This report analyzes how budgets of public schools have been formed and why there is constant deficit and inability to cover all expenses of schools. We conducted thorough research of budget and non-budget sources of funding and legal and illegal ways of funding allocations. We have taken examples of concrete schools in Bishkek and tried to show how the school budget receives allocations from republican and regional budgets. There is always discontent among parents about constant demand from school administrations to make financial contribution to schools. Thus it is important to understand how school budgets have been funded and why there is a problem.