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POLICY

A. Purpose

This policy defines describes the guidelines for the initiation of the requirements for funds control at Lawrence Berkeley National Laboratory (Berkeley Lab's) ). It also defines the guidelines for initiating the Stop Work process to ensure compliance with federal regulations and the UC-DOE Prime Contract (Contract 31). It is intended as a tool to mitigate situations arising from potential funds-control issues (i.e., incurring uncollectible and/or unallowable costs), with the goal of safeguarding with these funds control requirements. When stopping work due to imminent danger, please refer to Berkeley Lab’s Stop Work Policy.

B. Persons Affected

Any Berkeley Lab employee with financial or project management responsibilities

C. Exceptions

This policy includes guidance for stopping work to prevent a funds control violation. This guidance provides a collaborative approach between the Office of the Chief Financial Officer (OCFO) and the area/division experiencing a potential funds control violation and is designed to investigate the issue and come to a joint resolution as quickly as possible. If warranted by the severity of the risk, the Chief Financial Officer (CFO), and/or Budget Officer have the authority to unilaterally stop or suspend work. This action will be immediately followed by the evaluation steps described below in Section D.4. They can exercise this authority in order to mitigate risk to the Laboratory while supporting its scientific mission. Other nonfinancial factors may also result in the requirement to stop work. These factors are covered in other policies.

D.

Policy

1. General

B. Persons Affected

Any Berkeley Lab employee with financial responsibilities

C. Exceptions

D. Policy Statement

1. The scope of this policy is limited to work activities funded by DOE and Work for Others (WFO) sponsors. A funds-control violation may result in a reduction in the Laboratory's fee, the assessment of fines, and/or a decrease in the Contract 31 performance measure rating, which could ultimately jeopardize the Laboratory's Contract 31 extension.
2. As a federal contractor, the Laboratory is required to adhere to Contract 31 regulations.
   1. Funds control is a core component part of Berkeley Lab’s financial stewardship responsibilities, and should be practiced for all projects at the laboratory.  Nearly all of the Laboratory’s projects are funded through Contract 31 and DOE Inter-entity work.  As such, activities funded by the Department of Energy (DOE), DOE integrated contractors, Strategic Partnership Projects (SPP) sponsors, and Cooperative Research and Development Agreements (CRADAs) are the focus of this policy.
   2. DOE and other sponsors fund the work of Berkeley Lab. The funds for authorized activities are included in Contract 31 through the Authorized Funding Plan (AFP) contract modifications. These funds are subject to limitations related to the authorized scope of work, the timing of funds receipts, and the period of performance.
      1. For projects funded by the DOE, the work authorization describing the work to be performed (including specific limitations and requirements), along with the associated funds (the AFP), must be received at the Laboratory before starting work.
      2. For DOE Inter-Entity projects, work can began upon receipt of a fully executed Inter-Entity Work Order (IEWO) and/or a Memorandum Purchase Order (MPO) or similar contracting mechanism (i.e., subcontract, standard purchase order, Integrated Contractor Order (ICO) etc.) and the period of performance is in effect.
      3. For a federal SPP agreement, work may commence after a fully executed contract is awarded, the period of performance is in effect, and funds have been received at the Laboratory. The Laboratory may elect to, at its own risk, utilize bridge funding to begin work prior to all of these requirements being met.
      4. For a nonfederal SPP agreement, work may commence after a fully executed contract is awarded, a cash advance has been requested and received, the period of performance is in effect, and funds have been received at the Laboratory. The Laboratory may elect to, at its own risk, use bridge funding to begin work prior to all of these requirements being met. Nonfederal SPP agreement funds are limited to the cash received from the sponsor. In some cases, a project may continue to incur costs in excess of cash received with approved bridge funding (see the Bridge Funding for Sponsored Research Projects policy for details).
   3. Funds control is a process to ensure that:
      1. Funds are expended solely for their authorized and appropriated purpose.
      2. Funds are obligated and expended within their authorized amounts.
      3. Costs and encumbrances are incurred within applicable time limits.
         1. Funds must be received at the Laboratory before being spent or encumbered.
         2. Costs and encumbrances may be expended only during the authorized period of performance.
   4. Projects must be managed to ensure that costs and encumbrances do not exceed the funds available at Berkeley Lab. A funds control violation occurs when costs and encumbrances are incurred in excess of funds included on the contract at the funds control level. Examples of funds control violations are detailed below in Section D.2.
   5. If a funds control violation is likely to occur, the area/division should work with its designated Resource Analyst (RA), Finance Manager and the Budget Office to determine mitigating actions, such as requesting additional funds from the sponsor or the use of bridge funding on SPP or IEWO awards. If all mitigating actions have been exhausted, the Stop Work process addressed below in Section D.4 should be initiated.
   1. If it is determined that an actual funds-control violation exists, per the process outlined in Section D.4, work activities must stop until the issue is resolved.
3. Examples of Funds Control Violations: Possible funds - control violations may include:
   1. DOE Direct-Funded Work
      1. Costs and/or commitments encumbrances incurred in excess of funds available.
      2. Costs and/or commitments encumbrances incurred prior to receipt of funds in the Contract Modification (Mod)through the AFP contract modification.
      3. Costs and/or commitments encumbrances incurred for activities outside of the purpose specified in the DOE work authorization.
      4. Costs and/or commitments encumbrances incurred after the expiration of limited-appropriation funds.
   2. Sponsored Research Work for Others (WFO)
      1. Costs incurred prior to the receipt of an accepted reimbursable work agreement . A (i.e.., a written agreement to perform work or provide a service for another federal agency or non-federal , DOE Integrated Contractor or nonfederal sponsor, signed by a contracting officer or an authorized business official with delegated authority to commit the Laboratory Berkeley Lab to perform WFOsponsored research, and approved by an authorized approver of the sponsor).
      2. Costs incurred prior to receipt of DOE Approvalapproval.
      3. Costs incurred outside the reimbursable work agreement period of performance.
      4. Costs incurred after the expiration of limited-appropriation funds, if applicable, on work for non-DOE federal sponsors.
      5. Costs incurred outside of the reimbursable work agreement terms (Statement statement of Workwork). Activities must be allowable and allocable.
      6. Costs incurred in excess of funding.
         1. For a federal reimbursable work agreement and DOE inter-entity work agreement, "funding" is defined as the contract value.
         2. For a non-federal nonfederal reimbursable work agreement, "funding" is defined as cash received (advance payments + invoice payments), plus approved bridge funding.
            Financial
            1. 1. The financial terms of a reimbursable work agreement are not met by the sponsor.
               Delinquent
               1. The delinquent payment of invoices (generally invoices outstanding for 120 days or more).
               Sponsor
               1. The sponsor refuses to reimburse the Laboratory
   3. Other nonfinancial factors may result in the requirement to Stop Work
   4. 1. 1. 1. 1. .
      2. The violations described above could result in uncollectible or unallowable costs for Berkeley Lab. Accordingly, it is important to monitor funds to prevent these types of issues from occurring.
   5. Responsibility for Monitoring Costs
      1. The Principal Investigator/Project Manager (PI/PM) has the primary responsibility to ensure that project costs are managed so that costs and encumbrances do not exceed funds available for the project.
      2. The Resource Analyst matrixed to the division is responsible for providing data that enable the PI/PM to effectively monitor the costs/encumbrances on the project.
      3. The area/division leadership is responsible for assuring funds control processes are in place and being followed. The area/division leadership may assign responsibilities for providing support to the PI/PM in monitoring costs and assuring funds control to its business managers or operations deputies.
      4. The PI/PM and RA should collaborate to monitor costs and encumbrances on an ongoing basis to identify projects that are at risk of exceeding available funding in a timely manner. Monitoring should take into consideration the availability of funds for the next 90 days in comparison with the timing of costs/encumbrances, including long lead material and future travel costs.
      5. If there is the risk of a funds control violation within 90 days, the division should initiate contact and work with its designated Finance Manager to take mitigating actions.
   6. Process for Initiating Stop Work for Funds Control Compliance
      1. The Stop Work process is initiated only after all other appropriate mitigating actions have been taken to prevent a funds control violation. The stop work process can be found here.
      2. Initial Notification
         1. A potential funds-control violation may be identified by
         a division resource analyst, business manager, accounts receivable manager, Office of Sponsored Projects and Industry Partnerships (OSPIP) Contracts Officer, manager, Budget Office analyst, etc.
         1. any individual with a project management or fiduciary responsibility, and may result in the initiation of a
         Stop Work process (refer to
         1. Stop Work
         Process Flowchart)
         1. .
         2. If a potential funds-control violation is identified, the identifier must notify the
         following individuals via e-mail:

         POSITION	NOTIFICATION
         Field Operations Manager	Mandatory
         Division Resource Analyst	Mandatory
         Budget Office Analyst	Mandatory
         Business Manager	Mandatory
         Division Director/Deputy Director	Division discretion
         Principal Investigator (PI)	Division discretion
         OSPIP Contracts Officer	If applicable
         Accounts Receivable Manager	If applicable
         Budget Officer	Field operations manager discretion

         The Chief Financial Officer (CFO) has the option of declaring a temporary Stop Work at any time during this process
         1. designated Finance Manager for the area via email.
      3. Determination

         1. The

         field operations manager

         1. designated Finance Manager establishes and facilitates a fact-finding team

         within two business days of receipt of notification

         1. in order to gather details and explore whether other funding sources are available and appropriate.

         The team should include those individuals noted as mandatory under the initial notification section, and others as appropriate. Based on the team's findings, a recommendation is made.If the team determines that

         2. The RA and designated Sr. Field Finance Manager will summarize the issue and recommendation, regardless of whether a Stop Work course of action is

         unnecessary, the division resource analyst and field operations manager must still complete a Stop Work Initiation Form, summarizing the issue and the team's recommendation. The completed form is distributed by the field operations manager to the team for informational purposes.
      4. If the team recommends a Stop Work course of action, the division resource analyst and field operations manager complete the Stop Work Initiation Form, summarizing the team's recommendation and outlining the funding alternatives that were explored but determined not to be viable options. The Budget Office reviews the completed form.
      5. The field operations manager distributes the completed form simultaneously to the division's business manager and to the Budget Officer. The business manager reviews the Stop Work recommendation with the division director and notifies the Budget Officer if there are additional concerns prior to the CFO review. The Budget Officer reviews the recommendation with the CFO for final determination.
      6. Given the severity of a Stop Work situation, the determination process should be completed expeditiously.
   7. Stop Work Notification
      1. If a Stop Work is the recommended course of action, the CFO reviews the issues with the division director, or designee. The division director is responsible for implementing the Stop Work. The Stop Work status is in effect until the funds-control violation is resolved.
      2. Once the division director concurs with the Stop Work recommendation, the sponsor will be notified. The OSPIP officer will handle the formal sponsor notification for WFO, and the division director for DOE direct-funded projects.
   8. Resource Allocation
      1. Since activities on the project at issue must cease, principal investigators and staff effort must be redirected to other appropriate activity such as work on other projects or employee-between-assignment activity funded through Organization Burden.
      2. It is inappropriate to charge Research and Development costs to Organization Burden (see Organization Burden Policy). If alternatives are unavailable, the division must pursue appropriate alternatives with Human Resources (e.g., administrative leave, termination, etc.).
      3. In cases of abrupt funding termination, the division may seek non-Contract 31 funds (e.g., Fee or Gifts).

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   E. Roles and Responsibilities

   1. 1. 1. necessary. 

      2. Stop Work Notification
         1. If warranted by the severity of risk, the CFO and/or Budget Officer have the authority to unilaterally stop or suspend work. They can exercise this authority (at their discretion) to mitigate risk to the Laboratory while supporting its scientific mission.
         2. Refer to the Stop Work Process document for process related details

   E. Roles and Responsibilities

   Role	Responsibility
   Principal Investigator/Project Manager (PI/PM)	Monitors costs on assigned projects to ensure funds control compliance. Works with their designated Resource Analyst and Finance Manager to take mitigating actions to prevent funds control violations. When a Stop Work order is implemented, redirects PI/PM and staff effort to appropriate activities as necessary.
   Resource Analyst (RA) (matrixed to the division)	Provides financial support, knowledge, and expertise to the PI/PM. Assists in identifying mitigating actions to prevent funds control violations. When a potential funds control issue is identified, participates in the fact-finding team. In coordination with the designated Finance Manager, drafts the findings from the investigation and team recommendations.
   Stop Work Initiator	Any individual with a fiduciary responsibility, including, but not limited to, Division Director, Senior Business Manager, Business Manager, Deputy, Deputy of Operations for Division or Area ("Area/Division Personnel"), and OCFO personnel. Initiates and notifies both the designated Finance Manager and the Area/Division Personnel of potential funds control violations as outlined in policy. Participates in the fact-finding team.
   Designated Finance Manager	Notifies the appropriate parties of a potential Stop Work. Establishes and facilitates the fact-finding team. In coordination with the Resource Analyst (RA), drafts the findings from the investigation, including team recommendations. Represents the OCFO in recommended path forward.
   Budget Office Manager	Participates in the fact-finding team. In coordination with the Budget Officer, reviews recommendations.
   SPO