Introduction/Background
|
Contractor |
DOE Office |
|
|
The Stanford Linear Accelerator Center is the lead Department of Energy (DOE) laboratory for electron-based high energy physics. It is dedicated to research in elementary particle physics, accelerator physics and in allied fields that can make use of its synchrotron radiation facilities—including biology, chemistry, geology, materials science and environmental engineering. Operated on behalf of the DOE by Stanford University, SLAC is a national user facility serving universities, industry and other research institutions throughout the world. Its mission can be summarized as follows:
Perform world-class research in high energy physics, particle astrophysics and cosmology, and in the use of synchrotron radiation
Provide accelerators, detectors, instrumentation and support for national and international research programs in elementary particle physics and allied fields that use synchrotron radiation
Advance the art of accelerators and related devices through development of sources of high energy particles and synchrotron radiation, plus new techniques for their scientific utilization
Advance the critical technologies necessary to maintain its leadership and excellence in particle physics, accelerator physics, particle astrophysics and cosmology, and synchrotron radiation
Transfer practical knowledge and innovative technology to the private sector
Contribute to the education of the next generation of scientists and engineers, and to the scientific awareness of the public
Achieve and maintain excellence in matters of environmental concern and provide for the safety and health of its staff and the general public.
Marty Sorensen, Accounting Officer
Performance Objective: 1.0 Financial Stewardship
Performance Criterion: 1.1 Accounts receivable delinquencies are minimized.
There are no receivables outstanding more than 180 days. Out of a total receivables of $232,002, $1,093 are outstanding more than 90 days. This is less than one-half of one percent, which equates to a performance level of outstanding.
Performance Criterion: 1.2 Improvements are made to accounting processes.
SLAC Accounting made several major improvements in FY03. These include:
There has been a major improvement in SLAC’s reporting of financial data to Stanford University. Previously, this had been a time-consuming process due to the difference between Stanford University’s and DoE’s fiscal year ends. The fiscal year boundaries for Stanford University are September through August, whereas the DOE boundaries are one month later. SLAC accounting systems have been structured to correspond to the DOE’s fiscal year, not Stanford University’s.
A new report from the Budget Office and a new analytical reporting facility displaying costs by Stanford’s fiscal year enables Accounting to provide financial information to Stanford with greater efficiency. Having the new report and the new reporting facility saves Accounting a great deal of number crunching time and provides SLAC greater analytical capabilities.
A new DOE financial attribute database has been created. This new database includes reporting and accounting attributes such as B&R codes, customer identification, Stanford attributes, and MARS attributes, and it contains its own analytical reporting facility. This is similar to the first two items mentioned above, except that it is aligned to the DOE fiscal year. The new database consolidates information that had been contained in several databases. The Accounting Department used to have to create large spreadsheets to consolidate this information. With the new database, the Accounting Department saves time at month end and at yearend in preparing reports for analysis.
The Travel Reimbursement Office (TRO) created spreadsheets to track outstanding expense reports. This enables the TRO staff to make sure that SLAC is in compliance with federal travel regulations on approval of travel, to track travel which has been approved but not costed, and improves the TRO’s ability to ensure that travel costs are recorded in a timely fashion.
A new graph generated by the TRO tracks the TRO’s performance on their internal standards to ensure that the goals of the office are being met.
The combination of these improvements merits an "Outstanding" performance rating for this objective.
Effective Internal Controls and Audit Findings Follow-up. (Total Weight = 14%)
Performance Criterion: 3.1
Provide for effective internal controls and ensure timely and effective resolution and/or follow-up on external and internal review group findings of a financial nature.
Performance Measure: 3.1.a (Weight: 7%)
Financial findings are prioritized to achieve timely resolution within the metric guidelines.
Performance Assumption:
SLAC will partner with OAK in prioritizing finding to achieve maximum resolution response by SLAC. SLAC will produce reports showing the delta between labs scheduled resolution dates and the actual resolution dates.
Performance Gradient:
SLAC Audit of Allowable Costs for FY 2002
The objective of this audit, done on March 31, 2003, was to review the system of internal controls and examine transaction to determine whether costs incurred during the period October 1, 2001, through September 30, 2002, were allowable under the term of the contract.
Recommendations:
Immediately remove the overcharge for employee relations programs from contract cost.
The total number of employees used for calculating the budget for SLAC employee relations program in FY02 was 1,530. However, it was noted that the total included 67 casual employees who were not benefit-eligible.
Resolution:
The budget for the Employee Relations Program for FY03 was revised. The new budget was based on the number of SLAC regular employees and graduate students, and did not include hourly employees. There were 1,539 employees as of September 30, 2002, based on the number provided by HR.
Completed as of April, 15 2003.
Review of SLAC Food Services Contract Performed by Stanford University Internal Audit Department
SLAC’s Associate Director and Purchasing Officer requested that Stanford University’s Office of Internal Audit perform a review of SLAC’s food services contract awarded to Guckenheimer Enterprise, Inc. The objective of this review was to determine whether financial agreements were being complied with in accordance with the terms of the contract, and to decide if Guckenheimer’s reported profits and losses being paid by a SLAC subsidy, were reasonable and accurately reported. The audit concentrated on four (4) months, September and October of 2002, and January and February of 2003.
The results of the audit determined that Guckenheimer was in compliance with the financial agreements required by the terms of the subcontract. Concerning the accuracy of Guckenheimer’s profit and loss statements for the four (4) months solicited, no exceptions were found when tracing the amounts of cafeteria sales to cash register tapes and the vending commissions to North County Vending schedules. Original invoices for all procured expenses and amounts were in agreement. Payroll expenses were traced to timecards and recalculated without any findings. In her review, the Auditor was also able to recalculate Guckenheimer expenses based on a certain percentage of net sales. A copy of this report is available upon request.
Observations and Recommendations
Recommendations
Provide the Contract Administrators training in administering contract requirements and in exercising diligence in managing contracts
Resolution
During FY03, Purchasing Management established a more robust training program for the Buyers and Contract Administrators. All attended the course as identified in Section 5 entitled "Training" of this report. Management intends to continue this trend for FY 04 with specific concentration on Government Contracting principles and processes. In addition, the Contract Administrator, who was assigned the task of soliciting the new cafeteria contract to the Eurest Corporation, received training in cost allowability as well as other contracting principles and processes.
Completed as of: Completed as of August 30, 2003.
Obtain explanation from Guckenheimer regarding Area Manager’s vacation charges before final payment
Resolution
The assigned Contract Administrator, Purchasing Officer and Stanford University Internal Auditor met with representatives from Guckenheimer on July 30, 2003 to discuss the vacation charges. Resolution was reached with Guckenheimer on the charges to be included in the final payment on September 25, 2003.
Completed as of: September 25, 2003
Reconcile the aging schedule of accounts receivable from Guckenheimer with SLAC’s accounting records.
Resolution
Aging accounts for both the cafeteria operations as well as catering services were reconciled on the dates identified below.
Completed as of:
Catering Services Invoices: July 30, 2003
Cafeteria Operations Invoices: September 25, 2003
Review of Receiving, Stores, and Inventory Control Operations**
This analysis was performed during the months of January and February of 2003 by an independent consultant, who recently retired from Lockheed-Martin as the Manager of Stores, Inventory and Receiving Department. The purpose of this assessment was to evaluate the activities currently being performed within the SLAC Material Management system and recommended functions where improvements could be made. Specifically, the areas of concern were Receiving, General Stores, Metal Stores, Air/Gas Activities, and Inventory Control. Both general and specific recommendations were provided by Mr. Harrington in his report. A copy of this report is available upon request.
General RecommendationsOutsourcing. Material/Support activities are very viable areas for outsourcing. There are numerous suppliers of general labor and products that can provide service and supplies more efficiently and cost effectively than performing these functions internally. The report recommends that periodically these processes should be evaluated for outsourcing in order to ensure that the required program support is being accomplished in the most cost effective and efficient manner. Specific candidates for outsourcing are Metal Stores, Air/Gas products, and portions of General Stores.
Electronic Ordering. SLAC should pursue the implementation of electronic ordering throughout the Purchasing and Materials activities as it would be more efficient, minimize errors, provide a history and eliminate redundancy.
Direct deliveries should be made in order to save space, time, and cost.
The absence of the Associate Purchasing Officer needs attention by Management
Continue with the outsourcing of items carried by Grainger and Corporate Express
Purchasing needs to evaluate other commodities in stores for their potential for outsourcing
Evaluation of spares should be done by item to ensure there is a continued need and to validate that the spares are not identified on the active inventory list
Decentralized spares in order to organize who ordered the material and to claim ownership
Establish a Blanket Purchasing Agreement with one metals supplier
Order metal pre-cut to required size directly from the Supplier
Outsource Metal Stores to an outside Supplier
Evaluate retention of metal stock
Set up a process of using an electronic form only in order to simplify the ordering process and for more accurate record keeping
Evaluate totally outsourcing Stores bottled gas. This would eliminate the double handling of bottles, reduce labor in Material, and make space available that is currently being used for the storage of bottled gasses for other uses.
Continue to work on increasing physical security in and around the Stores area.
In order to improve effectiveness, increase the amount of training employees receive concerning the receipt, control, disbursement, and record keeping of items in stores
Accomplish more frequent physical inventories of Stores to discover "root cause" and to take quick corrective action.
Resolution
The recommendations outlined in this report are currently being considered for implementation by the Purchasing Officer who will decide by December 31, 2003 which recommendations will be pursued during Fiscal Year 2004.
IG Audit of Sensitive Property at Selected Locations **
The objective of this audit, done on February 18-20, 2003, was the SLAC management of sensitive equipment, how improvements in property management controls would provide a deterrent to misuse, theft or other diversion of sensitive Government property.
Draft Audit Report was published April 1, 2003 -- grouped all three labs in report, but called out specific cases at certain labs. SLAC Comments on Draft Report sent April 9, 2003.
Recommendations:
Generally the report showed that virtually all sensitive items were located, but that various labs had difficulty at times locating them for various reasons: inadequate tracking systems, tracking system not showing current custodian, some items not marked properly with inventory tag, lab-fabricated items not routinely tagged . They also found that there was a wide variation in just what each laboratory chose to track (eg. dollar thresholds for getting into the tracking system, types of lower-value/high sensitivity items considered appropriate for tracking).
**Note: The resolutions for these audits have not yet been completed. Therefore, there are no corrective actions or corrective action dates established.
SLAC FY 2003 Audit Timeline |
|||
Audit |
Target Date |
Completion Date |
∆ |
| SLAC Audit of Allowable Costs | April 2003 | April 15, 2003 |
0 |
| Review of SLAC Food Services | |||
|
Sept. 2003 | August 30, 2003 |
0 |
|
Sept. 2003
|
Sept. 25, 2003 |
0 |
|
Sept. 2003 |
||
|
July 30, 2003 |
0 |
|
|
Sept. 25, 2003 |
0 |
|
Based on the following this measure rates "Outstanding":
Performance Measure: 3.1.b
Adequate internal controls are in place to ensure that travel costs reported are accurate, complete, and have supporting documentation.
Performance Assumption:
SLAC will partner with OAK in addressing issues related to travel costs to meet DOE requirements. When requested by OAK, SLAC will provide documentation showing total travel costs of SLAC employees. Travel costs exclude 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 centers.
SLAC’s performance on Measure 3.1.b was "Outstanding". All our travel costs are accurate and satisfy DOE requirements. Each and every travel expense report reimbursed is supported by adequate documentation. 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.
Effectiveness and Efficiency: Achieve cost effective and efficient Financial Management operations by applying available resources to continuous improvement efforts.
Performance Objective #1: Timely and Accurate data recording
Financial data is recorded and reported consistently, accurately, and timely.
SLAC’s performance has been "Outstanding". All reporting to the DOE has been consistently on time and accurate.
FY2002 audited financial statements are prepared in accordance with DOE requirements.
In 2002, all SLAC financial statements were prepared in accordance with DOE requirements. In addition, SLAC has continued to use the SLAC documents public directory, for all accounting reports, both quarterly and annually, to the DOE and Stanford University. This continues to give SLAC a basis to compare annual financial statements to make sure all requirements are being met. SLAC analyzed inventory in preparation for FY02 yearend. In addition, each month SLAC reviewed the Accounts Receivable balances, so that there were no surprises at yearend 2002. Because of this preparation and analysis, and the fact that there have been no audit findings relative to SLAC’s financial statements, performance has been "Outstanding".
Performance Objective #2: Construction Projects
2.1 Construction projects are capitalized in accordance with DOE requirements.
SLAC’s performance on construction projects was "Outstanding". All construction projects were capitalized according to beneficial use, and other DOE requirements. Last year, Accounting, the Budget Office, and Property Control instituted a new procedure. The procedure involved setting up a coordinating meeting, with a place on the annual closing schedule, to review all activities related to capitalizing construction projects. This review, as an addition to the yearend closing process, improved the communication among the participants in the capitalization process. In effect, extensive, constant communication has resulted in outstanding management of the budget and accounting aspects of construction projects. Staff of the SLAC Budget Office and Accounting Office have done an outstanding job of watching projects as they unfold and keeping SLAC’s commitment to meeting this objective.
Performance Measure 3.1.a: 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 to develop a CAS Disclosure Statement that was fully satisfactory to Oakland and comprehensive in describing SLAC cost accounting practices. SLAC has procedures and process in place to ensure that the assimilation and analysis of its financial data is consistent with the approved CAS Disclosure Statement.
SLAC’s financial management practices and process are fully compliant with its approved CAS Disclosure Statement and DOE requirements. This is verified by the review conducted by DOE/OAK-BEPD on user charges for proprietary research. The review confirmed that the indirect cost allocation practices used by SLAC are in compliance with the CAS and DOE requirements. This equates to a performance rating of "Outstanding".
Performance Measure 3.1.b: SLAC prepares and submits the Functional Support Cost Report (FSC) in accordance with DOE requirements.
Process used to meet objectives/measures: SLAC partnered with DOE Oakland to identify the appropriate categorization of costs for the FSC Report. The FSC Report was prepared following the applicable guidelines and submission requirements.
SLAC submitted its FSC Report on time and in accordance with DOE guidelines. It was complete and accurate with adequate supporting documentation. All issues were resolved with DOE Oakland prior to the formulation and submission of the FSC Report. This equates to a performance rating of "Outstanding.
