Accruals

Title:	Accruals
Publication date:	9/4/2020
Effective date:	9/4/2020

BRIEF

Policy Summary

This policy describes the requirements for accounting for liabilities at Lawrence Berkeley National Laboratory (Berkeley Lab) to ensure adherence to DOE liability accounting requirements.

Who Should Read This Policy

This policy applies to all employees who establish, monitor, or report on liabilities at Berkeley Lab.

To Read the Full Policy, Go To:

The POLICY tab on this wiki page

Contact Information

General Accounting Manager

Title:	Accruals
Publication date:	9/4/2020
Effective date:	9/4/2020

POLICY

A. Purpose

This policy describes the requirements for accounting for liabilities at Lawrence Berkeley National Laboratory (Berkeley Lab) to ensure adherence to DOE liability accounting requirements.

B. Persons Affected

This policy applies to all employees who establish, monitor, or report on liabilities at Berkeley Lab.

C. Exceptions

Not applicable

D. Policy Statement

Berkeley Lab accounts for 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, procurements, and travel 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 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:

Accrual Category	Description	Frequency	Performed by
Division Accrual	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 payroll	Month end	System generated
Receipt Accrual	Goods procured through Berkeley Lab's procurement channels when the good has been received during the fiscal period, through the Laboratory's Receiving Department	Month end	Controller's Office staff
Service Accrual	Services procured through Berkeley Lab's procurement channels when the service has been performed during the fiscal period, subject to materiality considerations	Month end	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 during the fiscal period	Year-end	Controller's Office staff
Unposted Voucher Accrual	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	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 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).
Division accruals are predominantly a year-end activity except in the following instances:

All accrual transactions must have appropriate supporting documentation.
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 Responsibilities

Role	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: Accrual Preparer/Resource analyst	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: Accrual Approver	Ensures that the accrual meets policy criteria prior to approval. Approves transactions in a timely manner.
Controller's Office/Disbursements Accounting	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.

F. Definitions/Acronyms

Term	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) has not been received / vouched 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)
Project/Activity	An identification number used to accumulate, manage, and report costs associated with individually funded activities at Berkeley Lab

G. Recordkeeping Requirements

None

H. Implementing Documents

None

I. Contact Information