Financial management system

A financial management and control system (FMC, known in Serbia as FUK) is a legal requirement for every public sector entity in Serbia, from ministries and municipalities to schools, health centers, and public enterprises. It is the set of policies, procedures, and control activities that gives management reasonable assurance that public funds are used lawfully, economically, and efficiently. NOTA GROUP in Belgrade helps organizations turn FMC from a binder opened once a year into a system that actually works: we design it around your organization, implement it together with your staff, and support you through the annual reporting cycle.

What FMC covers and who is obliged

The obligation to establish a financial management and control system is set out in the Serbian Budget System Law and detailed in the rulebook and methodology of the Central Harmonization Unit of the Ministry of Finance. The system rests on five components: control environment, risk management, control activities, information and communication, and monitoring. It applies to direct and indirect budget beneficiaries, mandatory social insurance organizations, public enterprises, and other users of public funds.

In practice, the organization needs documented business processes and a process map, a risk register, written procedures for key activities such as planning, procurement, payments, and asset management, a designated manager responsible for FMC, and a mechanism for reporting and handling irregularities. All of this feeds into the annual FMC report submitted to the Central Harmonization Unit.

How implementation works, step by step

We start with a diagnostic review. We examine existing documentation, the organizational structure, internal acts, and the way work is actually done, then identify the gaps against the methodology.

Next we map and describe the business processes. Together with unit managers we go through each process, define owners, inputs, outputs, and control points, and write a process map and procedures that reflect real work rather than a theoretical model.

We then perform the risk assessment: identifying risks by process, scoring likelihood and impact, defining controls, and recording everything in the risk register. From this we draft the risk management strategy and an action plan with deadlines and responsible persons.

In parallel we set up the irregularity management system: a reporting channel, a register, a verification and escalation procedure, and a way of informing management. Finally, we train employees and managers, because the system only lives if people understand and apply it.

What you receive and which obligations we cover

You receive a complete FMC documentation set: the decision establishing the system and appointing the responsible manager, the process map and descriptions, written procedures, the risk register with the risk management strategy, irregularity procedures, and a training plan. We support you in completing the annual self-assessment questionnaire and preparing the annual FMC report, which is submitted to the Central Harmonization Unit by March 31 of the current year for the previous year.

For organizations that already have a system, we offer a review and update of the documentation, because processes, regulations, and risks change, and outdated documentation is the most frequent finding of internal audit and the State Audit Institution.

Why NOTA GROUP

We come from accounting and tax, so we see FMC not as an administrative exercise but as a system that protects the organization's finances. We work with your people, not instead of them: the documentation we leave behind is understandable and usable. We communicate in Serbian, English, and Russian, exchange documents digitally, and remain available for questions all year, not only in March. For related accounting and tax matters, see our accounting services and tax consulting.

Frequently asked questions

How long does FMC implementation take?

It depends on the size of the organization and the number of processes. For smaller institutions a basic system can be established within a few months, while more complex organizations with several units require a longer, phased approach.

Is FMC mandatory for small institutions such as schools and kindergartens?

Yes, the obligation applies to all users of public funds regardless of size. The difference lies in the volume of documentation, which is scaled to the complexity of the organization.

We already have documentation. Do we have to start from scratch?

No. We review the existing documentation, keep what is sound, and update what no longer matches your real processes or the current methodology.

What happens if an organization has no FMC system?

The head of the organization is responsible for establishing it, and a missing system is a standard audit finding. The best time to start is now. Contact us and we will schedule a diagnostic review.