The Ministry of Finance oversees the compliance with the law in the use of budget funds by LGUs and their budgetary and non-budgetary beneficiaries.

According to the Primary and Secondary School Education Act, the supervision and control of the dedicated spending of funds provided to school institutions from the state budget is performed by the Ministry of Science and Education, while the supervision and control of the dedicated spending of funds provided to school institutions from the budget of LGUs and other sources is performed by the founder of the school institution (the county or the municipality/town).

The Ministry of Finance performs the tasks of financial and budgetary supervision of budget beneficiaries and LGUs.

The State Audit Office audits state revenues and expenditures, financial statements and financial transactions of state sector units and local units in accordance with its plan.

In addition, the Ministry of Science and Education, as well as counties, the City of Zagreb, cities that are county seats with more than 50 employees and cities with more than 35,000 inhabitants, must establish an independent internal audit unit.

Universities are also obliged to establish internal audit function.

Early childhood education and care

In accordance with the Preschool Education Act, the founder of the kindergarten is obliged to provide funds for the establishment and work of the kindergarten. The kindergarten can be founded by the Republic of Croatia, LGUs, religious communities and other legal and natural persons.

Pursuant to Article 42 of the National Pedagogical Standards for Preschool Education, costs of accommodating children in kindergartens (i.e., economic cost of kindergarten) are borne by the founders of the institution and parents (parental share in the cost of kindergarten). The cost of accommodating the child in kindergarten covers the following costs: expenses for the staff (gross salary, compensation and material rights of the staff) employed by the provider of the preschool education programme; child nutrition; conditions of accommodating children (material expenditure, energy and utilities, current maintenance of the facility and equipment); supply of furniture and equipment; supply of small materials.

School education

According to the Primary and Secondary School Education Act, the funds for public needs in the area of primary and secondary education are provided from:

• state budget
• local and regional government unit budget
• founder’s sources if the founder is any other natural or legal person
• income from the commercial activity and other designated income
• fees paid for special services and activities provided by the institution
• donations and other sources in accordance with the Act.

According to the Act, the supervision and control of the spending of funds provided to education institutions from the state budget is performed by the Ministry of Science and Education, while the supervision and control of the spending of funds provided to education institutions from the budget of t LGUs and other sources is performed by the founder.

The Department for Financial and Budgetary Supervision within the Ministry of Finance performs the tasks of financial and budgetary supervision of budget beneficiaries and LGUs.

The State Audit Office audits state revenues and expenditures, financial statements and financial transactions of users of the state budget and the budget of local units in accordance with its plan.

In addition, the Ministry of Science and Education, as well as counties, the City of Zagreb, county seat cities with more than 50 employees and cities with more than 35,000 inhabitants, must establish an independent internal audit unit.

Higher education

The public funding of higher education institutions is regulated by the Act on Higher Education and Scientific Activity, stipulating that the activity of higher education institutions is funded by the founder’s resources, assigned revenue and own resources.

The founder’s resources include:

1. funds from the State Budget of the Republic of Croatia for financing the activity of a higher education institution whose founder is the Republic of Croatia (public higher education institution)
2. funds from the budget of LGUs for financing the activity of higher education institutions founded by LGUs prior to entry into force of this Act
3. founder's resources for financing the activity of a private higher education institution.

Public higher education institutions are financed by the funds from the State Budget of the Republic of Croatia through funding agreements. Funds from the State Budget of the Republic of Croatia are allocated to a public higher education institution based on the funding agreement for financing the basic component of the budget, the development component of the budget and the performance component of the budget.

The basic component of the budget of a public higher education institution includes funds from the State Budget of the Republic of Croatia used for financing the basic needs of the public higher education institution that are related to performing its activity as laid down in the Act on Higher Education and Scientific Activity, comprising the following:

1. employees' salaries and material rights
2. operating material costs
3. funds for regular and upgrading maintenance of education, scientific and art infrastructure
4. expenditure for performing the scientific, artistic and professional activity
5. funds for scientific and professional training and development
6. expenditure for student standard
7. expenditure for the publishing activity
8. funds for other flat costs.

The amount of the basic component of the budget of a public higher education institution is determined on the basis of historical data on the number of employed teachers, researchers and associates, the proposal for development of the public higher education institution as well as the expenses arising from performing the regular activity that are covered from the State Budget of the Republic of Croatia.

Adult education

In CVET, adult learners usually cover the expenses of the education programmes they attend. The exception are primary education programmes, which are free of charge for adults and financed by the Ministry of Science and Education.

The public employment service, as a part of Active Labour Market Policy (ALMP), covers for the education expenses of the unemployed, and some adult education programmes have recently been financed through different ESF-funded projects.

Biggest change is a newly established voucher system that was foreseen in Croatia’s National Recovery and Resilience Plan 2021-2026, and it aims to support lifelong learning and the acquisition of new skills, in particular green and digital skills. This is a model of financing lifelong learning for employed and unemployed persons with the aim of acquiring skills needed for the labour market. Voucher is a financial instrument for the allocation of public funds for adult learning and its value is 39 million EUR. The voucher system has 4 goals:

• increase the share of adult in lifelong learning
• increase the competences of employees
• ensure a high-quality workforce
• support transition from unemployment to employment.

Target value concerning the voucher system is that by the end of the 2^nd quarter 2026, a total of 30,000 vouchers have been used, of which at least 12,000 by long-term unemployed, inactive, or young people in NEET (Not in Education, Employment, or Training) status.

Implementation measures (active labour market measures) within the competence of the Croatian Employment Service, include subsidies for employment, self-employment support, support for training, financing the education of unemployed persons, employment in public works and other measures.