STATE FINANCIAL REPORTING - 7241
The State Controller’s Office (SCO) issues two annual financial reports for the State of California:
Budgetary-Legal Basis Annual Report
The Budgetary-Legal Basis Annual Report (BLBAR) is prepared on the same basis as the applicable Governor’s Budget and Budget Act.
Government Code section 12460 requires the Controller to submit the Budgetary-Legal Basis Annual Report to the Governor. The BLBAR accounts for prior year adjustments, fund balances, encumbrances, deferred payroll, revenues, expenditures, and other components on the same basis as the applicable Governor’s Budget and the applicable Budget Act, as determined by the Director of Finance in consultation with the Controller.
Government Code section 13344 requires state agencies/departments to prepare and maintain financial and accounting data for inclusion in the Governor’s Budget, Budget Act and related documents, and the BLBAR described in Government Code section 12460, according to the methods and bases provided in regulations, Budget Letters, and other directives of the Department of Finance (Finance). Agencies/Departments must ensure that information provided to Finance for the Governor’s Budget is consistent with information provided to the SCO for the BLBAR.
SAM Section 6400 requires agencies/departments to ensure that budget information reconciles with the year-end financial reports. Agency/Department heads must certify that past/prior year information provided to Finance is accurate, reconciles between budget and accounting information, and that accounting records and information are consistent with information provided to the SCO.
Annual Comprehensive Financial Report
The Annual Comprehensive Financial Report (ACFR) is a detailed presentation of the state's financial condition. The ACFR reports on the state's financial activities and balances for each fiscal year.
Government Code section 12460 requires the Controller to prepare the ACFR in accordance with Generally Accepted Accounting Principles. The Governmental Accounting Standard Board requires that every governmental entity prepares and publishes an ACFR. The financial section of the ACFR should consist of management’s discussion and analysis, the basic financial statements including notes, required supplementary information, combining and individual fund statements, schedules, narrative explanations, and statistical tables. The ACFR should contain the report of an independent auditor if an audit has been performed.