Title: | Accruals | Publication date: | 4/14/2023 | Effective date: | 4/14/2023 |
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 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, acquisitions, travel, construction in progress where the benefit is received (goods received, services performed) during the current fiscal period, but for which an invoice has not been received / processed in the system. Types of Accruals 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 | Labor Cost Accrual | 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 | Month end | System generated | Unposted Voucher Accrual | Goods and services procured through Berkeley Lab's acquisition channels when invoice(s) for goods/services has/have been received and entered into Berkeley Lab's Accounts Payable system during the fiscal period but have not been posted (i.e., invoices to be certified, invoices in match exception) | Month end | Controller's Office staff | Division Accrual-Services | Services procured through Berkeley Lab's acquisition channels when 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 | | Division Accrual-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. 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., understatement of costs) Other Division accruals are predominantly a year-end activity except in the following Strategic Partnership Projects (SPP) instances: - 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 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).
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.
| OCFO 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.
| OCFO Accrual Approver | - Ensures that the accrual meets policy criteria prior to approval.
- Approves transactions in a timely manner.
| Controller's Office Staff | - 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 | 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 / processed in the system. | Liability | A probable future outflow or other sacrifice of resources as a result of past transactions or events. | Project | An identification number used at the Berkeley Lab to manage a scope of work, accumulate, track and report funding and costs. |
G. Recordkeeping RequirementsNone H. Implementing DocumentsNone I. Contact InformationGeneral 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: 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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