The financial reporting of budget and budgetary users are an integral part of all stages of the budgetary process: budget preparation, budget acquisition, budget implementation and finally the creation of annual budget statement. The allotted usage of appropriations is controlled by tracking the realisation of budget through financial reports, while simultaneously building the foundations for future all-level budget planning. The aim of this work is to present the scope and prove efficacy of financial reports of a budgetary user through the example of a local and municipal government budgetary user – the City of Zagreb. The introductory part is followed by the section in which the ambiguity of the term budget is introduced through interrelation of its constituents in the Republic of Croatia and the description of budget as a document on estimated revenue and expenditure. In the third section an accounting budget system is shown, as well as its basic ideas of statements and record keeping of business events and economic positions. The fourth section deals with the financial reports in budgetary system through the explanation of fundamental financial reports and the necessity of internal reports. The fifth part shows the specific qualities of JLP(R)S budgetary user reporting, which is exemplified by financial reports of the Zagreb Youth Theater for the interval from January 1st to December 31st 2016. In the final section a conclusion has been drawn based upon the collected data, accompanied by a comment on expected trends in financial reporting in near future.