BRIEF

Policy Summary

This policy provides guidelines on Lawrence Berkeley National Laboratory (Berkeley Lab) write-offs of uncollectible accounts receivable. To limit write-off entries, Berkeley Lab aggressively takes collection actions to resolve all delinquent debt whenever doing so is possible and cost-effective.

Who Should Read This Policy

All employees in the Office of the Chief Financial Officer (OCFO) and division leadership (including business operations staff and principal investigators) responsible for receivables management and related write-offs

To Read the Full Policy, Go To:

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Contact Information

Reimbursable Budget Manager, OCFO

POLICY

A. Purpose

This policy provides guidelines on Lawrence Berkeley National Laboratory (Berkeley Lab) write-offs of uncollectible accounts receivable.

B. Persons Affected

All employees in the Office of the Chief Financial Officer (OCFO) and division leadership (including business operations staff and principal investigators) responsible for receivables management and related write-offs

C. Exceptions

Not applicable

D. Policy Statement

1. General
   1. Berkeley Lab has two types of receivables that may be subject to delinquency and nonpayment:
      1. Reimbursable receivables.
      2. University of California (UC) receivables.
   2. To limit write-off entries, the Laboratory aggressively takes collection actions to prevent delinquent accounts receivable balances and resolve all delinquent debt whenever doing so is possible and cost-effective.
   3. The Laboratory Financial Management System generates, on a monthly basis, accounts-receivable aging reports for all receivables, reimbursable or UC. All reports are categorized by contract or advance type and include the following information:
   4. Invoice number.
   5. Days outstanding calculated from the invoice date and binned in 30-day increments.
   6. It is the Reimbursable Budget Group's responsibility to monitor the aging on a monthly basis and aggressively collect reimbursable receivables in order to minimize risk of loss.
   7. It is the Intellectual Property Office's (IPO) responsibility to monitor the aging of UC receivables on a monthly basis and aggressively collect reimbursable receivables in order to minimize risk of loss.
2. Reimbursable Receivables
   1. Reimbursable receivables include the following:
      1. Sponsored Research awards.
      2. Interlocation Appointments.
      3. Cooperative Research and Development Agreements (CRADAs).
      4. Other miscellaneous receivables.
   2. Uncollectible receivables arise when reimbursable activities performed under the management and operating (M&O) contract between the UC and DOE are unpaid by the sponsor/third party.
   3. Uncollected receivables are to be considered bad debts and written off when they are determined to be uncollectible. Under the terms of Contract 31 and FAR 31.205-6, bad debts are unallowable costs. Therefore, when receivables for reimbursable activities are deemed uncollectible, the costs are charged to the UC management fee.
   4. When aged reimbursable receivables may need to be written off, the following steps are taken:
      1. The Reimbursable Budget Group will prepare a quarterly report of uncollectible and aged receivables and submit that report to the Controller for review. Aged receivables are invoices greater than 180 days. The quarterly submission will include Reimbursable Budget Group's recommendations and justification to support either ongoing collection efforts or write-offs.
      2. The Controller will review the uncollectible and aged receivable report with the Chief Financial Officer (CFO), and those receivables deemed uncollectible will be submitted to the UC Office of the National Laboratories (UCNL) for review and approval to be charged to the UC management fee.
3. UC Receivables
   1. UC receivables are receivables related to intellectual property (IP) activities, including:
      1. License, option, and bailment fees (such as issue fees).
      2. Royalties.
      3. Recoverable patenting costs (hereafter called "licensing fees").
   2. During the term of Contract 31, the receivables generated from IP‐related activities are owned by UC in accordance with (1) Contract 31 Clause I.148 (h) and (2) the Bayh–Dole Act (effective July 1, 1981), which allows universities and small businesses to elect to retain ownership of inventions made under federal funding.
   3. Because these receivables are UC-owned, they are subject to the write-off provisions contained in the UC Accounting Manual (AM) R-212-2, Receivables Management. UC policy requires the write-off of uncollectible receivables to be authorized by campus chancellors.
   4. Uncollectible receivables arise when invoices for IP licensing fees are unpaid by the licensee or optionee. Uncollected receivables are to be considered bad debts and written off when they are determined to be uncollectible.
   5. The IPO will prepare a monthly aged receivables report for IPO management review. When an aged UC receivable may need to be written off, the following steps are taken:
      1. The IPO will prepare a write-off recommendation to be reviewed and approved by IPO management and then submitted to the Controller.
      2. The Controller will review the submitted materials with the CFO. The CFO will authorize receivables for write-offs. If the write-off would result in unallowable costs, the write-off will be submitted to UCNL for review and approval to be charged to the UC management fee.

E. Roles and Responsibilities

1. In the context of this policy, division leadership includes the division director, deputy director, business manager, or other division operations staff to whom the division director has assigned financial accountability.

F. Definitions/Acronyms

G. Recordkeeping Requirements

None

H. Implementing Documents

None

I. Contact Information

Reimbursable Budget Manager, OCFO

J. Revision History

DOCUMENT INFORMATION

Source Requirements Documents

• DOE Accounting Handbook, Chapter 8, Receivables
• Contract 31, Clause I.148, DEAR 970.5232-2, Payments & Advances (DEC 2000) (Alternates II and III) (prev. I.102)
• FAR 31.205-3, "Bad Debts"
• UC Accounting Manual (AM) Policy R-212-2, Receivables Management
• Contract 31, Clause I.152, DEAR 970.5232-6, Strategic Partnership Projects Funding Authorization (April 23, 2015) (prev. I.106)

Implementing Documents

None

Other References