General Law that regulates allocation of funds in Culture is “Law on Culture” (2009). It is specified that for the programmes and project in culture, Ministry of Culture must use open competitions for allocation of funds that are allocated for the financing of the particular areas of culture, cultural heritage and media. Public calls are opened every year for the specific areas, and public, as well as private institutions which can propose their project if they are in line with requests of these calls. This law also regulates the status of Major Cultural Institutions, whose founder is Republic of Serbia. These institutions are funded on the basis of their expenses and proposed projects that they plan to implement during the year. Besides running expenses, and proposed projects, Ministry of Culture is also responsible for the financing of the capital (infrastructure) projects in these Institutions.
Minister of Culture has the discretion right to allocate by himself up to 20% of a yearly budget of the Ministry of Culture, intended for the projects of highest importance for the culture of Republic of Serbia. This right is constantly criticised in the cultural sector, but it is still operational.
The so-called “Omnibus Law” (2002), issuing the activities and institutions in the territory of Vojvodina which will be financed by the Ministry of Culture and the Secretary for Culture in the autonomous province of Vojvodina. There are also regulations on important institutions and organisations for culture in Belgrade, as well as in the autonomous province of Vojvodina, which regulates a system of financing culture on the city and province level.
Public institutions founded by all state authority levels, usually receive the financing for the operating expenses / overheads (expenses of the building, electricity, phone, salaries of the employees…), but for the costs of the programmes they have to submit the applications every year to their founder for approval, and to also do the additional fundraising.
Every public institution is obliged to follow the public tendering procedures for all the public spending that exceed the sum of approximately 30 000 EUR. There has been many voices against this Law and its implementation in the field of culture since it does not recognize the specificities of the field (hiring an artist or a music band is not the same as building a house and selecting the most adequate construction company). Despite the action of National Council for Culture and support of the Ministry of Culture, Ministry of Finance and Government have not addressed this issue so far.
Ever since 2012, transparency of public finances and corruption was announced as an important task for the government. In the field of financing culture, the Ministry of Culture and Information introduced a new regulation concerning financing cultural projects and monitoring the financial aspect during its implementation in 2012. The new regulation introduces a strict policy to facilitate external financial control and procedures relating to operational and financial controls of cultural projects financing by the Ministry of Culture and Information. Ministry of Culture is working hard with Ministry of Finance, on implementing new procedures for financial control and management through the EU funded project (PIFC). It was expected that the new procedures will enable more efficient control over public spending in the culture, and they will create a more disciplined financial environment in this sector. Besides the formal regulation, however, there is no effective control and evaluation of funding project. Those issues have been mentioned several times in the Ministry of Culture’s state audit reports.