The Doctoral Thesis presents higher education financial management system, which has been developed by the author of the paper. The Doctoral Thesis analyzes the goals of higher education financing, the factors that influence it and problems of funding mechanism development. A methodological scheme for research and elaboration of the financing system for higher education has been developed. The Doctoral Thesis evaluates experience of higher education financing in European and other developed counties. Common tendencies concerning the sources of financing, study support systems, funding of research and innovations, as well as funding policy on the level of higher education institutions have been defined. The Doctoral Thesis characterizes the higher education financing system in Latvia, including regulations on funding allocation, student and study credits, procedure of granting scholarships and domestic financial policy of higher education institutions. Evaluation of a range of financial management system components: study level and thematic field indexes, the normative principle of funding, performance efficiency indicators, etc. The proposals for the development of higher education financing model have been elaborated. The Doctoral Thesis defines general principles of allocation and use of financial resources, presents the elaborated methodological scheme for allocation and use of financial resources, the algorithm for methodology of state budget funding and tuition fee funding allocation, calculation formulas, information base of methodology implementation and structural unit income allocation methodology. The results of implementation of methodology for allocation and use of financial resources at Riga Technical University are characterized. The Doctoral Thesis consists of four parts. The volume of the Doctoral Thesis is 170 pages, not including the appendixes. The paper contains 8 tables, 8 pictures and 92 formulas, as well as 11 appendixes that explain and illustrate the content of the research. During the elaboration of the paper 162 information sources listed in the bibliography have been used.