Finance/Accounting

Introduction/Background

Date of last assessment: October 2000

Departmental Overview 

Laboratory Mission

The Stanford Linear Accelerator Center (SLAC) is dedicated to experimental and theoretical research in elementary particle physics and in those fields that make use of its synchrotron radiation facilities, including biology, chemistry, geology, material science and electrical engineering.  This includes the development of new techniques in particle acceleration and detection and of synchrotron radiation sources and associated instrumentation.  Stanford University operates the center as a national user facility for the Department of Energy.

 

Organizational Mission

SLAC Accounting is part of the Business Services Division Finance Office.       

The major responsibilities of the department are:

• General ledger maintenance and reconciliation and journal entry operations

• Work Order maintenance,

• FIS/MARS, other DOE and Stanford University  reporting,

• Cost reporting and cost data files,

• Accounts payable,

• Accounts receivable and collections and bank deposit operations and reconciliation,

• Payroll,

• Labor database maintenance,

• Property accounting,

• Bank operations,

• Contract labor data maintenance and payments,

• Stores accounting and stores file maintenance,

• Requisition and purchase order commitment maintenance; Shop rate and vehicle charge-out maintenance

• Travel accounting.

Identification of Self-Assessment Report Staff

Names, titles, affiliations of participants

Marty Sorensen, Accounting Officer

Introduction:

For Fiscal Year 2001, the major events of the year for SLAC Accounting were participation in   an Administrative Peer Review, and the responses to the turnover in Travel reimbursement office. 

Customer service surveys have shown that the Laboratory thinks very highly of our Payroll, Accounts Payable, and the Cost Accounting staff.

Based on the results of our surveys, and due to substantial turnover in   the Travel Reimbursement Office, we hired a new manager.  In addition,  we merged the Accounts Payable and Travel Reimbursement functions.  We were able to improve customer service with a great deal of effort spent on training. We also created many new web documents to improve Laboratory knowledge of documentation requirements, and DOE and Federal travel regulations. 

We have also created new online forms: including online domestic and foreign travel authorizations forms. For domestic travel, users are now able to use the online routing   approvals, eliminating paper completely.  They can also prepare their expense report online, saving a great deal of time. We have received excellent responses to these efforts. 

Commitment tracking has been greatly improved, with help from our programming staff. This provided better information at yearend to financial planners as well as accountants. 

Two-thirds of our three-person payroll staff is new this year, and training has produced results. 

Discussion of Individual Performance Objectives

Performance Objective #1: Effective and Efficient Cash Management 

Performance Measure 1.1.a: Reduce the amount of delinquent accounts receivable 90, 91-180, and over 180 days old.                                                             

Findings:

SLAC has performed in an outstanding manner in receivables.  No receivables are delinquent more than 180 days, The value of receivables more than 90 days old is less than 1% of the value of total receivables, and all eligible non-Federal receivables more than 180 days old have been referred to the Treasury.  

Performance Measure 1.2a: Revenues/collections are promptly collected, recorded and properly classified (i.e., sent to Treasury or deposited into the Payments Cleared Financing Arrangement Account). 

Findings:

SLAC’s performance was outstanding. 100% of collections were promptly and properly recorded and classified.  All collections are reviewed before final monthend posting, and a comparison is made between the daily mail posting of checks received and the data inputted into PeopleSoft Accounts Receivable.  We prepare our deposits to coincide with Loomis Fargo Armed Delivery services to make sure that collections are promptly deposited. 

Performance Objective # 3.    Effective Internal Controls and Audit Findings Follow-up. 

Performance Measure 3.1.a  : Financial findings are prioritized to achieve timely resolution within the metric guidelines. 

Stanford University Audit Group Reviews

Review of SLAC Purchase Cards (November 10, 2000)

The Internal Audit Group reviewed the internal controls implemented by SLAC for the purchase of good and services with the SLAC Purchase Card.  

Summarized herewith are the recommendations and corrective actions contained within the report. 

1.      Immediately follow-up on obtaining all refunds due from the bank. 

Recommendation:     

1.      The Accounting Office should immediately follow-up on obtaining the refunds for the period January through March 2000.

2.      The Accounting Officer together with the Purchasing Officer and the Card Administrator should review pertinent sections, including financial implication, in the GSA SmartPay Master Contract that would be applicable to SLAC, and develop a system to monitor/account for those transactions (refunds). 

Corrective Action:    

1. The refund from Bank of America for the first quarter of the Calendar Year 2000 was received and deposited to SLAC’s account on September 29, 2000.
2. The Accounting Officer, Purchasing Officer, and the Card Administrator have reviewed the contract.  The Accounting Office has developed a calendar-based reminder systems to monitor receipt of the refunds and will review the refunds when they are received. 

2.      Immediately consider electronically remitting payments to the bank which will increase Productivity Refunds and further reduce the costs of operating the Purchase Card program.  

Recommendation: The Accounting Officer should immediately consider electronically remitting payments to the bank. 

Corrective Action: The Accounting Officer stated that the September 27, 2000 invoices were received on October 5, 2000 and payment was made via wire transfer the next day.  In future, they will coordinate with Bank of America to process monthly payments electronically based on the downloaded “monthly transaction” file.  SLAC management does not think daily electronic payments are cost-effective at this time when all the costs, such as staffing costs for file manipulation, coordination and reconciliation, and bank wire charges, are factored in. 

3.      Immediately close the account owned by the identified terminated employee. 

Recommendation: The Card Administrator should immediately close the account owned by the identified terminated employee. 

Corrective Action: The Purchase Card account of the identified terminated employee was immediately.  The Purchase Card Administrator is now notified of all terminations.  Accounts belonging to terminating employees are deactivated as soon as the last day of employment has been communicated via Human Resources. 

4.      Immediately follow up on a credit (refund) for the sales tax payment. 

Recommendation: The Purchasing Officer and Card Administrator should immediately contact the vendor and follow up on a credit (refund) for the sales tax payment. 

Corrective Action: The cardholder did follow-up with the vendor and the sales tax was refunded on the statement for period ending August 27, 2000.  It is the responsibility of the cardholders and the approving officials to resolve issues of sales tax refunds.  The Purchasing Office and Card Administrator provide assistance when necessary. 

5.      Enforce Section 3.1 and 18.2 of the Purchase Card manual.

Recommendations: The Purchasing Officer and Card Administrator should enforce Section 3.1 and 18.2 of the Purchase Card manual. 

Corrective Action: The Card Administrator will remind cardholders and approving officials the procedures to follow when the approving officials is not available to approve the monthly statement.  The “annual audit” conducted under the supervision of the Purchasing Officer, will check for compliance with Approving Official’s sign off requirement.

The Accounting Officer and the Card Administrator have established a process to monitor the cardholder’s submittal of monthly statements and will take appropriate actions.  At the end of October 2000, the privileges of five cardholders were suspended because of missing statements.

Completed on 10/04/00, 12/06/00, and 5/03/01 via reminder email to all cardholders. 

6.      Review and appropriately revise the Purchase Log form.  

Recommendations:   

1. The Card Administrator and the Purchasing Officer should consider reviewing and appropriately revising the Purchase Log form to conform to the actual intent of SLAC management.

2. The Card Administrator should inform all cardholders of any changed made to the Purchase Log form.

Corrective Action:

1. The purchase log is being evaluated for re-design.
2. The Card Administrator will notify the cardholders regarding the revised purchase log form.

Pending completion. 

7.      Enforce the current requirement on receipts.  

Recommendations: The Purchasing Officer and the Card Administrator should enforce the current requirement on receipts stipulated in Section 18.3 of the manual. 

Corrective Action: Cardholders will be reminded of the requirement in Section 18.3.  Criteria for the annual audit of transactions does include checking for compliance with the requirement.

Completed on 12/06/00.  A follow-up reminder will be sent with the October 2001 closing notice to cardholders. 

Review of Alleged Improper Practices at SLAC (February 28, 2001)

No financial findings. 

SLAC Audit of Allowable Cost for FY2000 (April 12, 2001)

The objective of this audit were to review the system of internal controls and examine transactions to determine whether costs incurred during the period October 1, 1999, through September 30, 2000 were allowable under the terms of contract number DE-AC03-76SFO0515, Modification M339. 

1. Immediately determine the extent of erroneous vendor payments by reviewing prior payments made and obtain refunds from the vendor.  

Recommendation: The Accounting Officer and the Purchasing Officer should review prior payments made to the vendor to determine the extent of earlier errors, if any.  Based on the results of the review, they should obtain refunds from the vendor, if appropriate. 

Corrective Action: After review of prior payments, a letter was sent to the vendor notifying the vendor of the over charges.  The over charge amount was deducted from the vendor’s next invoice.

Completed on April 13, 2001 

DOE IG Fiscal 2000 Financial Statement Audit (7/2000, 10/2000, &11/2000)

No findings.  No subsequent reports was issued. 

Agreed Upon Procedures Performed at SLAC for FY2000 in Accordance with OMB Circular A-133

No findings.   

Performance Measure 3.1.b: Adequate internal controls are in place to ensure that travel costs reported are accurate, complete, and have supporting documentation. 

Findings: SLAC’s performance on Measure 3.1.b was outstanding. All our travel costs, without exception are accurate and satisfy DOE requirements. Each and every travel expense report reimbursed is supported by adequate documentation. We know this because there is 100% review of expense reports submitted by travelers to the Travel Reimbursement Office. 

As required by DOE, travel costs reported to DOE excluded travel performed under work-for-other agreements, travel of subcontractors, travel of users to participate in experiments at DOE user facilities, relocation costs or costs of travel management.  Travel costs reported are complete, accurate, and are identified through general ledger codes.  Supporting documentation was provided promptly to DOE Oakland whenever requested. 

GOAL#2: Effectiveness and Efficiency  

Performance Measures 1.1.a: DOE required accounting reports are provided by the due date and meet content requirements.  

Findings: SLAC has consistently delivered the reports on time without any need to change the information. Resubmits and extensions of time were not required. Our performance on this measure has been excellent.  

Performance Measures 1.2.a: FY 2000 audited financial statements are prepared in accordance with DOE requirements.  

Findings: SLAC’s financial statements for FY2000 were complete and accurate and supported by documentation. We continued our practice instituted last year of reviewing our PeopleSoft General Ledger Accounts and MARS Balance Sheet Accounts during July and August to be better prepared for yearend close and financial statement analysis. We have improved on the number and quality of reports in our Analytical Reporting Facility to get better information for review, and get it faster. SLAC’s performance on this measure was excellent.  

Performance Objective #2: Construction projects are closed and capitalized.  

Performance Measures 2.1.a: Construction projects are closed upon beneficial occupancy and capitalized in accordance with DOE requirements. 

Findings: A plan was developed for the closing and capitalizing of all projects. SLAC also improved on the process by shortening the time it takes to prepare the Work In Process documentation and making the data available on the Web in addition to spreadsheets.  Our performance was outstanding.  

Performance Objective #3.0: Effective and efficient indirect cost management  

Performance Measure 3.1.a: Using 1997 as a baseline, track and trend FY 1998 through FY 2001 indirect costs.  Demonstrate that the costs are efficiently managed.  

Process used to meet objectives/measures:  SLAC ensures efficient management of its indirect costs by treating them as “direct cost”.  Budgets for indirect functions are individually developed and justified and go through the same rigorous review and approval process as direct programmatic function budgets. 

Findings:  The Indirect Rate chart illustrates that SLAC’s operating indirect costs as a percent of the direct operating costs have steadily declined from the FY1996 benchmark of 35.3% to 26.2% in FY2001.  Although the actual dollars expended for operating indirect support in FY2001 are higher than the dollars expended in FY1996, the percentage decline in indirect costs as a percentage of operating costs demonstrates that SLAC has been able to effectively control its operating indirect costs such that they have not grown at the same rate as the operating direct costs. 

Indirect Rate

(Operating Indirect Cost as a Percent of Operating Direct Costs)

  $ x 1,000

Discussion:  The Departments charged with carrying out SLAC’s indirect functions must compete for funding along with the research programs and must justify their requests based on the services to be provided.  The budget is allocated based on an assessment of Laboratory mission priorities and goals.  All functional elements of the Laboratory are held accountable for their assigned budget.  The Laboratory’s indirect rate is derived from the indirect budgets rather than the budgets being derived from the indirect rate.  Over the last several years, as the direct programs have grown, the indirect functions at SLAC have been able to control their growth at a rate lower than that of the direct programs.  However, if, in the future, the direct programs shrink, the indirect programs will probably shrink at a slower rate resulting in an increase in the indirect rate. 

Performance Measure 3.1.b

Policies, data and reports consistent with Cost Accounting Standards (CAS) compliance and DOE requirements; financial practices are consistent with approved CAS Disclosure Statement.  

Process used to meet objectives/measures:  SLAC partnered with DOE Oakland in preparation of its first CAS Disclosure statement.  Advice and assistance were sought by SLAC from DOE/Oak from the initiation of the effort through completion.  A draft document was sent to DOE Oakland for comments and discussion.  Issues were resolved with DOE prior to SLAC’s submittal of the final CAS Disclosure Statement. 

Findings:  SLAC’s financial management practices and processes are fully compliant with CAS and DOE requirements.  SLAC demonstrates an excellent, reliable and systematic method of analyzing and assimilating data consistent with the approved Disclosure Statement.  Therefore, SLAC’s performance rating is outstanding.

Performance Measures 3.1.c:  SLAC prepares and submits the Functional Support Cost Report (FSC) in accordance with the DOE requirements. 

Process used to meet objectives/measures:  SLAC partnered with DOE Oakland to identify the appropriate categorization of cost for the FSC Report was prepared following the applicable guidelines and submission requirements. 

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For Questions or comments, Please contact Ziba Mahdavi, Last Updated 10/24/00