Fiscal Year End Close Process Overview Seminar

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Fiscal Year End CloseProcess Overview Seminar

• August 15, Tuesday (937-302)
• August 18, Friday (Perseverance Hall)

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Mentors/Instructors

• Lesta Nadel
• Vertis Ellis
• Jeremy Coyne
• John Speros
• Barbara Gomez/Jill Stark
• Mary Clary

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Agenda

• The big picture
• Information sources
• The close schedule
• Direct programs, WFO Indirect Budgets
• Purchasing deadlines
• Accruals, prepaids travel
• Resource adjustment policy
• QA and Discussion

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The Big Picture and Information Sources

• Lesta Nadel
• CFO Field Operations, EHS, Facilities

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Year End Close Why do it?

• By act of Congress, all Federal agencies must
  close their books on September 30
• LBNL is an integrated contractor this means
  that our financial results are rolled up with
  DOEs
• All income and expense accounts must be closed
  out to the balance sheet and accounts reconciled
• All indirect costs must be fully distributed to
  directly funded projects (ie, zero indirect
  budget variance overall)

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How Different from Monthly Closes

• September 30 is a defined end point equivalent
  to calendar year for personal income tax or
  selected fiscal year for businesses
• It is a summing up and accounting of all current
  fiscal year economic activity
• This means that some last minute costs for which
  invoices have not been processed will need to be
  accrued
• Current year cash payments for invoices for goods
  or services not received by 9/30 or for travel
  occurring after 9/30 should not be reflected in
  the current fiscal year expenses (pre-paid
  expenses)
• Suspense items (costs which have dropped out from
  closed projectids) must be resolved

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Year End Close Challenges

• Timely review of cost activity and pressing
  deadlines for corrections
• Tracking status of POs- particularly cross check
  of items ordered, shipped, received and posted to
  the ledger
• Accelerated close
• Reconciliation with other DOE sites where
  applicable

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Information Sources

• ISS Close Status (recording) 486-4684 or
  HUN-GOTH
• Twice daily close status emails to Network
  distribution
• Web Site http//www.lbl.gov/Workplace/CFO/FY06_Cl
  ose/index.html
• Will include the schedule, forms, contacts,
  guidelines, and procedure and policy
  documentation
• Today at Berkeley Lab Announcements
• Will include key deadlines and LETS Sweeps with
  links to relevant details
• Announcements will also be included on My Blis
  Portal
• September Finance Network Scheduled September
  21st
• A high level presentation of key changes and
  dates
• Available on the web site
• Formal Training Classes (August 15 and 18)
• A more detailed review of close functions and
  procedures

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Information Sources

• FMS (Project Costing)
• Queries (Fiscal Year End Folder)
• N-vision
• IRIS
• Cost Browser
• Reports
• BRS/BLIS
• BR status reports (OCFO Web page)

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ScheduleVertis EllisGeneral Accounting
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FY 2006 Close Schedule - DRAFT
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FY 2006 Close Key Dates
Soft Close Schedule

• 9/07 First Soft Close
• 9/14 Second Soft Close
• 9/20 Final Soft Close

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FY 2006 Close Key Dates

• 9/12 Final submission of FY06 proposals, awards,
  and waiver requests to SPO by 500 pm
• 9/15 Requisitions to procurement
• 9/15 Final submission of all PAF forms due to
  Payroll office by 300 pm
• 9/15 Final travel expense vouchers due to Travel
  Office by 500 pm

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FY 2006 Close Key Dates

• 9/15 Final Integrated Contractor (IWO) September
  cost estimates due to AR by 600 pm
• 9/18 Final submission of rate changes (org.
  burden or recharges) due to Indirect Budget
  Office by noon
• 9/20 Final travel accruals (join the staff and
  relocations) due to Travel Office by noon

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FY 2006 Close Key Dates

• 9/20 Final submission of miscellaneous invoice
  requests due to AR by 400 pm
• 9/21 Final requests to open projects (DOE and
  WFO) in FMS by noon
• 9/21 Final non-PO requests due to AP by noon
• 9/21 Final Invoice certifications due to AP by
  noon

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FY 2006 Close Key Dates

• 9/21 Tree Freeze No further project status
  changes or reparenting after 900 pm
• 9/22 Final LETS sweep at 500 pmAll feeders due
  by 800 pm
• 9/26 Final accruals due to AP by 300 pm
• 9/26 Final prepayment forms due to GA by 300 pm
• 9/26 Final submission of MLA, IJE, and IPA
  accruals to AR by 400 pm

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FY 2006 Close Key Dates

• 9/27 Final divisional resource adjustments due
  in FMS and labor adjustments due in HRIS by 1000
  am
• 10/4 Tentative New period opens New FY07
  projects opened

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Jeremy CoyneIndirect Budget
Direct Programs, Work for Others Indirect
Budgets
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AGENDA

• Overview of the Close
• Communication
• Project Opening
• Preventive Maintenance
• Indirect Budgets
• Uncosted Balances
• Continuing Resolution

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OVERVIEW

• The Lab is required to manage our Costs on all
  projects at the most detailed funding level
• Fund Type, BR, BRN, BRN Sub, Program task
  Reimbursable Work Order
• We are required to manage our Equipment and
  Construction Liens at this same detailed level
• We are required to manage our DOE Operating Liens
  at the Obligational Control Level (Generally the
  2 or 4 digit BR)
• If you have a lien balance that appears to be
  an issue you will be contacted by the Budget
  Office Thursday September 28th 700
  am-100 pm

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OVERVIEW

• Each round of the Year End Close uses the same
  processes as the monthly hard close.
• Year End Close Resource Adjustments
• Should use appropriate resource categories and
  projects
• Unless they are accruals, should not be reversing
• No changes can be made to FY 2006 costs after the
  final round of the year end close

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COMMUNICATION

• Budget Office Contacts
• Direct Michelle Bennett x6207 MLBlaha_at_lbl.gov
• Indirect Jeremy Coyne x4518 JDCoyne_at_lbl.gov
• Unlike prior years, you are not required to send
  resource adjustment IDs to the Budget Office
  prior to posting for Rounds 2 3
• Final resource adjustments should be in valid
  status by September 27th 1000 am
• If you are notified to do an adjustment in later
  Rounds you will need to provide the journal ID to
  the Budget Office

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COMMUNICATION
After each round of the Year End Close

• BR Status Reports will be published on the
  CFO/Budget Office web page at http//fsdwprod.lbl.
  gov/cfo/cfobnrList.asp
• BR Status Reports reflecting Budget System data
  will also be available via BLIS
• Due to the implementation of the new Budget
  System, we will be running parallel through the
  year end close and into FY07

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PROJECT OPENING

• FY06 Projects DOE, WFO Overhead
• Projects must be in FMS in requested status by
  1200 noon on Thursday, September 21st
• No changes should be made to projects after 1000
  pm Thursday, September 21st until GA opens for
  FY07
• Do not Close, Open, Reparent, change attributes
  ..
• FY07 Projects DOE Overhead
• New projects for FY07 and changes to the tree for
  FY07 (ie effective 10/1/06 or later) will be
  approved
• Up to Noon, Thursday, September 21st, please
  notify the Budget Office in advance
• After GA opens for FY07
• FY07 Projects WFO
• New FMS projects will be open after GA opens for
  FY07 and the awards have been generated

• Note Labor will go through closed projects with
  LETS error notice

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PREVENTIVE MAINTENANCE

• What should I be doing now?
• Review project costs
• Verify BRs and other funding fields for
  projects
• Review commitment balances open POs and trips
• Consider what costs might need to be accrued
• Make any necessary corrections prior to the
  September soft closes

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INDIRECT BUDGETS

• Science Divisions
• Organization Burden
• Recharges
• Overhead Divisions
• Organization Burden
• Recharges
• Institutional Overhead Budgets
• GA, Site Support, LDRD, Procurement, Travel, NN
  and SS

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INDIRECT BUDGETS

• Budget Office plans for Org and Recharge budgets
  to have a net zero variance at year-end Costs
  Recovery
• Let us know of any anticipated variances
• Budget Office plans for Overhead Departments to
  meet their costs up to approved budgets
• Let us know of any anticipated variances
• Notify the Budget Office of any rate changes by
  noon on Monday September 18th

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INDIRECT BUDGETS

• At fiscal year-end, total recoveries must equal
  total costs on BR YN0100000 at fiscal close

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UNCOSTED BALANCES

• Timing Occurs after the Year End Close is
  complete
• Guidance - Will be sent to divisions
• Justifications when needed are for the entire
  uncosted balance of the program

Total Uncosted Balance for the program
S Divisional Uncosted Balances in 9-digit BRs

• The Budget Office will notify divisions about
  which BRs will need a justification
• This is not a deobligation request

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CONTINUING RESOLUTION

• As always there is the probability that we will
  be under a Continuing Resolution for FY07
• We are still required to keep our costs within
  the funds provided
• Chicago will be allocating funding based on the
  WASs that have been received from the Programs
• If an emergency situation arises, please contact
  the Budget Office and we will work with you to
  pursue available options

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Purchasing DeadlinesJohn SperosProcurement
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Procurement Requisitions

• Procurement will use its best efforts to process
  requisitions so they can cost in FY06
• Requisitions should be sent to Procurement no
  later than 9/15 if they are to cost in FY06
• Complex and long lead-time purchases may not cost
  in FY06

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Procurement Accruals

• Accrue through Division Contacts
• One-time Purchase Orders
• Procurement Card (PCard) purchases
• Blanket/RD/IUT/PSA/Consultant
• B2B System Contracts
• eBuy Purchase Orders

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Procurement One-time POs

• One-time PO Cutoff Dates
• Orders received by Receiving by 9/22 COB (630
  pm) will automatically be accrued/costed in G/L
• FOB Destination Orders received after 9/22 and
  received by COB 9/29 must be manually accrued
• FOB Shipping Point Orders not received by 9/22
  and shipped by 9/29 must be manually accrued
• Pickups Deliver Packing List/Notify Receiving by
  9/22
• Check IRIS or PeopleSoft to determine status
  charges posted by 8 am 9/23

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Procurement PCard Orders

• Procurement Card (PCard) Cutoff Dates
• FOB Destination Charges posted to the card after
  9/21 and material received by 9/29 should be
  manually accrued
• FOB Shipping Point Charges posted to the card
  after 9/21 and material shipped by 9/29 should be
  manually accrued
• Orders 1K not posted to the card by 9/21 but
  received (FOB Destination) or shipped (FOB
  Shipping Point) by 9/29 should be manually
  accrued
• Pickups Deliver Packing List/Notify Receiving by
  9/29
• Procurement uploads bank statement at 10 am 9/22
  Buyers match charges by 11 am 9/22 Charges post
  to G/L by 11 am
• G/L postings for orders posted to the card
  through 9/21 available for lookup on 9/22 (IRIS
  PCard software)

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Procurement - Blankets

• Blanket / RD Subcontract / IUT / PSA /
  Consultant Agreement Cutoff Dates
• Charges invoiced and certified by 1200 pm 9/21
  will be automatically costed to September G/L
• Charges 1K incurred between 9/21 9/29 should
  be manually accrued
• Check G/L posting on IRISContact A/P
  Representative

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Procurement System Contracts

• B2B System Contract Cutoff Dates
• Orders placed and invoiced by 9/20 COB will post
  to September G/L
• Orders 1K placed after cutoff date and
  received by 9/29 should be manually accrued
• Check G/L posting on IRIS for OfficeMax, VWR,
  Sigma Aldrich charges posted on 9/23
• See A/P Representative for others

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Procurement eBuy POs

• eBuy (PSS/CE) Purchase Order Cutoff Dates
• Orders placed and invoiced by 9/22 will post to
  September G/L
• Orders 1K placed after cutoff date and
  received by 9/29 should be manually accrued

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Procurement Cutoff Dates
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Accruals, Prepayments and Travel

• Barbara Gómez A/P
• Jill Stark Travel

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Accruals DOE Policy

• DOE Accounting Handbook, Chapter 11
• Liabilities recorded in financial statements
  shall reflect both invoices received, and
  accruals for any costs incurred, or assets
  received for which progress billings, grant
  reimbursement requests, and other billings have
  not yet been received.
• Maintain accounts on an accrual basis. Costs and
  revenues shall be identified with and recorded in
  the period in which they are incurred, even if
  receipt of the revenue or payment for the
  expenditure occurs in a subsequent accounting
  period.

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Accrual Policy- Manual accruals will be required

• Goods
• Items received by department, but the invoice was
  not received by AP
• Items were shipped but not received by September
  30 and the subcontract terms are FOB shipping
  point
• Services
• If the service was provided during the fiscal
  year but the invoice was not received or
  certified
• Reference LBNL Policy dated March 31, 2005

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Terminology

• FOB (Freight on Board) Shipping Point
• Title changes when shipped
• FOB Destination
• Title changes at destination

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Accrual Process

• The accrual procedure will be similar to previous
  years
• We will include a log on the web of all accruals

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Accrual Form Instructions

• Type or Print Clearly
• Please include the total
• All forms must be signed by approver
• Track the number of forms you send using the
  Control Number Field limit 8 characters
• Use one resource category per form

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Accrual Form (contd)

• All accruals will reverse in October
• FAX completed forms to x- 5995
• AP will call you to confirm receipt of your faxed
  accrual request
• Distinguish numbers from alphas on project ids
• Please adhere to naming convention
• Form is available on Year End website

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Prepayments DOE Policy

• DOE Accounting Handbook, Chapter 7
• Expenses should be prepaid only when required by
  standard business practice. Standard business
  practice usually requires prepayment for rent,
  taxes, royalties, subscriptions, and insurance.
• Prepayments shall be expensed over the period to
  which they apply.

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Prepayments - LBNL Guidance

• Chapter 7 of the DOE Accounting Handbook states
  that Prepayments shall be expensed over the
  period to which they apply.
• Example You owe 10,000 for a software
  maintenance contract that runs from July 2006
  through June 2007. If you pay the invoice related
  to this service in September, note on the
  certification that 2,500 is to be charged to
  your project in FY2006 and that the 7,500
  balance should be booked as a pre-paid expense.
• General Accounting has a form for prepaid
  expenses on the Year end website (Fax to Victor
  Chan x 2878).
• We do not accrue for recharges for Lab-provided
  services.

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Prepayments

• Prepayment form is available on the Year End
  Close website.

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Non-PO Requests

• Must be received in Accounts Payable by noon on
  9/21 for the following
• Reimbursements and Requests for Issuance of Check
• Stipends and Honoraria
• All invoice certifications

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Travel

• Manual accruals will be required if
• Relocation expenses are incurred
• Local travel over 1k is incurred
• Division does not use TAs (Travel
  Authorizations)
• Automated accruals will occur on all approved
  trips with TAs

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Travel for Lab Employees

• Divisions should-
• Review all open trips
• Request that Travel Department cancel those trips
  never taken
• Submit vouchers by cob 9/15
• Travel will accrue cost of trips which
• Are in approved status and TAs were used
• Will have been completed by 9/30
• Prorated accrual of trips spanning September and
  October by days

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Join-the-Staff Change of Station Travel

• Divisions identify uncosted join-the-staff travel
  expense
• If not costed by 9/22, complete separate AP
  accrual form where cost is estimated to be
  gt1,000
• Fax to Jill Stark in Travel (FAX [phone]) 
• Jill will validate amounts as FY06 expenses and
  forward to AP for processing

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Resource Adjustments

• Mary Clary
• Financial Policy Training

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What is a Resource Adjustment?

• A Resource Adjustment is an online process in
  which costs are transferred from one LBNL project
  or account to another.

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Criteria

• A Resource Adjustment is to be made only when it
  meets the following criteria

Necessary
Appropriate
Fully Documented Justified
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Necessary

• When the costs, as originally recorded, were
• Charged to an intermediate cost objective need
  to be allocated to final cost objectives or
• Coded improperly, thereby, charging wrong
  project(s), suspense/dropout project(s), or an
  inappropriate resource category or
• Where there has been a justifiable appropriate
  change in decision as to where a resource is to
  be used.

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Appropriate

• A Resource Adjustment is appropriate only when
  costs are
• Reasonable (prudent business judgment)
• Allocable to the receiving project (project
  receives benefit)
• Not expressly unallowed in Contract 31 (via
  Federal Acquisition Regulations FAR)

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Fully Documented

• Documentation is subject to audit and should be
  retained for three years according to Laboratory
  archiving policies.
• An email confirmation to the authorized requestor
  is to be retained with other supporting data.
• Documentation, including all approvals is to be
  maintained by the originating division

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Approval Threshold

• Resource adjustments of 5,000 need approval
  from a designated approver.
• Threshold definition The amount of total direct
  cost debits or credits of the Resource
  Adjustment.
• Exception to threshold
• Month end reversing adjustments/accruals by OCFO
• Recurring service center recharges require a
  single, annual approval

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Labor Adjustments in HRIS

• Labor adjustments are resource adjustments.
• The same rules apply!

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Justifications Not So Good

• Moving the unallowable costs of from XXXXXX to
  the appropriate account XXXXXX.
• Project manager did not know who to contact to
  change project id on telephone services.
• Correction

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Justifications - Better

• Transfer travel costs to benefiting projects. Dr.
  XXXX erroneously charged XXXXXX for her Dec trip.
  Her time card shows XXXXXX should be the
  benefiting project.
• To reallocate Sep04 Fedex charges that
  inadvertently went into the division dropout
  acct. because the airbill was missing a project
  id and/or had an invalid project id listed. This
  RA will transfer costs to the appropriate
  benefiting project.
• Employee's effort went to the drop out project
  ID. This adjustment moves the cost to the correct
  project ID.

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Year End Close Challenges

• What challenges do you anticipate?
• How can we help you?

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• Questions and Discussion