Economic methods and decentralisation are the most effective means in managing any process. Any funds of tertiary educational institutions, both earned by the institution and allocated as state budget subsidies, should be handed over directly without intermediaries to the parties who performed the work. Funds should be allocated according to the unified methodology, and the workload to be accomplished in a definite period of time is the main criterion. Workload to be accomplished is measured according to strictly defined and measurable parameters. In actual practice, there is a tendency to add work quality as an additional criterion. It is problematic to apply the quality criterion because, firstly, the quality of any work performed by professionals cannot be below certain standards; secondly, there are no measurable, definite parameters for quality assessment if work outcome is a service. Education is a commodity, specific commodity actualised as a service. The authors offer the algorithm of calculation methodology of fund allocation that is described considering the experience of Riga Technical University, where this methodology has been implemented.