Each government engages in a full budget cycle involving the preparation of own budgets and supportive documents. In Bahrain, important administrative changes and major reforms have been implemented aimed at improving the overall efficiency, effectiveness, transparency, performance, accountability and sound budget management. This has been through State Budget Law No. 39 for the year 2002 which applies to all ministries and government organisations. The main purpose of this study is to identify, describe and analyse budgetary accounting practices and reporting requirements across Bahraini governmental units. The paper also contains a short description of the internal control reforms in Bahraini government departments. Questionnaire survey, structured and unstructured interviews and archival documents were used to collect the data. The results of the study indicate that budgetary accounting is the most important component of the accounting system in the government. Fund accounting is not used and the basis of accounting used is the modified cash basis. In preparing the budget, the line-item approach is used and questionnaire respondents are dissatisfied with this approach to budgeting. However, State Budget Law recommends that the necessary steps be taken to gradually implement performance and program budgeting beside line-item budgets. Moreover, encumbrances, budgetary revisions, and emergency budgets are used. In financial reporting, the statement “consolidated fund” maintains fiscal transparency. All revenues and expenditures get routed through the consolidated fund and controlled by the budget and no separate fund is permissible to credit receipts. Based on the findings, some recommendations for development and improvement are highlighted. In this regard, comprehensive implementation of performance and program budgeting is worthwhile for effective control on government expenditure, efficiency and accountability. Further, it is recommended that the accrual basis is introduced when preparing the government-wide budget.