The budget of the Ministry of Education which is part of the Budget of Montenegro and is adopted by the Parliament of Montenegro on an annual basis, determines the amount of funds for the education sector.

Starting from the fiscal year 2005, the Ministry has applied a Programme Budget that consists of 10 programmes.

In accordance with the General Law on Education, education is funded from:

• public revenues (budget of Montenegro and municipality)
• founders’ resources
• tuition fees at private institutions
• fees paid by parents
• property income (lease)
• funds from selling services and products
• donations, sponsorships and legacies
• other sources.

A public institution cannot be funded by political parties.

An institution which is funded from public revenues cannot request form students or learners co-payment for covering the costs of education (teaching and extracurricular activities). In post-secondary vocational education, it is possible to define the amount of co-payment for the costs of practical education amounting to maximum 20% of per student cost for the same programme conducted at a public institution.

A public institution, which is part of the network of institutions, can obtain funds from the budget of Montenegro for:

1. gross salaries and other personal earnings of employees;
2. ongoing investment maintenance;
3. investing in institutions;
4. material costs and expenditures for electrical energy;
5. continuing professional development of teachers;
6. supplementary primary education of citizens of Montenegro temporarily working abroad;
7. basic education for adults;
8. external evaluation of student knowledge which is prescribed by law (testing students’ knowledge at the end of the third cycle, exit exam and other exams);
9. scholarships for talented students;
10. scholarships for scarce qualifications;
11. student competitions;
12. experimental teaching;
13. accommodation and meals for pupils staying at dormitories or at institutes for children with special needs;
14. subsidising textbooks with small circulation and textbooks necessary for education of national, or ethnic groups;
15. cost of meals for children at preschool institutions whose parents are social welfare beneficiaries in accordance with special regulations;
16. costs of staying and meals of a single parent’s child, or solely costs of staying, at a preschool institution in the amount of 50% of the price for stay and meals in accordance with a special regulation;
17. costs of medical, i.e. sanitary and hygienic examination of teachers, or employees in accordance with law and a special regulation;
18. training and development of principals, and for the work of expert councils;
19. developmental, advisory and research work in education;
20. development of information system;
21. subsidising the resolution of housing issues of the institution’s employees;
22. other obligations determined by law;
23. partial allowance for student transport.

Besides this, the Government allocates special funds for education system through the Capital Budget. A significant amount of funds within the capital budget is allocated for the improvement of school infrastructure.

Preschool institutions, primary schools, gymnasiums and vocational schools as well as institutions for education of children with special educational needs - resource centres, adult education institutions, pupils’ or pupil and students’ dorms and education centres, acquire funds from the budget of Montenegro for one school year based on the per-student cost price for a particular educational programme, the number of pupils i.e. children, the coefficient of the programme group in which the educational programme has been classified, and other criteria typical for the educational programme, institution and the specific field. The Rulebook on norms and standards for obtaining funds from public revenues by institutions implementing publicly-valid educational programmes prescribes standards and criteria for forming classes and groups, organising advisory services, library, administrative, accounting and technical services and the evaluation of material costs.

For funding the needs of ongoing investment maintenance, investments at institutions and material costs and expenditures for electrical energy at public institutions from the network of institutions founded by municipalities, funds are provided from the municipal budget.

For funding public institutions that are not part of the network of institutions, and the founder is the municipality, funds are provided from the municipal budget.

An institution may acquire funds from the municipal budget for:

1. material costs (hygiene maintenance, pest control and disinfection, telephone and postal services, internet);
2. investments at institutions founded by municipalities;
3. insurance of facilities of the institution;
4. compulsory medical and sanitary examination of teachers and children, i.e. pupils;
5. transportation of primary school pupils;
6. fire protection;
7. tax and other charges prescribed by the local government;
8. use of utility services and utilities;
9. land tax and communal fee on business signs.

The level of salaries of persons employed in education sector is regulated by the Branch Collective Agreement for the field of education. This Agreement regulates certain rights and obligations of employees of public institutions in the field of preschool education, primary education, secondary general education (gymnasium), vocational education and education of children with special needs, as well as rights and obligations of employers towards employees and mutual rights and obligations of the contracting parties. On 31st December 2022, the Branch Collective Agreement on Amendments to the Branch Collective Agreement for Education was adopted, which applies from 1st January 2023. This legal act was concluded as a result of the social dialogue between the Government of Montenegro and the representative trade union of Montenegrin education, and it was amended and supplemented in the part of changes to the coefficients of complexity, i.e. the increase in the salary of employees in education.

Higher education funding in Montenegro is regulated by the Law on Higher Education.

In accordance with the Law, an institution can be funded from:

• founder’s resources;
• tuition fees and other fees paid by the students;
• intellectual and other services;
• donations, gifts and legacies;
• property income (lease);
• projects and contracts with international, national and private entities aimed at promotion of teaching, research and consulting activities; and
• other sources in compliance with law.

Mutual rights and obligations between a public institution and the Government for the implementation of study programmes of the first and second cycle are regulated by a funding contract. The contract is concluded for at least one fiscal year. The contract contains objectives, activities and measures for achieving these objectives, indicators for monitoring the contract implementation, the dynamics of delivery of reports on contract implementation and other issues relevant for funding. The content of the contract is determined by the Ministry of Education and published on its website.

Also, on 15 February 2023, a new Branch collective agreement for the area of administration and justice was adopted, concluded between the representative Union of Administration and Justice of Montenegro and the Government of Montenegro, which more closely regulates the rights and obligations from the employment relationship, the rights and obligations of the employer towards employee, mutual rights and obligations of the contracting parties. This legal act increased the wages of certain categories of employees in the public sector.

Salaries of employees at the University of Montenegro, which is a public higher education institution, are regulated by the Collective Agreement for the University, which is concluded by the University Syndicate, the Rector of the University and the Government of Montenegro. In January 2023, the Collective Agreement on the amendment of the Collective Agreement for the University of Montenegro was concluded as a result of the social dialogue between the University of Montenegro, the Trade Union of the University of Montenegro and the Board of Directors of the University of Montenegro. The collective agreement has been amended in the part of changes to the coefficients of complexity, i.e. the increase in the salary of employees with the aim of increasing the salary of employees of teaching and non-academic staff at the University by 20% from January 2023; from 1 January 2024 for an additional 10% and from 1 January 2025 for an additional 10%, as well as that in case of changed macroeconomic parameters during 2023 and 2024, the complexity coefficients can be additionally considered.