It this paper is described: fiscal liability and borrowing of local and regional authority, borrowing instruments, possibilities and limitations on borrowing of local units and assurances that are necessary from the central state. Also, the public debt of the Croatian Republic is described, as well as managing strategies of the public debt and analyzing of the indebtedness of European Union members and the indebtedness of the city of Vinkovci. The statement of fiscal liability, which is based on Fiscal Responsibility Questionnaire, is made by the Head of budget and extra-budgetary users of the state and local or regional authority's budgets. The fiscal liability law is in effect since the 2011. Fiscal Responsibility Questionnaire contains questions about planning, executing, public procurement, accounting and informing based on the legislative framework. Local units provide their additional resources for the financing of capital projects from the mortgaging in financial markets of economically developed countries. They can be mortgaged by credits, local (municipal) securities or by borrowing because of refinancing the local unit's debt. Namely, total annual commitment can go only up to 20% of realized incomes of the year that foregoes the year of borrowing. The other part of the graduate thesis is directed to analysis of the budget on state or local level, precisely the city of Vinkovci, in the period from 2011. to 2016. State budget is the file which estimates incomes and receipts as well as outcomes and expenditures for the year and is in accordance with the law. By analyzing the budget, surplus or shortage are determined. Namely, if the incomes are higher than the outcomes, there is a budget surplus. On the other hand, if the outcome is higher than the income, then there is a budget shortage. When there is a budget shortage, borrowing or reducing the costs are planned.