The subject of this master's thesis is related to the budget of the City of Otočac, the results of the theoretical and legal basis of the budget system, which are supported by the applicable part of the budget analysis. Budget, as one of the most important public financial documents, estimates the revenues and receipts and expenditures and expenses. This includes budget elements as well as related programs and projections of budget parts such as: development programs, city projects, and budget projections. The aim of this paper is to theoretically explain the financing and management of the state budget, the units of local and regional selfgovernment and the practical use of budget funds of the City of Otočac. The quality of the planned, adopted and implemented budget affects the lives of all people and the functioning of the entire community. The budget is based on pre-approved revenues intended to finance expenditures that meet the needs of a particular area that is within the competence of a specific unit of local and regional self-government. By linking the general and specific part of the budget with projections for the next two years and development programs, the budget of the City of Otočac has been comprehensively covered. Budgetary accounting is explained in more detail and the elements of which the budget accounting comprises, i.e. the basis on which they are implemented, and the principles of budget accounting, are presented. Budget classifications are used as a means by which the revenues and receipts are calculated and monitored, i.e. expenditures and expenses per holder, goals, purpose, type, location and sources of funding. Budget transparency shows how many necessary and publicly available documents the web pages of the City of Otočac contain.