Management System Owner: Chief Financial Officer
Revision and Date: Revision 2.2 - January 2, 2019
The objectives of the Finance Management System are to assure efficient, effective financial operations (including Travel) in support of the laboratory’s high energy physics program in accordance with all applicable laws, regulations, and DOE requirements as set forth in the Contract. The Finance Management System is a set of interrelated elements that Fermilab uses to assure that financial management is executed in accordance with the Contract, and to improve how financial policies, objectives, processes, and procedures are established, implemented and monitored to provide such assurance.
Other DOE orders, regulations, and statutes
FRA Contract Clause Mapping to Management Systems
The processes included within the Finance Management System are described below:
4.3 Sponsored Programs & Corporate Accounting
The Travel Office provides travel reservations and airline ticketing for all official travel at the Laboratory. This is done in compliance with the DOE contract, Federal Travel Regulations, DOE Orders, and other DOE executive-level guidance. Cooperation with the Accounting department is ongoing to ensure costs are deemed reasonable and allowable. The Travel Department complies with the DOE Foreign Travel Management System, as well as maintains a Conference Travel data base for the Laboratory to comply with 2012 OMB Conference guidelines. Continuous internal process improvement, including automated enhancements, is what drives efficiency and accuracy in an area that is highly complex and subject to rapidly changing interpretations of the rules.
The Foreign Travel Management System (FTMS) is the official DOE system for tracking, monitoring, reporting, and securing approval of all foreign travel conducted by Federal and contractor employees. Consistent with the DOE Foreign Travel Order 551.1D, all official foreign travel requests must be entered in the FTMS and must obtain approval in the FTMS prior to traveling. The Lab foreign travel process is designed to ensure compliance as noted in the Order.
184.108.40.206 Approvals – The Office of Science has delegated the Laboratory the authority to approve all trips to non-sensitive countries. The Fermilab Travel Office has established appropriate internal controls to ensure accountability and reviews of foreign trip requests for accurate reporting; ensures available funding, and reports to DOE if the trip is determined to be a conference before routing the trip request to the Lab COO for final Lab approval. Foreign trips to sensitive countries are further routed to the DOE Site Office and the DOE Office of Science Program Office for further approval. The Travel Office ensures that each trip request receives country clearance from the U.S. Embassy in the country to be visited before the start of the travel.
220.127.116.11 Arrangements - Travel funds, typically for airfare, can be obligated when the trip request is approved by the Division Head or Designee and the Funding Officer, and reviewed and approved by the Travel Office.
18.104.22.168 Approvals – Official travel requests require the approval of the Division/Section/Project Head or his/her designee, who determines if the purpose of the trip is necessary to meet the Laboratory's mission requirements and in accordance with Laboratory policy. Each Division/Section/Project has a person(s) appointed who acts as a conference regulator. The conference regulator reviews all travel authorizations to determine whether the travel is to an official conference.
22.214.171.124 Arrangements – Airline and rental car reservations for official Laboratory travel for employees and Fermilab paid trips for visitors should be made through the Laboratory's designated travel agency. Tickets purchased and billed through the Laboratory's designated travel agency are the property of the Laboratory. Any cancellations must be reported to the travel office prior to departure time.
Continuous improvement is integrated into the finance operations. Errors are analyzed for root cause, and controls are developed or altered to prevent future errors, or to detect future errors on a timely basis if preventive controls are not practical, cost-effective, and/or efficient.
Internal controls over financial operations are executed in line organizations across the laboratory. Each organization has a Field Financial Manager (FFM) who is responsible for assisting the CFO in implementation of financial control activities labwide, with the support of their respective DSC Head. FFMs and their staff members meet with Budget, Accounting, and IT groups each month to discuss financial management issues. In addition, senior FFMs from the Divisions meet with the CFO, Budget Officer, and Chief Accounting Officer each month to address policy matters and other high-level issues.
Processes supporting the Finance Management System fall into the following categories: Measures, Assessments, Issue Management and Corrective Actions, Continuous Improvement, and Communications.
Measures are an important element of the Finance Management System, particularly with respect to budget execution. Measuring processes support the assurance system in the following areas:
Budget Execution and Monitoring. Comparisons of budgets to actual results; budgets to funding available; and funding to actual results are performed monthly and exceptions analyzed and resolved. The CFO meets with senior management twice monthly to address budget execution issues. Funding, plans, actual results, and contract status are presented to the FRA Board of Directors at each meeting.
Operational reporting and monitoring. On a periodic basis, various operational measures give managers information on operations, such as aged invoices, travel voucher backlog, or erroneous payments.
Deadlines. Deadlines, met and missed, are a measure of on-time performance, which is critical to effective financial operations like payroll or month-end close.
The primary assurance mechanism in the Finance Management System is the annual process controls assessment performed to assist DOE in meeting its obligations under OMB Circular A-123, Appendix A, Internal Control over Financial Reporting. The assessment is performed in accordance with guidance issued by the DOE Chief Financial Officer. The assessment involves process owners across the laboratory, including managers in Finance, Procurement, Property, Human Resources, Travel, ES&H, and IT. The Chief Accounting Officer leads the update, delegating day-to-day management of the process to an A-123 Manager. The assessment includes the documentation of processes by process owners; the identification and evaluation of risks within those processes (risks prescribed by DOE as well as locally-identified risks); the identification of key controls that mitigate those risks to a reasonable level; and the independent testing of the key controls on a risk-based cycle to assure they are functioning. Corrective action plans (CAPs) are developed for all deficiencies found in testing. Deficiencies are reported to DOE and to the FRA Board of Directors Audit Committee at each meeting. DOE and the Audit Committee track CAPs to resolution.
Annual independent audits and assessments are an integral part of the Finance Management System, most importantly the FRA Financial Statement audit, including the A-133 federal grants audit; and the Annual Cost Allowability Audit conducted by Internal Audit as part of the IG's Cooperative Audit Strategy. Issues and findings from audits and assessments, and associated corrective action plans, are reported to the FRA Board of Directors Audit Committee at each meeting, and CARs are tracked to resolution.
Financial findings may result from any of the reviews, audits, or reports noted in 6.0 below. Findings are assigned to a responsible person for resolution, which may require the development of a formal corrective action plan and the execution thereof. Management is responsible for providing resources necessary to resolve the finding. Financial findings are reported to the Audit Committee at every meeting along with the status of corrective actions. CAPs associated with OMB A-123 deficiencies are submitted to DOE, with quarterly status updates on CAP completion.
Continuous improvement is integrated into the finance operations. Errors are analyzed for root cause, and controls are developed or altered to prevent future errors, or to detect future errors on a timely basis if preventive controls are not practical, cost-effective, and/or efficient. Every known error is followed up, with management’s determining root cause and implementing cost-effective changes to prevent, or timely detect, future errors.
The following avenues of communication support the Finance Management System.
The Finance Management System relies on the operation of the Information, Procurement, Performance Planning, and Governance Management Systems.
Management's Assessment of Internal Control – Identification and evaluation of risks associated with all processes involving material financial statement activity. Includes identification of mitigating controls and the testing of the effectiveness of those controls on a risk-based cycle.
External GAAP-based audit of FRA’s financial statements which include Laboratory revenues and expenses under the Prime Contract with DOE. Auditors are engaged to express an opinion on the fair statement of the financials; and to issue a comment letter to management on internal control issues coming to their attention in the course of the audit.
External audit on compliance with OMB Circular A-133 with respect to federal grant funding. Required when federal grant revenue exceeds the defined threshold.
Internal audit reviews for unallowable costs charged to the contract; audit program formulated as part of the Inspector General's Cooperative Audit Strategy.
External GAAP-based audit of the benefit plan related to FRA contributions to employee accounts. Required to accompany the filing of IRS Form 5500.
External GAAP-based audit of the benefit plan related to employee contributions to employee accounts. Required to accompany the filing of IRS Form 5500.
Management's self-assessment of program and financial plans by organization for the upcoming budget execution year.
In addition to the Annual Allowable Cost Audit discussed above, other targeted audit areas vary each year and are selected based on a formal risk assessment by the FRA Manager of Internal Audit. CFO participates in risk assessment process with Manager of Internal Audit and DOE.
Periodic audits in areas selected by the DOE IG. Statement of Costs Incurred (SCIC) audits, which focus on allowable costs, occur cyclically, currently every 4 years for FRA.
Periodic reviews (currently every 3 years) of the annual ICR submitted to DOE by teams consisting of contractor and DOE personnel.
Travel Authorization/Expense Report
This section formally captures the extension of the management system to Fermilab activities and roles at Sanford Underground Research Facility (SURF). The Finance Management
System applies identically to FRA-sponsored work in South Dakota as
it does in Batavia and the same points of contact should be used.