The topic of this thesis is "Cost management in the public sector", where the very concept of costs will be explained in more detail, as well as the divisions that accompany them, which enable easier monitoring of business activities, control of company costs with the aim of higher quality and more efficient operations. In the continuation of the work, cost calculation methods will be listed, which are of great importance when talking about increasing the profitability of all types of companies. Then, cost management in the public sector is mentioned. While researching the mentioned topic, there was an interest in highlighting the importance of cost management in all types of companies, with an emphasis on large companies. In Croatia, state accounting is defined by the Budget Act. For sustainability, the public administration should reduce costs in order to influence the strengthening of the quality of services. It is extremely important to plan expenses because they are one of the most important parts of the budget.