Financial statements are an important part of every entity's business because they provide internal and external users (including budget users) with important information about the entity's business and performance. Every user of financial statements demands their excellent quality in order to be able to make rational decisions based on them. A key role in this is played by notes that contribute to the understanding and thus the quality of financial statements in budget accounting. According to the Ordinance, accounting policies should be published with the Notes to the financial statements, but during the research, there was no public disclosure found. Therefore, it is not possible to draw a clear conclusion as to their compliance with IPSAS 3. The research on the quality of notes was conducted on the example of the City of Poreč and Istria County in the Republic of Croatia with the aim of determing the quality of compiling notes in that sector (through detailed comparative analysis), and pointing out their importance as an integral part of financial statements. The conclusion of the research is that the notes on the example of the City of Poreč and Istria County for 2020 are generally very well evaluated, that they comply with the Ordinance and the Circular on the preparation, consolidation and submission of financial statements. Also, at the end of the research, it was concluded that the city of Poreč and the County of Istria follow the guidelines of the Ordinance, and thus are somewhat in line with IPSASs.