Title: | Accruals | Publication date: | 94/414/20202023 | Effective date: | 94/414/20202023 |
POLICYA. PurposeThis policy describes the requirements for accounting for accrued liabilities at Lawrence Berkeley National Laboratory (Berkeley Lab) to ensure adherence to DOE liability accounting requirements. B. Persons AffectedThis policy applies to all employees who establish, monitor, or report on liabilities expenses to be accrued for goods and services received at Berkeley Lab. C. ExceptionsNot applicable D. Policy StatementBerkeley Lab accounts for accrued liabilities in compliance with the DOE Management Handbook, Chapter 11. An accrual is an accounting transaction to record costs in Berkeley Lab's financial management system for labor, procurementsacquisitions, and travel, construction in progress where the benefit is received (goods received, services performed) during the current fiscal period, prior to payment being made or the certification of an invoice. Accruals ensure that costs are recorded in the period in which the costs are incurred.
From a funds control perspective, Berkeley Lab has a comprehensive system that provides division personnel with information on project funds, costs, encumbrances, and pre-encumbrances. Division focus on both uncosted and unencumbered balances decreases the need for certain but for which an invoice has not been received / processed in the system. Types of Accruals monthly accruals as unaccrued costs related to goods received or services performed are included in encumbrance balances. The following table lists the primary categories of accruals and the related frequency: Initiated by the Resource Analyst and processed by Controller’s Office staff Accrual Category | Description | Frequency | Performed by |
Division Procurement- or travel-related accruals not captured in the unposted Accounts Payable (A/P) accrual, receipt accrual, or travel accrual, subject to materiality considerations | Year-end, although monthly accruals can be made when certain conditions are met (see below) | Initiated by the Resource Analyst and processed by Controller's Office staff | Payroll Accrual | Costs related to bi-weekly and monthly Costs related to labor for the number of days between last pay date and end of the month | Month end | System generated | Receipt Accrual | Goods procured through Berkeley Lab's acquisition channels when goods have been received during the fiscal period, and related invoices have not been received nor processed |
payroll | Month end | System generated |
Receipt Unposted Voucher Accrual | Goods and services procured through Berkeley Lab's |
procurement acquisition channels when |
the good has been received invoice(s) for goods/services has/have been received and entered into Berkeley Lab's Accounts Payable system during the fiscal period |
, through the Laboratory's Receiving Departmentbut have not been posted (i.e., invoices to be certified, invoices in match exception) | Month end | Controller's Office staff |
Service Division Accrual-Services | Services procured through Berkeley Lab's |
procurement acquisition channels when |
the service has services have been performed during the fiscal period, and related vendor invoices have not been received nor processed, subject to materiality considerations | Month end | Resource Analyst | Division Accrual-Goods and/or accrual adjustments | Goods procured through Berkeley Lab’s acquisition channels when goods have been received during the fiscal period and related vendor invoices have not been received after the receiving cut off (especially during the year end close) and related vendor invoices have not been received nor processed | Year-end, although monthly accruals can be made when certain conditions are met (see below) | Initiated by the Resource Analyst and processed by Controller's Office staff | | Travel Accrual | Outstanding airfare for reservations placed through the corporate travel agent and related lodging and meals (per diem) for travel completed during the fiscal period | Year-end | Controller's Office staff |
Unposted Voucher Goods and services procured through Berkeley Lab's procurement channels when the invoice for the good/service has been received and scanned into Berkeley Lab's Accounts Payable system during the fiscal period but has not been paid (i.e., not certified) | Month end | | -Others | Accruals not covered under any of the categories listed (e.g. pending expense reimbursements, tuition costs), subject to materiality thresholds | Year-end, although monthly accruals can be made when certain conditions are met (see below) | Initiated by the Resource Analyst and processed by Controller's Office staff |
Note: Terms of "year-end" and "month end" refer to the fiscal-period end, not the calendar-month end.Service and All categories of division accruals are subject to materiality considerations. A transaction is considered material if there is substantial likelihood that omission of the accrual would affect or influence financial management decisions (e.g., to encumber additional funds).
understatement of costs) Other Division accruals are predominantly a year-end activity except in the following Strategic Partnership Projects (SPP) instances: Image Removed
All accrual - The period of performance is expiring, or
- An award related to a SPP Project that includes limitations on costs by fiscal year and cost element (e.g., limitation on travel costs to those only incurred before a specific date).
Documentation Requirements Accrual transactions must have appropriate supporting documentation. Note: Automated system accruals such as bi-weekly labor and receipt accruals are supported by system transactions. For division and service accruals, documentation will include: - A detail of the amount accrued.
- An explanation of how the amount was determined.
- Identification of who provided information for the accrual.
- Supplier documentation, if available.
- Proper approval by an individual with designated financial approver authority (resource adjustment/accrual approval authority).
Division and service accrual supporting documentation will be stored in a central repository (e.g., a shared drive, such as Google Drive) based on direction from Field Operations management. E. Roles and ResponsibilitiesRole | Responsibility | Division: Individual Requesting Accrual | - Once the need for an accrual is identified, makes a timely request to the Resource Analyst to initiate an accrual transaction.
| Field Operations: OCFO Accrual Preparer / Resource analystAnalyst | - Is knowledgeable about accrual requirements and policy and is proficient in using Berkeley Lab tools to process accrual transactions.
- Through the cost review and analysis process, identifies needed, material accruals.
- Ensures that accruals meet Accrual policy guidelines for preparation and documentation.
| Division/Field Operations: OCFO Accrual Approver | - Ensures that the accrual meets policy criteria prior to approval.
- Approves transactions in a timely manner.
| Controller's Office /Disbursements AccountingStaff | - Ensures Berkeley Lab's financial policies are up to date and comply with DOE Financial Management Handbook requirements and generally accepted accounting principles, making modifications as appropriate.
- Primarily responsible for financial statement reporting, with inputs from divisions as needed.
- Processes accruals as identified in the table shown in Section D above.
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F. Definitions/AcronymsTerm | Definition | Accrual | Amounts owed for items or services received, expenses incurred, assets acquired, or construction performed, for which a bill (e.g., progress billings, grant reimbursement requests, and other billings) An accrual is an accounting transaction to record costs in Berkeley Lab's financial management system for labor, acquisitions, travel, and construction in progress where the benefit is received (goods received, services performed) during the current fiscal period, for which an invoice, for example, has not been received / vouched processed in the system | Encumbrance | An amount (full cost) for which there is a legal obligation to spend in the future | Liability | A present obligation arising from past events that will result in future transfer of assets (cash) | . | Liability | A probable future outflow or other sacrifice of resources as a result of past transactions or events. | ProjectProject/Activity | An identification number used to at the Berkeley Lab to manage a scope of work, accumulate, manage, track and report costs associated with individually funded activities at Berkeley Labfunding and costs. |
G. Recordkeeping RequirementsNone H. Implementing DocumentsNone General Accounting Manager J. Revision HistoryDate | Revision | By Whom | Revision Description | Section(s) Affected | Change Type | 1/2/2012 | 1 | M. Mock | Re-format for wiki | All | Minor | 2/10/2015 | 1.1 | J. Wick | Minor clarifications of policy | All | Minor | 5/8/2015 | 1.2 | J. Wick | Minor clarification; remove quarterly travel accrual for consistency | D.2.2 | Minor | 9/22/16 | 1.3 | M. Beedle | Minor clarifications of policy | All | Minor | 9/4/2020 | 1.4 | M. Beedle | Periodic Review; review: minor edits | All | Minor | | 4/14/2023 | 1.5 | M. Beedle | Periodic review: minor clarification to the policy language and updates to R&Rs | All | Minor |
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