# Presentation: 143343

## Fiscal Year End CloseProcess Overview Seminar

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

## Mentors/Instructors

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

## Agenda

- The big picture
- Information sources
- The close schedule
- Direct programs, WFO & Indirect Budgets
- Purchasing deadlines
- Accruals, prepaids & travel
- Resource adjustment policy
- Q&A and Discussion

## The Big Picture and Information Sources

- Lesta Nadel
- CFO Field Operations, EH&S, Facilities

## 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 DOE’s
- 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)

## 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

## 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

## 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_Close/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**

## Information Sources

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

## ScheduleVertis EllisGeneral Accounting

## FY 2006 Close Schedule - DRAFT

## FY 2006 Close – Key Dates

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

- Soft Close Schedule

## FY 2006 Close – Key Dates

- 9/12  Final submission of FY06 proposals, awards, and waiver requests to SPO by 5:00 pm
- 9/15  Requisitions to procurement
- 9/15  Final submission of all PAF forms due to Payroll office by 3:00 pm
- 9/15  Final travel expense vouchers due to Travel Office by 5:00 pm

## FY 2006 Close – Key Dates

- 9/15  Final Integrated Contractor (IWO) September cost estimates due to AR by 6:00 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

## FY 2006 Close – Key Dates

- 9/20  Final submission of miscellaneous invoice requests due to AR by 4:00 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

## FY 2006 Close – Key Dates

- 9/21	Tree Freeze – No further project status changes or reparenting after 9:00 pm
- 9/22  Final LETS sweep at 5:00 pmAll feeders due by 8:00 pm
- 9/26  Final accruals due to AP by 3:00 pm
- 9/26	Final prepayment forms due to GA by 3:00 pm
- 9/26	Final submission of MLA, IJE, and IPA accruals to AR by 4:00 pm

## FY 2006 Close – Key Dates

- 9/27  Final divisional resource adjustments due in FMS and labor adjustments due in HRIS by 10:00 am
- 10/4  Tentative – New period opens New FY07 projects opened

## Jeremy CoyneIndirect Budget

- Direct Programs, Work for Others & Indirect Budgets

- Jeremy CoyneIndirect Budget

## AGENDA

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

## OVERVIEW

- The Lab is required to manage our **Costs** on all projects at the most detailed funding level
**– ****Fund Type, B&R, 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 B&R)
**– *****If you have a lien balance that appears to be an issue you will be contacted by the Budget Office Thursday September 28******th******              7:00 am-1:00 pm***

## OVERVIEW

- 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***

## COMMUNICATION

*Direct – Michelle Bennett x6207 *_[MLBlaha@lbl.gov](mailto:MLBlaha@lbl.gov)_
*Indirect – Jeremy Coyne x4518 *_[JDCoyne@lbl.gov](mailto:JDCoyne@lbl.gov)_
- Unlike prior years, you are not required to send resource adjustment ID’s to the Budget Office prior to posting for Rounds 2 & 3
**Final** resource adjustments should be in valid status by September 27th 10:00 am
- If you are notified to do an adjustment in later Rounds you will need to provide the journal ID to the Budget Office

## COMMUNICATION

- After each round of the Year End Close ...

- B&R Status Reports will be published on the CFO/Budget Office web page at _[http://fsdwprod.lbl.gov/cfo/cfobnrList.asp](http://fsdwprod.lbl.gov/cfo/cfobnrList.asp)_
- B&R 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

## PROJECT OPENING

**FY06 Projects – DOE, WFO & Overhead**
- Projects must be in FMS in requested status by 12:00 noon on Thursday, September 21st
- No changes should be made to projects after 10:00 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**

## What should I be doing now?
Review project costs
Verify B&R’s and other funding fields for projects
Review commitment balances – open PO’s and trips
Consider what costs might need to be accrued
Make any necessary corrections prior to the September soft closes

- Review project costs
- Verify B&R’s and other funding fields for projects
- Review commitment balances – open PO’s and trips
- Consider what costs might need to be accrued
- Make any necessary corrections prior to the September soft closes

- PREVENTIVE MAINTENANCE

## INDIRECT BUDGETS

**Science Divisions**
- Organization Burden
- Recharges
**Overhead Divisions**
- Organization Burden
- Recharges
- Institutional Overhead Budgets
- G&A, Site Support, LDRD, Procurement, Travel, NN and S&S

## 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

- 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

- INDIRECT BUDGETS

## At fiscal year-end, total recoveries must equal total costs on B&R YN0100000 at fiscal close 

- INDIRECT BUDGETS

## 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

- Guidance - Will be sent to divisions
- Justifications – when needed are for the entire uncosted balance of the program

- UNCOSTED BALANCES

**Total Uncosted Balance for the program**

**Σ Divisional Uncosted Balances in 9-digit B&Rs**

- =

- The Budget Office will notify divisions about which B&R’s will need a justification
- This is not a deobligation request

## 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 WAS’s 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

- We are still required to keep our costs within the funds provided
- Chicago will be allocating funding based on the WAS’s 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

- CONTINUING RESOLUTION

## Purchasing DeadlinesJohn SperosProcurement

## 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

**Notes:**
Schedule has the same days of the week as last year but one day earlier.

##   Procurement Accruals

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

**Notes:**
In general, accrue if the amount is >=$1,000

##   Procurement – One-time POs

- One-time PO Cutoff Dates:
- Orders received by Receiving by 9/22 COB (6:30 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

**Notes:**
Do not manually accrue POs you expect to be received by 9/22

##   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)

**Notes:**
Use the IRIS PCard 2 Quick Report to see if an item was posted.
Post to Card vs. Post to GL.

##   Procurement - Blankets

- Blanket / R&D Subcontract / IUT / PSA / Consultant Agreement Cutoff Dates:
- Charges invoiced and certified by 12:00 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 IRIS;Contact A/P Representative

##   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

##   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

## Procurement Cutoff Dates

| Transaction | Description | Date |
| --- | --- | --- |
| Requisitions | Submit simple & short lead-time reqs no later than: | 9/15 |
| One-Time POs | Will automatically accrue/cost if received by: 	Manually accrue costs ≥$1K if received (FOB LBNL) or 	shipped (FOB vendor) by 9/29. | 9/22 6:30 pm |
| PCard | Last bank charge will automatically cost to GL at:	Manually accrue costs ≥$1K if received (FOB LBNL) or 	shipped (FOB vendor) by 9/29. | 9/22 11:00 am |
| Blanket Releases | Blanket invoices will cost to GL if certified by:
	Manually accrue services ≥$1K rendered 9/21 thru 	9/29. | 9/21 12:00 pm |
| System Contracts | VWR, OfficeMax, Sigma Aldrich will cost to GL if ordered & invoiced by:
	Manually accrue costs ≥$1K if received by 9/29. | 9/20 |
| eBuy POs | Will automatically cost to GL if ordered & invoiced by:
	Manually accrue costs ≥$1K if received by 9/29. | 9/22 |

## Accruals, Prepayments and Travel

- Barbara Gómez	A/P
- Jill Stark			Travel

- 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.

- Accruals – DOE Policy

## 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**

**Notes:**
Note:
Materiality is considered when  preparing an accrual.
If goods are received in the system, by September 23, an accrual will not be required even an invoice was not received.

## Terminology

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

## Accrual Process 

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

**Notes:**
Note:
Materiality is considered when  preparing an accrual.
If goods are received in the system, by September 23, an accrual will not be required even an invoice was not received.

## 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

## Accrual Form (cont’d)

- 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 id’s
- Please adhere to naming convention
- Form is available on Year End website

## 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.

## 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.

## Prepayments

- Prepayment form is available on the Year –End Close website.

**Notes:**
An example of a prepayment is a maintenance contract.

Note that prepayments are not limited to year –end and we would expect requests year round.

## 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

## Travel

- Manual accruals will be required if:
- Relocation expenses are incurred
- Local travel over $1k is incurred
- Division does not use TA’s (Travel Authorizations)
- Automated accruals will occur on all approved trips with TA’s

## 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 TA’s were used
- Will have been completed by 9/30
- Prorated accrual of trips spanning September and October by # days

## 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 >=$1,000
- Fax to Jill Stark in Travel (FAX 486-6888)
- Jill will validate amounts as FY’06 expenses and forward to AP for processing

## Resource Adjustments

- Mary Clary
- Financial Policy & Training

## 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.

## Criteria

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

**Necessary**

**Appropriate**

**Fully Documented & Justified**

## 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.

## 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)

## 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

## 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

## Labor Adjustments in HRIS

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

## 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

## 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.

## Year End Close Challenges

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

- Questions and Discussion