The Governor is required to submit budget recommendations to the Legislature no later than December 1 of the prior year preceding odd-numbered year sessions of the Legislature. The Constitution requires the budget be in balance at the end of each biennium. Each agency is responsible to develop its budget proposal for the Governor's approval and to comply with the final budget adopted by the Legislature.
Budgetary compliance is the paramount consideration in government.
The basis on which the budget is prepared should be consistent with the basis of accounting. When the budget is prepared on a basis not consistent with generally accepted accounting principles, financial management and financial reporting require additional work. Formal budgetary account integration is a management control technique employed to assist in controlling expenditures and encumbrances and in enforcing revenue provisions. Budgetary accounting techniques are an important control aspect of accounting for governmental and proprietary funds, since the biennial operating budget is the legal compliance standard against which the operations of such funds are evaluated. The biennial budget approved by the Legislature and budget actions approved by the Emergency Board must be formally recorded in the accounting records of each agency.