|To universities and research institutions, budgeting and management based on the full-cost methodology comes primarily as a result of external change. The general principles of Article 107 of the Treaty on the functioning of the European Union imply necessity of a clear distinc-tion between publicly funded activities, without any direct impact on the functioning of the market, and economic activities performed at the market price or the actual cost increased by a reasonable margin of profit. Direct costs (salaries, travel, supplies, and equipment deprecia-tion) and indirect costs (depreciation of buildings and infrastructure, information infrastruc-ture costs, maintenance and general services, the cost of central economic unit, legal services, etc.) identification is essential for the development of public project funding based on actual needs together with adequate institutional functioning. Across the EU, insisting on utilizing full-cost financing for project financing, not just flat-rate surcharge as a percentage of direct costs, can be seen as a necessary condition for equal treatment of all public support receivers. Utilizing full cost in university budgeting can be even more profoundly understood as an in-dispensable tool enabling to exercise economic autonomy as well as to implement economic strategy and/or to combine the fundamental academic mission of a university rooted in activi-ties outside the market mechanisms with the needs of long-term economic stability. Based on the particular case of Masaryk University budgeting and structural change of its economic functioning, it is possible to show that the method of semi-socialist budgeting utilized in the nineties had lead, in combination with the transformation of the University into a public insti-tution and strengthening of autonomous decision making, to anomalies later addressed by the model introduced in late 90’s. This model can be shown to suffer with a similar increase of disparities, this time in connection with the diversification of funding resources and utilization of project financing. Full-cost model becomes a necessary internal imperative of the universi-ty notwithstanding any external directives also pointing towards it. The internal necessity of using full costs follows from the need for conceptual development of the University, the drive for improvement of its competitiveness as well as of its transparency of economic functioning viewed as a prerequisite for reducing internal tensions within the diversely structured Univer-sity. From this viewpoint, full cost is clearly compatible with employing University leadership stressing primarily the academic – not just managerial – needs.