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LBNL/PUB-922 (2005)Office of the Chief Financial OfficerFY2005 Annual Report

LBNL/PUB-922 (2005)Office of the Chief Financial OfficerFY 2005 Annual ReportErnest Orlando Lawrence Berkeley National LaboratoryUniversity of CaliforniaBerkeley, CaliforniaJanuary 2006This work was supported by the Director, Office of Science of the U.S. Department of Energy underContract No. DE-AC02-05CH11231.

Table of ContentsChief Financial Officer’s Statement . 1Laboratory Organizational Chart . 31. Office of the Chief Financial Officer OrganizationsOCFO Organization Chart . 4Controller’s Office . 6Budget Office . 8Procurement & Property Management Department . 10Sponsored Projects Office 12Field Operations Office .132. Institutional InformationFigure 2.1 Where Did Your Program Dollars Go in FY 2005 17Table 2.1 Cost Trend by Expense Category, FY 2001 – FY 2005 . 18Table 2.2 Cost by Direct Funding Source by Division, FY 2001 – FY 2005 .19Table 2.2a Cost by Direct Funding Source by Division, FY 2005 . 19Table 2.2b Cost by Direct Funding Source by Division, FY 2004 . 20Table 2.2c Cost by Direct Funding Source by Division, FY 2003 . 20Table 2.2d Cost by Direct Funding Source by Division, FY 2002 . 21Table 2.2e Cost by Direct Funding Source by Division, FY 2001 . 21Table 2.3 Indirect Budget Costs by Division, FY 2005 ( K) . 22Table 2.4 Average FTE Breakdown by Division, FY 2005 . 233. Direct Funding – DOE and Reimbursable WorkTable 3.1 LBNL Fund Trends (BA) by Funding Source ( K) . 29Table 3.2 LBNL Cost Trends by Funding Source ( K) 30Table 3.3 Laboratory Funding and Costs by Source ( K) 31Table 3.4 Administrator for National Nuclear Security Administration ( K) . 32Table 3.5 DOE Programs . 33Table 3.6 Reimbursable Work-for-Other Federal Agencies( K) .40Figure 3.1 Sponsored Projects Office Information . 414. Indirect BudgetsFigure 4.1 Indirect Budgets, FY 2005 ( M) .45Figure 4.2 Institutional Overhead Costs as a Percentage of Operating Costs,FY 1994 – FY 2005 46Table 4.1 Institutional Costs by Division, FY 2005 ( K) . 47Table 4.2 Institutional FTEs Charged by Division FY 2005 47Figure 4.3 Payroll Burden Summary ( M) . 48Figure 4.4 Gross Payroll Summary FY 2005 ( M) . 48Table 4.3 Organizational Burden Costs and FTEs . 49Table 4.4 Service Center Costs and FTEs 49Table 4.5 Distributed Recharges by Resource Category Trends FY 2001 – FY 2005 ( K).50i

5. Financial StatementTable 5.1 Laboratory Balance Sheet . 53Notes to the Balance Sheet . 546. Procurement and Property Management InformationTable 6.1 Requisitions Submitted by Laboratory Divisions . 61Table 6.2 Purchases Placed Using Written Subcontracts . 62Table 6.3 Purchases Placed Using P-Card 62Table 6.4 Laboratory Socioeconomic Performance .63Table 6.5 Property Management Activity . 647. Data From Other LaboratoriesTable 7.1 Other DOE Laboratories for Which Financial Information is Available . 67Table 7.2 Summary Cost Data for DOE Laboratories, FY 2001- FY 2004 . 67Table 7.3 Overhead Information for DOE Laboratories, FY 2004 . 68Table 7.4 Overhead Costs as a Percentage of Operating Costs for DOE Laboratories 69Figure 7.1 Functional Support Cost as a Percentage of Total Cost, FY 2000-FY2004 708. Acronyms and Key TermsAcronyms and Key Terms 73ii

Chief Financial Officer’s StatementI am pleased to present the FY 2005 Chief Financial Officer’s (CFO) Annual Report and hopethat you will find it a useful reference tool. Data includes information from the Budget Office,the Controller, Procurement and Property Management, and the Sponsored Projects Office. Wehave also included some financial comparisons with other DOE laboratories along with aglossary of common acronyms.FY05 continued to be a time of financial change and growth for the Laboratory. Two Laboratoryfunctions were added to the OCFO organization. In June, Travel and Conferences, and PropertyManagement came under the OCFO umbrella. With the move of Property Management intoProcurement, we also hired a new leader for the Procurement Department. Another key hire forFY05 was the addition of a Controller. With these two new additions, the senior managementteam of OCFO is now complete and will allow us to provide even better service to the divisionsas well as greater financial assurance and expertise.FY05 was a year of financial accomplishments. The PeopleSoft 8.8 upgrade of our internalfinancial system, as well as the new DOE accounting system (STARS/IMANAGE), were bothimplemented. These major systems upgrades were performed with little disruption to everydayactivities for the divisions. An LBNL institutional cost distribution restructuring took place,resulting in a more equitable and transparent method of allocating costs, which will ensurealignment of good business practices with the Lab’s strategic mission. The OCFO developed anew financial policy and procedures manual as a resource for Laboratory employees, inaccordance with best practices and compliance with DOE and UC regulations. Training infinancial procedures and system tools was also conducted to enhance core competencies andincrease staff proficiencies to enable sound financial decision support for Laboratorymanagement.In Procurement, a new Small Business and Supplier Management Office was established toaggressively promote subcontracting opportunities for small and disadvantaged businesses and toexecute a new Supplier Management Plan. Also in FY05, a new Procurement Self-AssessmentPlan to evaluate both systems and transactions was implemented.The OCFO completed its five-year strategic plan outlining our approach to provide the greatestcapability for the least cost while continuing to provide the highest standard of professionalfinancial management for the Lab. Our approach includes organizational transformation, timelyand accurate reporting, assurances, benchmarking, creating and sustaining partnerships, anddeveloping human capital.FY06 will be challenging as budget uncertainties continue. Plans for FY06 financial systemsinclude utilization of the ePro PeopleSoft program for the Supply Chain initiative. This includesthe automation and the ability for employees to procure via Business to Business contracts, andto receive electronic invoices and payments from vendors. The Budget Office will continue towork with our IT professionals to implement a funds control system; and a redesign of the timeand-effort reporting system will be initiated. Financial management courses will be developed1

and offered to employees in FY06, as well as the development of additional, relevant financialpolicies and procedures.As assurances become more stringent, OCFO will focus its efforts on the implementation ofOMB Circular 123, the government-mandated regulation for assuring financial integrity.Fulfilling the promises of our strategic plan will also be a major part of our focus in the comingfiscal years.The information in this report was compiled by the Office of the Chief Financial Officer. Pleasedirect any questions or comments regarding this report to me or members of my staff. Wewelcome suggestions for improving this report as well as other ideas that will help us enhanceour financial management activities in support of the Laboratory’s mission.Jeffrey A. FernandezChief Financial OfficerLawrence Berkeley National Laboratory2

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1. Office of the Chief Financial Officer Organization5

Michael CostelloControllerController’s OfficeThe responsibility of the Controller’s Office, led by Michael Costello, Controller, is to furnishtimely and accurate financial information to UC, DOE, and the Laboratory community. TheController’s Office is dedicated to delivering efficient and cost-effective financial and travelservices through a team of highly competent and dedicated professionals. It is also theController’s responsibility to ensure that the Lab has a strong internal control environment and isin compliance with government accounting standards and applicable laws and regulations.The Controller’s Office consists of the following groups:General Accounting:General Accounting (GA) provides overall coordination for the accounting activities at the Lab.GA is responsible for the monthly financial reporting to DOE and annual reporting to UC. GAhandles property accounting, banking relations, and coordinates monthly close activities withdivisions and OCFO departments.Payroll:Payroll is responsible for all bi-weekly and monthly pay cycles, and all employee payroll-relatedactivities. Payroll works to resolve all timekeeping issues and handles all federal and stateregulatory filings (IRS, Franchise Tax Board, etc.).Travel and Conference:The Travel Unit coordinates all travel services for the Lab including: travel reservations, travelagency liaison, expense voucher processing, DOE foreign travel documentation and approval,travel hotline, and Gelco system training. Conference Coordination manages all aspects of largeand small conferences, meetings, and symposiums including negotiating vendor contracts forhotels, conference space, food, and other conference services.Disbursements:Disbursements (Accounts Payable AP) ensure timely payment of all vendor and non-payrollrelated employee payment requests. AP maintains a strong system of controls to ensure properauthorization and documentation is received before payments are made.Accounts Receivable:Accounts Receivable (AR) provides billing and collection support for the Work-for-Othersprograms and projects. AR works closely with the Sponsored Projects Office to coordinatefinancial issues surrounding sponsors’ funding, advances, and billings.6

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Minh Agon HuebnerBudget OfficerBudget OfficeMinh Agon Huebner, Budget Officer, leads a team of financial professionals dedicated toproviding high-quality products and services to DOE and LBNL internal partners in support ofeffective business decisions and sound financial management practices.The Budget Office consists of the following two groups:Direct Budget:The primary function of Direct Budget is to provide assurance that the formulation and executionof budgets complies with DOE requirements and remains within Non-DOE sponsors’ financialterms. Through interactions with DOE and in partnership with LBNL’s financial managementcommunity, Direct Budget facilitates funding issue resolutions, interprets DOE directives andguidance, and develops appropriate Lab financial policies.Indirect Budget:The primary function of Indirect Budget is to provide high-level oversight for indirect budgets.This oversight includes projecting the institutional indirect revenues, managing the indirectbudget formulation process, reviewing cost elements and allocation methodologies fordistributed budgets, performing related-cost impact analyses, and developing appropriate Labfinancial policies.8

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