Accounting

Introduction/Background

Performance Objective 1:     Internal Controls /Audit

The Laboratory provides for effective Internal Controls and Audit Findings Follow‑up. (Total Weight: 25%)

Performance Criterion 1.1:     Internal Control and Audit Findings

Provide for effective internal controls; ensure timely and effective audit resolution, and/or follow‑up on external and internal review group findings of a financial nature.

Performance Measure 1.1.a:     Internal Control and Audit Findings

The Laboratory will provide for effective internal controls; develop and implement a tracking system to effectively monitor audit findings and/or recommendations to ensure timely resolution or appropriate corrective action is accomplished; and ensures timely and effective audit resolution, and/or follow‑up on external and internal review group findings of a financial nature.  Any financial findings are prioritized to achieve timely resolution within the metric guidelines.  (Weight: 15%)

Performance Gradient:

Outstanding:   96% ‑100% of all events are resolved on schedule.

Excellent: 86‑95% of all events are resolved on schedule.

Good: 75%‑85% of all events are resolved on schedule.

Marginal:  50%-74% of all events are resolved on schedule.

Unsatisfactory: Less than 50% of all events are resolved on schedule.

A.        Stanford University Internal Audit Review of SLAC Purchasing Controls

A.1.     Davis-Bacon Act Review

In May of 2005, an audit was conducted by the Stanford University Internal Audit Department.  The primary objective of the audit was to evaluate SLAC’s Internal Procedures on the review and approval of invoices from Subcontractor who are subject to the Davis-Bacon Act.

There were two recommendations issued as a result of this audit.  They are as follows:

A.1.1.  Recommendation

The Purchasing Officer and Deputy Purchasing Officer should update Section 42-1 of the Business Services Division (BSD) Procedure Manual.

Corrective Action

SLAC Purchasing Management is in the process of updating all related procedures. 

Target Completion Date: December 2005

A.1.2   Recommendation

The Purchasing Officer and Deputy Purchasing Officer should ensure that the Contract Administrators are reminded of their responsibility to adhere to the Purchasing Office’s internal procedures for the review and approval of subcontractor invoices that are subject to the Davis-Bacon Act.

Corrective Action

SLAC Purchasing Management concurs with this recommendation.  The Deputy Purchasing Officer held a meeting on May 9, 2005 with the Construction Contract Administrators and reminded them of their responsibility to follow the Business Services Procedures concerning the review and approval of subcontractor invoices subject to the Davis-Bacon Act.

A.2.     Agreed upon procedures performed a SLAC for FY2004 are in accordance with OMB Circular A-133

                  No Recommendations:  Based upon Stanford University Internal Audit’s understanding and documentation of the internal control systems, and the results of testing procedures performed, SLAC had complied with all OMB Circular A-133 regulations in all material respect.

A.3.     Audit of Allowable Cost for FY2004

Stanford University Internal Audit found two immaterial audit findings in the FY 2004 Allowable Costs Review conducted by SU Internal Audit.  SLAC has already taken action in response to those findings.

A.3.1

Four of the thirty selected purchase card transactions were not compliant with SLAC’s purchase card internal policies and procedures.

Recommendation 

The Purchase Card Administrator needs to remind the Approving Officials of proper review and approval of credit card transactions and the Cardholders of SLAC’s Purchase Card guidelines.

Corrective Action  

Purchasing has re-instructed all the offending cardholders and will address the issues with all cardholders and approving officials during the annual mandatory retraining in July 2005.

A.3.2

One of employees listed on the Negative Leave Balances Report 10/31/04 had a negative balance of Personal Time Off (PTO) carried forward to the following calendar year. The negative leave balance was cleared in January 2005.

Recommendation:  

The Payroll Manager should review the Negative Leave Balances report and ensure that the employees only to be allowed to the maximum hours of PTO in the calendar year. 

Corrective Action 

The Payroll Manager will ensure that employees are only allowed the maximum number of PTO for each calendar year.

All findings were resolved and completed on-time. 

All events have or are in the process of being resolved prior to the scheduled due date.  Performance rating for this measure is “Outstanding”.

Performance Measure 1.1b: Policies and Procedures

SLAC has policies and procedures in place to ensure SLAC’s accounting practices and processes are fully compliant with the approved Cost Accounting Standards (CAS), Generally Accepted Government Auditing Standards (GAGAS), and DOE requirements.  SLAC submitted its CAS Disclosure Statement to DOE in 2001.  The Disclosure Statement still reflects current SLAC cost accounting  

Performance Objective 4:  Financial Management

Performance Criterion 4.1:  Financial Statement Standards Compliance

SLAC has comprehensive internal controls to ensure data integrity and financial reports that comply with the approved CAS Disclosure Statement and DOE requirements.  This is verified by the audit of SLAC’s Statement of Costs Incurred and Claimed (SCIC) and annual Allowable Costs Review conducted by the DOE Office of Inspector General (OIG) and Stanford University Internal Audit (IA).  The audits confirmed that all costs are accurate.

The DOE –IG Audit in 2004 of SLAC’s SCIC for FY1999 through FY2003 had no findings with regard to SLAC’s accounting policies, procedures, practices, and processes. No DOE-IG Audit was performed during FY2005.

Performance Measure 4.1.a:  Financial Reporting

SLAC’s costs are recorded accurately.  All financial reports were prepared in accordance with DOE requirements and submitted timely.  Please refer to the attached table.

The DOE Standard Accounting and Reporting System (STARS) went live in April 2005.  The STARS allows integrated contractors to upload to STARS in the “Validate Mode” early and as many times as needed before uploading the file in the “Real Mode”.  SLAC has been uploading the STARS file on the first work day of each month to allow more time to resolve any combination edit errors if needed. 

1. The April and May STARS files were uploaded after the second work day due to the following system problems at HQ: 

2. Contract Mod for April and May was entered in STARS on the fourth work day;
3. wrong conversion for year-to-date payments from Reimbursable Works;
4. the incorrect year-to-date prevented SLAC from reporting costs for WFO;
5. and problems with receiving STARS output directly without going through DOE-CH. interface.

SLAC will provide a narrative description of its CAS financial management practices and processes to support this criterion for effective and efficient indirect cost management.

The Laboratory will continually monitor and evaluate the indirect rate cost policies, data collection systems, basis, applications and reports, making appropriate changes where necessary.

Monitoring and evaluating the Indirect Cost is an ongoing process conducted throughout the year.  The indirect rates remain unchanged through FY2005.  Assuming that funding is at the level of the FY2006 President’s Budget for SLAC, the indirect rates is expected to remain the same in FY2006.  After the FY2006 E&WD Appropriations Bill is passed and the Laboratory’s budget is better known, analyses will be performed to determine if changes to the indirect rates are necessary.