Lawrence Livermore National Security CFO Processes Functional Management Assessment
The scope of the Functional Management Assessment of the CFO included a review of the CFO Organizational Structure, including deployed financial services and the division of responsibilities and internal controls between CFO and other organizations that perform financial functions across the Laboratory. In addition, the assessment team solicited input from end users and reviewers. Three issues discussed are: ISSUE 1: Financial activities and cash transactions are occurring outside the CFO organization. Approximately $200M of non-purchase order spending occurs in seven areas outside CFO control (travel, relocation, special disbursements, IPO, legal, risk management, and freight). NIF financial services have not been integrated into the CFO organization and operate outside CFO control. Business risks--There is no single point of financial accountably; Currently within the CFO and Business and Operations organizations there is a lack of clarity of roles and responsibilities for financial activities; Financial talent within the laboratory is fragmented; and Inefficiencies exist based on the current structure; An example of the above business risks associated with organizational structure can be observed in the process for reimbursement of relocation costs to employees. Currently, Human Resources and Travel both administer portions of an employee's relocation. Costs are reviewed for compliance with FAR travel guidelines and for compliance with the offer letter but there is no financial review for allowability of costs nor is there a single point where the total relocation costs are reviewed. Through the e-pay system the check is processed by the CFO organization but there is no review by that organization. ISSUE 2: Impact of involuntary separation on current and future activities. 3 risks are: (1) Loss of internal controls--with the upcoming involuntary reductions there will be a loss of personnel with institutional knowledge which will increase the risk of losing internal control on some processes. The organization needs to be cognizant of this risk and take measures to minimize financial risk and ensure on-going A-123 compliance. (2) Project Costing Implementation (PCI) delay--the implementation of PCI is key to achieving integration and reporting of financial data. Presently, business analysts spend half of their time collecting and compiling data and 94% of the labs financial management reports are created using spreadsheets. Currently, the PCI project is on schedule but the involuntary reductions may result in loss of support in this area. (3) Financial Performance Milestones not met--for FY-08 there are fixed, base and stretch financial performance milestones for the laboratory. With reductions in staff the risk of missing key milestones increases. ISSUE 3: Strategically growing the Work for Others (WFO) Portfolio. A key objective of the laboratory is to increase WFO. Greater reliance on WFO will result in additional funding sources and increase the number of control points and financial activities to be monitored thus increasing the level of financial complexity at the lab. The CFO organization should work now to improve controls and processes to accommodate these changes. In particular the following areas should be focused on: (1) Cost reporting needs to be streamlined; (2) Cost Transfer controls need to be increased; and (3) Timely monitoring and close out of contracts needs occur.
- Research Organization:
- Lawrence Livermore National Lab. (LLNL), Livermore, CA (United States)
- Sponsoring Organization:
- USDOE
- DOE Contract Number:
- W-7405-ENG-48
- OSTI ID:
- 945521
- Report Number(s):
- LLNL-TR-404714; TRN: US200904%%73
- Country of Publication:
- United States
- Language:
- English
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