Financial statements of budgetary entities, as well as their accounting system, are fully normatively unified and determined. Their basic purpose is to present the financial position and financial result of the business in the reporting period. In the theoretical part of the paper, the results of research into the theoretical and legal framework of financial reporting in the budget system are presented. In the applied part, the results of research into the financial reports of specific users of the state budget are presented. It was carried out at the Ministry of the Interior for the period from 2017 to 2023, during which a stable growth of assets, income and expenses was revealed. The analysis indicates continuous asset growth, the need for increased financial resources to meet obligations, and enhanced financial support from various sources. Vertical analysis shows relative stability in the structure of assets, revenues, and expenditures of the Ministry, with certain fluctuations. Although the analysis reveals some deficiencies and obstacles, it also highlights the potential for improvement through the implementation of strategies aimed at optimizing reporting processes, strengthening internal controls, and increasing transparency. Through a better understanding of financial statements and their shortcomings, the analyzed entity can strengthen its financial management and build trust among the public and stakeholders. The key conclusion of the research emphasizes the importance of continuous monitoring and improvement of financial reporting processes to ensure consistent transparency, efficiency, and accountability in the use of public resources.