The task of public management is to manage business entities in the public sector. The peculiarity of the public sector, and thus the work of public managers, is manifested in the fact that the means of work are public and primarily financed by public revenues, whereas the desired outcome of their management are intangible outputs and outcomes whose achievement can be difficult to measure. Relevant information is necessary for successful management, including those from financial statements prepared in accordance with the appropriate accounting standards and regulations. These general purpose financial statements provide information used by management to analyse the results of operations in prior periods. The principle division of all business entities, depending on the basic objectives of the operation, comprises those which operate for profit and those which operate on non-profit basis. This division is also applicable in the public sector. The objectives of operations and activities also determine the aims, content and purpose of financial statements on their business results and financial position. Consequently, the accounting systems that generate financial information are different, and the information itself requires different interpretations. Consolidated financial statements represent the most significant reports required for overall management. These reports consolidate the financial statements of all entities which make up a single financial and economic group that is connected in its operations by various formal and legal links. Since this unique group often consists of entities that record their business transactions in different accounting frameworks (entrepreneurial, non-profit and budgetary) and accordingly present, substantively and formally, different information in their financial statements, there is a need for methodological harmonization of accounting preparation of information for the preparation of the consolidated financial statements of the group. Direct reclassification of financial statements of individual group members is not possible because it is a synthesized information and therefore it is necessary to reduce identical business transactions to a "common accounting denominator", which are the accounting rules of the leading member of the consolidation group. The aim of this paper is to investigate and propose the procedure and model of consolidation of financial statements when the consolidation of financial statements of the public sector group includes members who keep their accounts in accounting frameworks which are different from the accounting framework of the leading group member. The research determined the model of the unique methodological basis which ensures the comparability of accounting information prepared in three different accounting systems. This provides a fundamental methodological premise for the consolidation of financial statements. The result was achieved by a combination of various scientific methods, among which the case study method dominates. Other methods used include inductive and deductive methods, methods of analysis and synthesis, methods of abstraction and concretization, iv methods of generalization and specialization, methods of proof and refutation, comparative method, classification method, statistical and mathematical method. The application of the research results ensured the reliability of the information provided by the consolidated financial statements. Thus, these reports become a reliable means of action of public management, but also provide the fulfilment of the state's obligation to international external users of information on the operations of the general government. The model was tested on the presented example of a series of hypothetical business transactions through three reporting periods recorded in different accounting frameworks of group members and translated according to the budget accounting rules applied by the leading member of the consolidation group. After the testing procedure, the nominal values in all positions of the financial report on business performance and financial position are equal to those stated in the same financial statements based on the application of budget accounting. Based on the verified and confirmed information, a model of consolidation of financial statements has been compiled when the leading entity is in the group of entities whose financial statements are consolidated by the rules of the budget accounting framework, and subordinate entities are economic entities and privately funded non-profit entities.. Such a model determines the model for reducing different accounting frameworks to a single budget framework. Accordingly, in the Croatian national accounting system, guided by the model given in this paper, it is possible to provide a unique methodological basis as one of the basic prerequisites for the implementation of the process of consolidation of financial statements in the public sector. Consolidated financial statements provide an additional information management tool for public management, as well as the possibility of meeting the international information obligations of public managers on the national level. Thus, in addition to the scientific contribution, the design of this model provides a significant practical contribution to the operational implementation of the consolidation of financial statements of general and local government. Although the usability of consolidated financial statements is important for assessing the overall position of each of the consolidation groups and their importance is growing, they also have limitations that should be taken into account.