ML20003G075
| ML20003G075 | |
| Person / Time | |
|---|---|
| Issue date: | 04/13/1981 |
| From: | Hendrie J NRC COMMISSION (OCM) |
| To: | Socolar M GENERAL ACCOUNTING OFFICE |
| Shared Package | |
| ML20003G065 | List: |
| References | |
| NUDOCS 8104280180 | |
| Download: ML20003G075 (5) | |
Text
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q UNITED STATES NUCLEAR REGULATORY COMMISSION n
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WASHINGTON, D. C. 20566 8
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April 13,1981 CHAIRMAN The Honorable Milton J. Socolar Acting Comptroller General of the United States General Accounting Office Washington, D.C. 20548
Dear Mr. Socolar:
Enclosed, in accordance with Section 236 of the Legislative Reorganization Act of 1970, is the U.S. Nuclear Regulatory Commission's statement of actions being taken on recommendations in the General Accounting Office's January 23, 1980, report entitled " Disappointing Progress In Improving Systems for Resolving Billions In Audit Findings."
Sincerely, t
\\ kLL k boTephM.Hendrie
Enclosure:
Respon;;. to GA0 Report 8104 es o 160
NRC'S GENERAL RESPONSE
_TO THE REPORT The auditing of HRC's programs and contracts is the responsibility of the Office of Inspector and Auditor (01A).
OIA has entered into an agreement with NRC's Division of Contracts whereby pre-award and close-out audits of contracts are carried out by the Defense Contract Audit Agency (DCAA) and the Department of Health, Education and Welfare -- now the Department of Health and Human Services (HHS) and the Department of Education -- audit staffs.
Iri January 1979 in response to GA0's report entitled, "More Effective Action is Needed on Auditors' Findings--Millions Can Be Collected Or Saved," NRC developed more specific and formalized procedures for following up on audit recommendations. These procedures generally provided that:
1.
01A will provide the agency official responsible for the program being addited, generally the Executive Director for Operations (EDO), an opportunity to comment on draft reports before they are sent to the Commission.
2.
In commenting on draft audit reports, the ED0 will provide OIA with a statement of what actions will be taken and by whom and a date by which each action will be completed.
These commitments are included in the final report sent to the Commission.
3.
The ED0 is responsible for advising OIA no later than the dates specified either that (1) the action is completed, or (2) the status of the action underway and a revised target date for completing the action.
4.
After the ED0 has advised ]IA that all recommendations agreed to l
have been implemented, Oli performs sufficient checks to assure l
itself that all recommerMions have been satisfactorily implemented.
OIA then issues a follow ap report to the Commission.
5.
When OIA and the EDO cannot agree on the need for corrective actions identified in audit reports the issue is immediately elevated to the Commission in the final audit report.
Similarly, any disagreements between 0IA and the ED0 on the adequacy of l
corrective actions taken are immediately elevated to the Commission l
in 0IA's follow-up report.
l 6.
Findings resulting from DCAA, HHS and Department of Education i
audits of NRC contracts are generally of two types:
those requiring a change by the contractor and those requiring an action by NRC.
It is DCAA's, HHS's and Education's responsibility to follow up on findings at contractor facilities while recommendations addressed to NRC fall within the established NRC follow-up procedures.
2
2
' Appendix II of the GA0 report identifies $195,000 of unresolved monetary findings at NRC, of which $10,000 was over one year old.
These findings resulted from two DCAA audits of NRC contracts.
NRC's Division of Contracts resolved $185,000 of these findings on August 18, 1980. The remaining $10,000 is still unresolved because the contractor, a private consultant, died. NRC is currently reviewing the audit report and contract closecut and contemplates resolving this issue with the executor of the contractor's estate.
Appendix III identifies five areas in which GA0 believes NRC's follow-up procedures are deficient. While we recognize that some improvements may be necessary in our written follow-up procedures so that they perfectly parallel Circular A-73 as revised, we disagree that our existing system is not in compliance with A-73 in the five ways stated by GA0.
After OMB Circular A-73 was revistd, NRC's existing reporting and follow-up procedures were reviewed to determine what changes were necessary.
We believed at that time the only change necessary was preparation of semiannual reports to the Commission on audit reports over six months old.
Our existing reporting and follow-up procedures already provided for written detenninations on audit findings before final reports are issued to the Commission and for elevating auditor / agency official disagreements to the Commission in final audit reports.
Furthermore, our existing system had adequately dealt with findings regarding recovery of money and coordination with other agencies even though the system had not been fully documented.
As a result, we believe four of GA0's five findings relating to NRC are the result of not fully documenting our system rather than not having a workable system in place.
In regard to the issuance of sendannual reports to the Commission, 0IA's first semiannual report on audit tooorts over six months old was sent to the Commission on February 10, 1981.
This report covered all audit reports issued before July 1980.
Semiannual reports will be prepared as of June 30 and December 31 each year, and will be consistent with OMB Circular A-73.
In regard to the other four areas identified in Appendix III, NRC's written follow-up procedures are being revised at the present time to fully document our compliance with OMB Circular A-73.
Our responses to the specific GA0 recommendations follow:
Recommendations to Heads of Federal Agencies 1.
Recommendation Further improve audit resolution policies, procedures and practices to comply with the intent and spirit of OMB guidelines, designating a top level manager to coordinate these efforts and prepare progress reports for 0MB.
NRC Response NRC's follow-up procedures for audit recommendations are currently being reduced to writing to fully document our compliance.with OMB Circular A-73.
The Director, Office of Inspector and Auditor, is
3 responsible for coordinating and overseeing these efforts. OIA will provide OMB with progress reports, as necessary, and a copy of NRC's rc/ised procedures.
2.
Recommendation Take legal or administrative actions against the parties involved whenever audit findings concern fraud, waste, or abuse of Federal funds.
NRC Response In addition to performing internal audits, 0IA is responsible for carrying out NRC's investigative function and interfacing with the Department of Justice.
As e result, the investigative staff is immediately notified of any audit findings which could result in legal action against the parties involved.
Findings which are violations of criminal statutes are in all cases referred to the Department of Justice.
The ED0 is responsible for taking administrative actions against NRC employees or contractors. The ED0 has and will continue to take administrative actions, as he deems appropriate, as a result of any audit findingr. concerning waste, fraud or abuse of Federal funds.
3.
Recommendation flake the timeliness and quality of audit resolution a written perfomance standard and a factor in detemining bonuses for Senior Executive Service members and merit pay for supervisors.
NRC Response We believe the timeliness and quality of audit resolution is already covered in our SES system through the evaluation of a manager's overall management competence.
A problem we foresee in specifically including standards such as this in SES contracts is that it opens up SES contracts to every special interest group that wants to make sure its program is adequately provided for.
NRC will, however, consider including a specific perfomance standard for the next evaluation period by htlich to evaluate how effectively and responsibly program officials involved in audit resolution have l
carried out those duties.
l NRC is not covered by the merit pay provisions of the Civil Service Refom Act.
Recommendation to Inspectors General and j
Directors of Audit Organizations l
Recommendation We recommend that the inspectors general and directors of audit agencies develop internal organizational procedures and controls for efficient and effective planning, coordinating, reviewing, and l
4 reporting of audit work and audit follow-up activities in accordance with GA0 and other professional standards.
NRC Response As was pointed out above, NRC has written procedures for_following up on audit recanmendations which are currently being revised.
In addition, 01A is currently developing an audit and inspection manual covering all phases of its operations. All of the audit and follow-up procedures developed by GIA will continue to utilize GAD, OMB and other professisonal audit standards, as appropriate.
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