Appendix F
OBJECTIVE STANDARDS OF PERFORMANCE

Section A -- Performance Objectives
Part IV --FINANCIAL MANAGEMENT

• PERFORMANCE OBJECTIVE #1 -- Alignment with Missions
• PERFORMANCE OBJECTIVE #2 -- Customer Focus
• PERFORMANCE OBJECTIVE #3 -- Effectiveness and Efficiency
• PERFORMANCE OBJECTIVE #4 -- Financial Stewardship

PERFORMANCE OBJECTIVE #1 -- Alignment with Missions Financial management practices use partnerships to meet mission goals and programmatic needs. (Weight = 20%)
CRITERIA		PERFORMANCE MEASURES
1.1	Demonstrated Understanding of Missions Financial Management products and services demonstrate cooperation and understanding of DOE mission guidelines and requirements. (Weight = 15%)	1.1.a	Feedback on Quality of Performance Budgets, analyses, estimates, and proposals submitted have minimal time/form/content deficiencies and incorporate budget validation and other systematic customer feedback. (Weight = 15%)
Assumption: Annual budget process will be measured for timeliness and quality by measuring on-time performance and a narrative describing the continuous process/product improvement and the proactive activities related to this Performance Measure. Gradient: A Meets Expectations rating is achieved by meeting the milestone dates for the annual budget submission(s) and by demonstrating tangible improvements in the budget process(es) itself and/or in the budget products developed. Factors that will be considered for a higher rating include: reductions in cycle time and/or cost, automation improvements and initiatives proactive activities such as training and development of Financial Management staff and internal customers customer feedback and other relevant information Assumption: Key financial management information is available to internal customers. A narrative will document the process for improved services. Gradient: A Meets Expectations rating is achieved by meeting the target of 90% on-time performance with acceptable quality as determined by customer feedback. Factors that will be considered for a higher rating include: above 90% on time performance good customer feedback improved customer services Assumption: Reimbursable proposals. A narrative will describe process improvements, cost reductions, efforts and successes. Gradient: A Meets Expectations rating is achieved by demonstrating that the process is functional and workable. Factors that will be considered for a higher rating include: improvements in cycle time cost customer satisfaction Assumption: DOE periodic reports and special ad hoc DOE requests regarding budgets, analyses, estimates, and proposals will measure only formal written requests with deadlines of 8 working hours or more and sent to the Controller's organization. Narrative will include customer satisfaction information from 2.1.a. Gradient: A Meets Expectations rating is achieved by achieving 90% of on-time performance with acceptable quality as determined from customer feedback. Factors that will be considered for a higher rating include: on-time performance greater than 90% good customer feedback service delivery cost reductions Assumption: One and 5 - year Systems Plans. A narrative will describe timeliness and quality. Gradient: A Meets Expectations rating is achieved by receiving satisfactory feedback and timelines. Factors that will be considered for a higher rating include: improved levels of customer satisfaction.
1.2	Proactive Leadership in Support of Missions Financial management takes a proactive leadership role in supporting agency missions, and Laboratory programs and initiatives. (Weight = 5%)	1.2.a	Document Accomplishments Identify and annually report financial management accomplishments in support of agency missions and Laboratory programs and initiatives. (Weight = 5%)
Assumptions: Narrative describing activities and processes in support of this criterion. Gradient: Factors that will be considered for rating include: cost and cycle time reductions improved capacities customer feedback
PERFORMANCE OBJECTIVE #2 -- Customer Focus Financial management practices are customer oriented. (Weight = 16%)
CRITERIA		PERFORMANCE MEASURES
2.1	Methods to Evaluate Customer Expectations Maintain methods/programs to collect and evaluate internal and external customer needs and levels of satisfaction. (Weight = 8%)	2.1.a	Effectiveness of Methods Maintain effective methods to collect, document, and use data to satisfy internal and external customers. (Weight = 8%)
Assumptions: Methods to be systematic and include implementation prioritization and action plan tracking systems. Narrative describing activities and processes in support of this criterion. Methodology should accommodate required data in support of all financial performance criteria. Gradient: A Meets Expectations rating is achieved by developing and implementing the capability for systematically obtaining customer feedback. Factors that will be considered for a higher rating include: coverage of customer segments quality of feedback continuity
2.2	Customer Service Improvement Program Maintain a customer service improvement program for financial services. (Weight = 8%)	2.2.a	Assessment of Customer Service Improvement Program Achieve customer service improvements to meet customer needs. (Weight = 8%)
Assumptions: Narrative describing activities and processes in support of this criterion. Assess effectiveness of customer service improvement plan. Gradient: A Meets Expectations rating is achieved by maintaining a customer service improvement plan. Factors that will be considered for a higher rating include: demonstrated improved customer satisfaction comprehensiveness and aggressiveness of the plan meeting planned milestones
PERFORMANCE OBJECTIVE #3 -- Effectiveness and Efficiency Achieve cost effective and efficient Financial Management operations by applying available resources to continuous improvement efforts. (Weight = 34%)
CRITERIA		PERFORMANCE MEASURES
3.1	Leadership in Improving Systemwide Efficiency and Effectiveness Consistent with DOE requirements and plans, take proactive leadership role to improve the systemwide effectiveness and efficiency of budget and financial systems. (Weight = 10%)	3.1.a	Implement MARS and SGL Implement the DOE Management Analysis Reporting System (MARS) and Standard General Ledger (SGL) as scheduled by DOE. (Weight = 3%)
Assumptions: Narrative describing progress in support of this criterion. Use existing tools and project plans. Gradient: A Meets Expectations rating is achieved by meeting scheduled milestone dates. Factors that will be considered for a higher rating include: related staff training and development other proactive efforts
		3.1.b	Leadership in Systems Improvements Seek opportunities (including electronic commerce and administrative control of funds) to provide proactive leadership in support of DOE and laboratory initiatives for continued contractor systems improvements. (Weight = 7%)
Assumptions: Narrative describing progress in support of this criterion. Use existing tools and project plans. Gradient: Factors that will be considered for rating include: cost and cycle time reductions improved capacities customer feedback progress towards long term initiatives
3.2	Transaction Processing Improvements Reduce cycle times and/or cost per transaction, and improve quality and accuracy for the following transaction processing activities: Accounts Payable Accounts Receivable Suspense Account Payroll Domestic Travel Accounting General Accounting (Weight = 20%)	3.2.a	Quantification of Improvement Trend toward best FMSIC and/or industry quality practices as appropriate per FY95 benchmarking data. Achieve measurable improvement over FY95 baselines. accuracy cycle times cost Graph monthly cycle times with a minimum standard line and target line and/or graph the cumulative cost per transaction with a minimum standard line and target line. (Weight = 20%)
Assumptions: This performance measure includes a series of graphs which chart the accuracy, cycle times, and cost effectiveness of identified production activities. The Laboratory will establish individual maintenance or improvement targets based on management priorities and/or its position with respect to FMSIC and/or industry benchmarking results. It is recognized that activities already performing at acceptable levels may only require maintenance targets. The Laboratory will use graphs and data elements consistent with FY95 self assessment. ACCOUNTS PAYABLE Discounts: Measure gross cost effective discounts available vs. discounts taken. Discounts < $10 may not be cost effective. Cycle time: No more than 15% of vendor payments occur before or after due date. Cumulative graph line and showing % of payments made with 15% minimum standard line and a 10% target line. Consistent with DOE Order 2200.6, payment dates to be calculated from date of constructive receipt or invoice date, whichever is later. Use gross number of invoices not just controllable invoices. Measure invoices not dollars. Cost: Graph production cost per transaction with minimum standard line and target line. Use appropriate benchmarking cost element criteria. Labor costs will include fringe benefit costs and no other burdens. In the case of working supervisors, include measurable time spent on processing accounts payable. Transactions defined as number of invoices. ACCOUNTS RECEIVABLE Cycle time: Aged receivables will be measured and reduced in 181+ days, 121-180, 91-120, 61- 90, 31-60, 1-30 groupings. Cost: Graph production cost per transaction with minimum standard line and target line. Use appropriate benchmarking cost element criteria, general guidelines and customer billing assumptions. Labor costs will include fringe benefit costs and no other burdens. In the case of working supervisors, include measurable time spent on processing accounts receivable. Transactions defined as number of invoices issued. SUSPENSE ACCOUNT Process Improvement: Improve the process for clearing of suspense account transactions. Gradient: A Meets Expectations rating is achieved by having cumulative dollars in suspense account(s) zeroed out at year end. Factors that will be considered for a higher rating include: average cumulative dollars in trends down during year minimization of cumulative dollars in and cumulative dollars out discrepancy improvement in performance from previous year PAYROLL Cost: Graph cost per employee with minimum standard line and target line. Use appropriate benchmarking cost element criteria. Labor costs will include fringe benefit costs and no other burdens. In the case of working supervisors, include measurable time spent on processing payroll. DOMESTIC TRAVEL ACCOUNTING Cycle time: The Laboratory will establish cycle time reduction/maintenance targets after considering relevant information and management priorities. Performance clock begins when receipts are received in Travel Accounting from the traveler. All receipts are recorded at the end of that business day. Measure is for closure of all domestic travel vouchers submitted. The clock stops when Travel Accounting completes and sends the completed voucher out for signature and/or payment. If the information (receipts and paperwork) received is inadequate to complete a voucher and additional information is needed, a date is recorded which stops the clock until that information is received by Travel Accounting. Cost: Graph production cost per travel claim with minimum standard line and target line. Use appropriate benchmarking cost element criteria. Labor costs will include fringe benefit costs and no other burdens. Travel claims defined as expense reports submitted. In the case of working supervisors, include measurable time spent on processing travel expense reports. GENERAL ACCOUNTING Cycle time: Graph comparing actual days to close to targeted days to close and cumulative average. Close date is defined as the date that the General Ledger is closed. The Laboratory will establish cycle time improvement targets after considering relevant information and management priorities. Cost: Narrative and graph (cost per million dollars of previous year's expenditures) that demonstrates a system/method for measuring and reducing these costs compared to industry benchmarking standards/initiatives. Gradient: Cost/cycle time measures above a Meets Expectations rating is achieved by meeting Laboratory-specific targets. Factors that will be considered for a higher rating include: trends aggressiveness of targets performance improvements over previous years
3.3	Work Force Management Develop a highly skilled, motivated, empowered Financial Management Work Force. (Weight = 4%)	3.3.a	Effective Work Force Management Develop a narrative report describing processes, systems, and initiatives related to Financial Management work force management. (Weight = 4%)
Assumptions: Narrative to describe assessment of Financial Management work force management of processes, systems and initiatives. Gradient: A Meets Expectations rating is achieved by establishing a systematic approach to Financial work force management. Factors that will be considered for a higher rating include: span of control ratios number and effectiveness of self-directed work teams merging of related functions training and development activities alignment of individual performance objectives/appraisals with Financial Management objectives
PERFORMANCE OBJECTIVE #4 -- Financial Stewardship Financial management practices provide for financial stewardship, including compliance and data integrity. (Weight = 30%)
CRITERIA		PERFORMANCE MEASURES
4.1	Costs and Commitments are Managed Properly Ensure that all costs and commitments are within DOE-authorized funding levels or that costs and commitments in excess of such levels are properly reported and recorded. (Weight = 6%)	4.1.a	Costs and Commitments are Controlled to Appropriate Funding Levels. Identify funding levels. Control costs to B&R Level 9, graph % within funding levels. Control commitments within authorized major funding levels (ECOR). (Weight = 4%)
Assumptions: "Within funding levels" to mean within funding modifications. "Commitments" definition to be consistent with definition used in Uncosted Obligations Report. Meeting the objective of this performance measure is applicable only at year end for Construction, Operating, Capital Equipment funds. Line item capital equipment and construction is applicable monthly. The UC grade will be assessed consistent with this statement. Quarterly graphs for Operating, and non-line item capital equipment and construction. Line item capital equipment and construction will be graphed monthly. Graph costs plus commitments to ECOR limits. Graph Costs to Level 9 limits. Gradient: A Meets Expectations rating is achieved by staying within funding levels as defined above. Factors that will be considered for a higher rating include: monthly trends training and development other proactive activities to effectively manage and control funds
		4.1.b	Control of Funds Proactive activities designed for control of funds. (Weight = 2%)
Assumptions: Narrative describing initiatives. Gradient: A Meets Expectations rating is achieved by implementing an effective process for mitigating administrative control of funds violations. Factors that will be considered for a higher rating include: process improvements enhancements to controls awareness training timely notification to DOE of significant changes in projected year-end uncosted balances.
4.2	Asset and Debt Management Improve asset and debt management practices. (Weight = 6%)	4.2.a	Document Improvements Identify and report annually cash and inventory management improvements/accomplishments. (Weight = 6%)
Assumptions: Asset management includes Letter of Credit, imprest funds, and inventories. Narrative describing initiatives to better manage assets including cash, stores and precious metals. Gradient: A Meets Expectations rating is achieved by demonstrated incremental improvement. Factors that will be considered for a higher rating include demonstrated quantum improvement.
4.3	Revenues are Processed Properly Ensure all revenues are promptly collected, processed and classified appropriately. (Weight = 6%)	4.3.a	Validation of Properly Processed Revenues Develop reports showing collections and classifications. Validate classifications, document to DOE requirements and trend error rates. (Weight = 6%)
Assumptions: A spreadsheet will be maintained by each Laboratory. The spreadsheet will document the processing of each item of revenue collected and its disposition (e.g., sent to the U.S. Treasury or deposited in LOC account). Gradient: A Meets Expectations rating is achieved by meeting 98% accuracy and timeliness targets. Factors that will be considered for a higher rating include process improvements.
4.4	Effective Internal Controls and Audit Findings Follow-up Provide for effective internal controls and ensure timely and effective resolution of identified weaknesses. (Weight = 6%)	4.4.a	Internal Controls/Compliance Management Maintain an effective system for identifying, reviewing, and correcting (if identified) financial management internal control/compliance processes. (Weight = 6%)
Assumptions: Describe and self assess selected systems/processes identified in conjunction with DOE. Gradient: A Meets Expectations rating is achieved by accurately describing well designed and well deployed systems/processes for managing internal controls and compliance. Factors that will be considered for a higher rating include: a risk prioritization system that demonstrates laboratory focus on high risk financial management control/compliance areas. prompt completion of corrective actions process improvements aggressiveness of corrective action schedules effective process for identifying with DOE, annual target areas
4.5	Quality of Data and Reports Financial accounts and reports fully disclose the results of operations, and contain accurate, useful, timely information for program and fiscal management needs. (Weight = 6%)	4.5.a	Policies, Data and Reports Consistent with CAS Policies, Data and Reports consistent with CAS compliance and DOE requirements; financial practices are consistent with approved disclosure statement. (Weight = 4%)
Assumptions: Narrative describing activities and processes in support of this criterion. Gradient: A Meets Expectations rating is achieved by having practices consistent with approved disclosure statements. Factors that will be considered for a higher rating include: agreed audit report findings proactive interaction with DOE training and development of staff and relevant program personnel
		4.5.b	Audited Financial Statements Prepare for FY96 year end audited Financial Statements consistent with DOE requirements. (Weight = 2%)
Assumptions: Narrative describing activities and processes in support of this criterion. Gradient: A Meets Expectations rating is achieved by demonstrating that the Laboratory is adequately prepared for this effort. Factors that will be considered for a higher rating include demonstrated proactive activities in preparation for audited financial statement audits. Assumptions: Where appropriate incorporate, in the self assessment, historical trends as the data becomes available. Laboratory-specific targets identified by end of January of each year contingent on availability of benchmarking results. Note: Laboratory-wide cost savings initiatives require the highest level of visibility and Laboratory commitment. For this reason, Performance Objectives, Criteria and Measures (POCMs) addressing cost savings are included in the Laboratory Management POCMs instead of here in the Financial Management section.

Appendix F Table of Contents
Appendixes Table of Contents
Contract 98 Table of Contents