The Annual Accounts of the State Government are prepared and examined under the directions of the Comptroller and Auditor General of India (C&AG) in accordance with the requirements of Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act 1971 for being laid before the Legislature of the State. The Annual Accounts consist of (a) Finance Accounts and (b) Appropriation Accounts. Finance Accounts are summary statements of accounts under the Consolidated Fund, Contingency Fund and the Public Account. The Appropriation Accounts record the Grant-wise expenditures against provisions approved by State Legislature and offer explanations for variations between the actual expenditure and the funds provided. The Principal Accountant General (Accounts and Entitlements) prepares the State Finance Accounts and the Appropriation Accounts.

The monthly accounts of the State Government are compiled and consolidated from the accounts on the basis of vouchers and schedules received from various treasuries, Government Commercial Undertakings, Public Works Divisions and Forest Divisions of the State and compiled accounts received from Departmental Officers vestedwith cheque drawing powers. 

Other functions include:

• Furnishing material for Central Finance Accounts to the Controller General of Accounts;
• Preparation of Accounts at a Glance;
• Preparation of Reports on the expenditure of the Government of Karnataka to end of each month giving grantwise/sub-headwise details of provisions, balance available and percentage of progressive expenditure and submission of the same to the State Government
• Authorisation of Payment to Religious and Charitable Institutions;
• Maintenance of accounts of Internal Debt, Loans and Advances from the Government of India;
• Maintenance of Deposit Accounts and Settlement of Inter-Government transactions;