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REQUIREMENTS AND POLICIES MANUAL

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Financial Approvals

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    Title:

    Financial Approvals

    Publication date:

    9/11/2020

    Effective date:

    8/1/2020

    BRIEF

    Policy Summary

    This policy defines the types of approvals for the use and disbursement of funds, and / or the recording of adjustments and accruals for materials, goods, and services ("financial transactions"), at Lawrence Berkeley National Laboratory (Berkeley Lab) and how the authority for those approvals is established. It also defines the roles and responsibilities of Berkeley Lab employees who have been designated as authorized approvers of financial transactions.

    Who Should Read This Policy

    This policy applies to persons who initiate or manage the approvals for the use and disbursement of funds and / or the recording of adjustments and accruals for materials, goods, and services ("financial transactions") on behalf of Berkeley Lab, including persons who have been delegated approval authorities.

    To Read the Full Policy, Go To:

    The POLICY tab on this wiki page

    Contact Information

    General Accounting Manager

    Title:

    Financial Approvals

    Publication date:

    9/11/2020

    Effective date:

    8/1/2020

    POLICY

    A. Purpose

    This policy defines the types of approvals for the use and disbursement of funds, and / or the recording of adjustments and accruals for materials, goods and services ("financial transactions") at Lawrence Berkeley National Laboratory (Berkeley Lab) and how the authority for those approvals is established. It also defines the roles and responsibilities of Berkeley Lab employees who have been designated as authorized approvers of such financial transactions.

    B. Persons Affected

    This policy applies to persons who initiate or manage the approvals for the use and disbursement of funds and / or the recording of adjustments and accruals for materials, goods, and services ("financial transactions") on behalf of Berkeley Lab, including persons who have been delegated approval authorities.

    C. Exceptions

    Not applicable.

    D. Policy Statement

    1. General
      1. Financial transactions must be properly approved by Laboratory employees with appropriate authority. The required authority will be dependent on the type of transaction.
      2. Authority to approve financial transactions is delegated from the President of the University of California (UC) to the Laboratory Director. The Laboratory Director further delegates this authority to the positions with responsibility for carrying out the related duties. Within Berkeley Lab, Delegations of Authority to approve are subject to the following key principles:
        1. While certain actions can be delegated, accountability cannot be delegated.
        2. A person cannot delegate greater responsibility than he or she has.
        3. Tasks shall only be delegated to people who are qualified to perform them.
        4. A qualified person must:
          1. Be actively involved in the tasks being performed.
          2. Have the appropriate knowledge and technical skills to perform those tasks, including knowledge of relevant regulations and policies. This includes understanding of what their approval means.
          3. Have the authority to carry out the tasks.
        5. A person delegating tasks is responsible for ensuring that those tasks are being properly performed.
      3. In general, delegations of authority to approve are made in conformance with the table below.

        Approver

        Receives Authority From

        Lab Director

        UC President

        Associate Lab Directors

        Lab Director

        Division Director

        Lab Director/ Associate Lab Director (ALD)

        Department Head

        ALD/Division Director

        Program Manager

        ALD/Division Director/Department (Dpt) Head

        Business Manager

        ALD/Division Director/Dpt Head

        Chief Financial Officer

        Lab Director

        Controller/ Budget Officer/Chief Procurement Officer/Field Finance Head

        Chief Financial Officer (CFO)

        Field Finance Manager

        CFO/Field Finance Head

        Resource Analyst

        CFO/Field Finance Manager

        Department Administrator

        ALD/Division Director/Dpt Head

        Disbursement Accountants

        CFO/Controller

        General Accountants

        CFO/Controller

    2. Responsibilities of Authorized Approvers
      1. Individuals authorized to approve financial transactions are responsible for assuring the following:
        • There is an understanding of what is being approved.
        • The information and supporting documentation are accurate and complete.
        • The transaction is allowable, reasonable, and justified.
        • The transaction is charged to the correct project/activity.
        • There are adequate funds to cover the expense.
        • The funding is available and the funding source is appropriate for the expenditure.
      2. Individuals may approve only financial transactions within their authorized dollar limit.
      3. Financial transactions may be approved only by Laboratory employees with the appropriate authority:
      4. By personally signing the required document, or
      5. By personally endorsing their approval online (if appropriate).
      6. Individuals with financial approval authority must comply with all applicable Department of Energy (DOE), UC, and Laboratory policies, laws, regulations, and special restrictions on the use of funds. Unauthorized transactions will be subject to management review. Failure to comply may result in financial and/or criminal liabilities for the individual or the UC.
    3. Approval Types
      1. Specific Types of approval authorities and the core responsibilities of individuals who hold those authorities are outlined in the table below.
      2. Approval authorities listed below are not the same as Procurement authority. Only Procurement staff who have delegated Procurement authority may commit Laboratory funds. This commitment of funds occurs when Procurement dispatches the purchase order (PO) after it has all other necessary approvals.

        Type of Approval

        Core Responsibility

        System(s)

        Time and Labor Approval Authority

        • Validates that worked hours certified were charged to the benefitting project/activity. Confirms leave taken is charged.
        • Refer to the Time and Labor Reporting policy (“Section D.5”)

        LETS

        Resource Adjustments (non-labor and labor)

        Validates the adjustment is necessary, appropriate, and timely and includes adequate documentation.

        FMS/Manual

        Accruals

        • Validates the accrual is necessary, appropriate, and timely and includes adequate documentation.
        • Ensures that costs are accounted for in the period in which the benefit is received.
        • Ensures that accruals are made subject to materiality considerations as documented in the Accruals policy.

        FMS/Manual

        Travel Approval Authority

        • Validates the business necessity of the requested trip.
        • Reviews submitted reimbursement for expenses for allowability and allocability for the project / activity being charged.

        TREX/FMS

        Requisitions

        • Ensures that funding is available, the correct item category is selected (may need to consult with Tech Rep), and that benefitting project/activity codes are used.
        • Validates that the items requested are supported by a business justification, and are allowable and reasonable.
        • For purchase of sensitive items, a secondary approval is required by a subject matter expert who ensures the items are appropriate and allowable.

        FMS

        Invoice Certification

        • Validates that invoices adhere to the terms and conditions of the purchase order/subcontract. This includes validating that all required supporting documentation is attached to the invoice before approval.
        • For services, validates they have been satisfactorily performed per purchase order/subcontract requirements.
        • For goods flagged for acceptance in the purchase order, validates any required testing and acceptance is complete, including confirmation that it meets quality assurance requirements.
        • For invoices greater than $100K having a purchase order/subcontract greater than $1M, additional approval levels are required.
          • High-Value Approver validates the appropriateness and necessity of the high-value purchase and
          • Buyer validates the invoice conforms to the terms and conditions of the purchase order / subcontract.

        FMS

        Certification of PCards

        • Validates that the items requested are supported by a business justification and are allowable and reasonable.
        • Validates the correct item category is selected and that benefitting project/activity codes are used.
        • Ensures that necessary documentation is maintained and available for support of the transaction.

        FMS

    4. Approval Methods
      1. Authorized approvers are identified/captured in the following:
        1. Approval matrices in the Financial Management System (FMS), including Signature Authority System ("SAS") (e.g., requisitions, certifications).
        2. Functional roles established in Berkeley Lab financial systems, (e.g., non-labor adjustments, service accruals).
        3. Published manual approval matrices (e.g., non-service accruals).
        4. Formal delegations of authority, (e.g., formal procurement authority).
    5. Administration of Authorities
      1. FMS Signature Authority
        1. Individuals must complete online Laboratory Signature Responsibility Training prior to obtaining signature authority. Department or division managers are responsible for submitting a Delegation of Signature Authority form to the Controller's Office for each of the following actions:
          1. To establish signature authority within the financial systems. This authority must be approved by the Controller for authorization amounts requested greater than $500K.
          2. When an employee having signature authority transfers to another department or division (the employee's new department or division submits the form).
          3. When the signature authority limit of an employee with signature authority has changed.
          4. When an employee is delegated signature authority.
          5. When signature authority of an employee is cancelled.
        2. On an annual basis, the Office of the Chief Financial Officer (OCFO) will formally request that each department/division managers or supervisors review their list of individuals with signature authority. The review consists of identifying whether (1) the assigned approvers require continued access or should be removed and (2) assigned approval limits are appropriate.
      2. FMS Role-Based Authority
        1. Roles in FMS will be assigned based on the individual's required job duties.
        2. Assignment of FMS functional roles will give consideration to segregation of duties.The OCFO's Business Systems Analysis group will maintain roles in the FMS system in accordance with established FMS User Access Control policy.
      3. Published Manual Approval Matrices
        1. Published manual approval matrices are used when the transaction mechanism is not integrated with an FMS approval matrix or role assignment.
      4. Formal Delegations of Authority
        1. UC Office of the President issues formal memos to provide delegated authorities. These delegations remain in effect until superseded or revoked.
        2. The Lab Director determines when to further delegate authority, giving consideration to any limitations set forth in the delegation memos.
        3. The Chief Procurement Officer delegates Procurement Authority to Procurement staff based on qualifications and job requirements.

    E. Roles and Responsibilities

    Managers, supervisors, and employees have the responsibility to adhere to the provisions of this policy.

    Role

    Responsibility

    Lab Director

    • Has ultimate responsibility for appropriate financial management practices and for the establishment and administration of financial management policies.
    • Delegates responsibility for financial policy making and transactional authority to the Chief Financial Officer (CFO).
    • Ensures that a strong resource stewardship and funds-control environment and culture exist.

    Chief Financial Officer

    • Has overall responsibility for financial stewardship of Lab resources and establishment and administration of financial management policies.
    • Directs and manages fiduciary and financial systems and controls.
    • Administers and implements internal controls consistent with this policy.

    OCFO System Module Owners (Controller, General Accounting Manager, Procurement Head, Budget Officer)

    • Establishes criteria for controlling user access to various features of the financial systems, including prerequisites to be met prior to granting user access to specific system roles.
    • Maintains overall authority for granting signature authority and concurring with FMS role assignments.
    • Collaborates with Business Systems Analysis (BSA) to identify approval roles that are incompatible due to a potential conflict of interest requiring separation of functional duties/responsibilities.

    General Accounting

    • Executes the annual review of the SAS approvers list to ensure assigned individuals require continuing access and have appropriate approval limits.

    All employees

    • Ensure that they provide the transaction approver with sufficient documentation to support the allowability, allocability, and reasonableness of costs.
    • Cannot approve a transaction initiated by oneself.

    Business Systems Analysis

    • Works with process owners to validate that user access and assigned roles and permissions are consistent with business needs.
    • Ensures that changes to a user's access and privileges are authorized by the user's manager or supervisor.
    • Conducts and/or coordinates regular reviews of user access and privileges listed below:
      • Sensitive roles: Reviews every six months.
      • All roles (including sensitive roles): Reviews every 12 months.

    Resource Analysts/Field Finance Managers

    • Exercise delegated signature authority on financial transactions.
    • When approving transactions:
      • Understand and appropriately apply Lab and funding sponsor financial policies, guidelines, and contract terms.
      • Ensure all costs (labor, procurements, travel, etc.) are appropriate, allowable, and allocable to the project/activity benefitting from the cost.

    Program Managers (PMs)/Principal Investigators (PIs)

    • Have overall financial responsibility and accountability for the programs/projects/functions they manage.
    • Manage and control project funds in a prudent manner and expend funds in accordance with the restrictions imposed by contract terms and Lab policies. Note that while PMs/PIs may delegate the day-to-day management of project finances to other professional staff, accountability for compliance with contractual and financial requirements cannot be delegated and remains with the PI.
    • When approving transactions:
      • Understand and appropriately apply Lab and funding sponsor financial policies, guidelines, and contract terms.
      • Ensure all costs (labor, procurements, travel, etc.) are appropriate, allowable, and allocable to the project/activity benefitting from the cost.
    • Have a responsibility to ensure, in consultation with the division's or area's OCFO resource management staff, that costs charged to their projects are allowable.

    Procurement Buyers

    • The authority to make contractual commitments through procurement transactions has been specifically delegated to individuals primarily assigned to the Office of the Chief Financial Officer (OCFO)/Procurement & Property Management Department. Only these formally designated individuals may commit Berkeley Lab to the expenditure of funds.
    • For invoices over $100,000 on subcontracts over $1 million, ensure that the invoice conforms to the terms and conditions of the purchase order subcontract.

    Division Management (including Division Business Managers / Deputy of Operations)

    • Has overall financial responsibility and accountability for all area-/division-managed research and operating programs.
    • Has a responsibility to provide reasonable assurance that the programs in their area/division comply with the financial stewardship requirements in this policy.
    • Has a responsibility to ensure that the area/division has a financial stewardship and internal control environment where delegated signature authority provided to cognizant division staff members for executing financially related transactions is sound and appropriate and has integrity.
    • Exercises delegated signature authority on financial transactions.
    • When approving transactions:
      • Understands and appropriately applies Lab and funding sponsor financial policies, guidelines, and contract terms.
      • Ensures all costs (labor, procurements, travel, etc.) are appropriate, allowable, and allocable to the project/activity benefitting from the cost.

    Approver

    • Approves transactions in a timely manner.
    • Ensures that the transaction meets all relevant policy criteria prior to approval, including documentation requirements.

    Work Lead/Supervisor

    • Validates that worked hours were charged to the benefitting project/activity. Confirms leave taken is charged to the appropriate leave account.

    Invoice Certifier

    • Uses the online certification system to certify in a timely manner that services have been performed and/or goods have been received and include all required supporting detail. For example, a T&M subcontract would require labor cost detail including names, positions, job classifications, hourly rates, number of hours worked and materials used.
    • Validates receipt of goods or services performed, and ensures that subcontractor invoices adhere to all contractual requirements, including ensuring all required supporting documentation is attached to the invoice.
    • Validates receipt of goods or that services performed are in accordance with the subcontract requirements and/or technical specifications.
    • Consults with the requester and/or technical representative as necessary to ensure invoices should be paid before certifying
    • Notifies the supplier and the procurement specialist of any discrepancies to resolve them in a timely manner.

    Technical Representative

    • Coordinates with the invoice certifier and/or requester to certify that goods and services have been received per subcontract requirements prior to invoice payments.

    F. Definitions/Acronyms

    Term

    Definition

    Certifier

    A Berkeley Lab employee designated to review and certify invoices, and to validate the receipt of goods or services prior to payment. Certification does not authorize the commitment of funds.

    Disbursements

    The act of paying out or disbursing money

    Employee For the purposes of this policy, any Laboratory employee who has been granted signature authority at the Laboratory

    Financial Transaction


    The use and disbursement of funds, and / or the recording of adjustments and accruals for materials, goods, and services

    Pcard

    Credit card issued to designated Berkeley Lab personnel for purchasing goods and services

    Procurement Specialist

    An employee in the Berkeley Lab Procurement and Property Management Department who is responsible for the solicitation, negotiation, award, administration, and closure of subcontracts. Also referred to as the buyer.

    Project ID

    A project identification number used to accumulate, manage, and report costs associated with individually funded activities at the Laboratory

    Requisition

    The process of requesting a purchase order for payment in order to purchase an item with a vendor using the Laboratory's official Procurement process

    Resource Adjustment

    An online process to transfer costs or labor effort from one Berkeley Lab project or account to another

    Signature Authorization System (SAS)

    A database located in FMS that lists the dollar limits for each individual with signature authority

    Technical Representative

    A trained employee designated by a division who provides technical direction on the subcontract and monitors subcontractor performance.

    G. Recordkeeping Requirements

    none

    H. Implementing Documents

    Document number

    Title

    Type

    11.07.005.001

    Delegation of Signature Authority form

    Form

    11.07.005.002

    Signature Authority Guidelines

    Guidelines/manual

    11.07.005.003

    Laboratory Signature Responsibility Training

    Online training

    I. Contact Information

    Controller

    J. Revision History

    Date

    Revision

    By Whom

    Revision Description

    Section(s) Affected

    Change Type

    9/11/2020

    0

    M. Beedle

    New Policy - Incorporates former Signature Authority Policy and additional financial approval requirements

    all

    Major

    12/17/2020
    D. Soustin Updated Contract 31 I clause numbers as per mod 1105 SRDs Editorial
    10/17/2022
    T. Carlson

    Update broken links for the Signature Authority Guidelines. No changes to effective or next review dates. 

    D.5 Editorial

    DOCUMENT INFORMATION

    Title:

    Financial Approvals

    Document number

    11.07.006.000

    Revision number

    0

    Publication date:

    9/11/2020

    Effective date:

    8/1/2020

    Next review date:

    7/31/2023

    Policy Area:

    Financial General Policies and Information

    RPM Section (home)

    Financial Management

    RPM Section (cross-reference)

    None

    Functional Division

    OCFO

    Prior reference information (optional)


    Source Requirements Documents