Education is a part of unclear public needs, which results in the existence of public but also private educational institutions. The problem of research in this paper is to what extent existing decentralized funding is sufficient to ensure the quality of vocational education. The subject of the research is the effectiveness of public funding of vocational education in decentralization conditions in the Republic of Croatia. We will observe through the improvement of the quality of vocational education and insufficient matching of vocational education with the needs of the labor market. The paper presents the relations of the Republic of Croatia with the countries of the world, in which the relationship of decentralization and financing is also expressed. The paper also attempted to point out the problems related to vocational education, their inadequate labor market compatibility, and ultimately attempted to put forward proposals for their resolution or at least the mitigation of these problems. As for the hypothesis, three hypotheses are presented in the paper. The H1 decentralization process has created major differences in the sources of financing local self-government units. Due to decentralization, the financing of vocational education in the Republic of Croatia, the question of its availability and the cost of education vary in certain parts of the country. As a financing priority it is necessary to equalize the material and infrastructure equipment of the school. H2 - the existing way of financing vocational education does not result in the quality of the education process. In other words, the quality of the education process is not realized in the Republic of Croatia because of the existing way of financing vocational education. In the mentioned domain of education, it is necessary to provide additional funding through which attendees will be able to acquire professional competences with modern information technology and scientific knowledge and achievements as well as training in the labor market so that they can successfully respond to the demands of the market economy. H3- there is insufficient matching of vocational education with the needs of the labor market. Namely, in some countries, individuals are starting to work much earlier than the case in the Republic of Croatia. Education is gradually abandoned as determined by the national system of education and training. So paid practical education is considered employment. All hypotheses are accepted and proven through work.