This chapter presents a broad and analytical overview of the functioning of the public financial management system in Kosovo. The chapter examines the budget process in all its stages—from planning and approval to execution and financial reporting—emphasizing the interaction between the relevant institutions and the key legal and regulatory frameworks that support these processes. It further elaborates on the territorial and organizational structure of the public sector, including central and local government institutions, as well as the methods of financing and allocation of public resources. The chapter also addresses accounting and financial reporting practices, external and internal auditing, and the role of oversight mechanisms in enhancing accountability and transparency. The chapter concludes by identifying the main challenges Kosovo faces in aligning its public sector accounting system with IPSAS, improving fiscal transparency, and strengthening institutional capacities for a gradual transition towards accrual-based accounting.