ML20006C177

Final Response to FOIA Request for Records.App a Records Encl & Available in PDR

ML20006C177
Person / Time
Issue date:	02/01/1990
From:	Grimsley D NRC OFFICE OF ADMINISTRATION (ADM)
To:	King J ASSOCIATED PRESS
References
FOIA-90-26 NUDOCS 9002070036
Download: ML20006C177 (2)

Text

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PART 1.- ACE @tCORDS RittASED OR NOT LOCATf D (See checAed boats) e e,s..ecords..,,ect to ~,oo.e, heto beer, oc.,ed i

No addMeonel egency recorde subsect to the vogsest hevo taeen located.

Roguested records s's eveilable through e'iothof public distrebuuon program See Commaints Section.

Aper.y recoede subsect to the request that s'e adentifed on Appendimiest e,e already evailable for pot >lic mapecten and copying m the teRC Pu%c Document room PtP0 L Street. N W. WesNngton. DC 20$$$

Agency seco'os sub,ect to the esquest that see adentat.ed on Argend,alest are berg made eveilable for put4 inspect.on ered copyng an the

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leRC Pubs.c Document Room. 21?O t Street. N W.. WesNngton, DC. m a folder under tNs FoiA numter and requeste name.

The nonpeopretary versen of the peoposaits) that you og'eed to eccept in a telephone ccmverset.ori with a memter of my staff is now bomp snede evedeble los pu%c i

bspection end copyng et the NRC Pw%e Document Room Pt 20 L $t'oet. N W. WesNagton DC. m o foicier unooi tNs iOle number and eeovester name Agency reco es satyect to the eeovest 'het e't 6 der tdeeds,e eword stesi-mer tie inspec ted er.1 sognec e' the NRC (ocel h.,%c Dotument RoNn witatafeel

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f actosed 's mformation or, how you niet obtem access to and em owges % cost g, records pieced e, the hc.C #u%t Ducemes toom. Pt20 L $reet N W.

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two PART R. A-INFORMATION WITHHELD FROM PUBLIC D:$ CLOSURE CMem snfo menon e the reovested recoeds 4 bems *ithheid from putii.c disclosv e pu s ent to the esempi.oes oesce. bed m and foi the veesons staied in Port e.

sections 8. 'C. and D Any reieased pomons of the documents for *Nch oni, e,ert of the eecond is being *ithhee ce t>eme made e eaebie toe po e

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his is the first semi annual report for the U.S. Nuclear Regulatory Commission's (NRC) Office of the inspector General (OlG). Seml annual l

reports from the OlG are now required by the Inspector General Act of I

1978, as amended by the Inspector General Act Amendments of 1988.

Als report is for the period from the OlG's inception, April 15,1989, gggggg through September 30,1989.1t summarizes the OlG's aethities and J

accomplishments during this period.

J fOrIhe Since April 15,1989, the OlG has directed substantial effort toward full implementation of the Inspector General Act. Memoranda of Understanding were executed with the Office of the General Counsel Chairman !

end the Oflice of Administration io assure the eveliebtiitv eliesei a<h4ce and needed administrative senices and preserm the OlG's independent authority to do audits and im'estigations. A Memorandum of Understanding with the Office of the Controller is scheduled for execution October 2,1989. A Memorandum of Understanding with the Defense Contract Audit Agency is also being processed for signatures and an agreement with the Office of Personnel is being negotiated.

Other actions taken or in progress to implement our legislative requirements include the establishment of a program to resiew legislative and regulatory proposals affecting agency operations, key personnel actions, establishment of a HWLINE program and improvements in the investigative program.

During the reporting period, we issued live audit reports containing 35 recommendations for programmatic or operational improvements.1 am pleased to report that in almost all cases, agency management has agreed to implement our recommendations. Currently, we have 14 audits of agency programs in progress. The OlG also issued 24 formal investigation reports to management and referred live matters to the Deputment of Justice. At the close of the reporting period, the OlG had 41 active investigations. During the short reporting period, we closed 35 investigations-only 21 less than had been closed by our predecessor office in the preceding one and one half years.

As you know, Mr. Dasid C. Williams has been nominated by the

. Contents President for the NRC Inspector General. Accordingly, this will likely be both my first and last semi annual report as Acting inspector General.

Infinduction 1 Therefore, I would like to take this opportunity to express formally my appreciation for the cooperation afforded me and the other members of implementation of this Office by you, other members of the Comnsssion, and other top thela Legislation 2 agency management. This cooperation was evident in the logistical and Audits 4 other support prosided to establish the OlG, as well as, in the conduct of Summary of our audit and investigative missions. We will continue to work to maintain Audits Completed 5 and foster an effecth'e an productive relationship with agency managers.

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Y' Audits in Progress 7 Imestigations 9 Summary ofSignificant ImtstigaGcas II Appendir 12 Martin G. Malsch inspector General (Acting)

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ntroduction

%e U.S. Nuclear Regulatory Commission (NRC) was established by the l

' Energy Reorganization Act of 19N as an independent agency of the Federal govemment. De five NRC Commissioners are nominated by the President and confirmed by the Senate. De Chairman of the Commis-

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sion is appointed by the President from among the Commissioners i

confirmed.

Re principal mission of the NRC is to assure that civilian uses of nuclear facilities and materials in the United States-as in the operation of nuclear power plants, in medical, industrial or research applications.

UClear and in transportation and waste disposal operations-are carried out

with proper regard and provision for the protection of public health and Rebfato7 safety, of the environment, and of the national security. De NRC COMM/SS/OD i

accornplishes its purposes through a regulatory program which includes licensing of facilities and materials; issuance of safety and security i

standards; inspection of facilities; and enforcement by orders, civil Of[lCe Of penalties, license modifications, revocations, and suspensions. NRC's regulatory oversight extends to over one hundred nucimr power plants De ID8Pector licensed for operation and thousands of licenses for indnstrial, research.

General l

and medical uses of nuclear materials. NRC currrily has about 3.200 employees located in the Washington, DC, area and five regional offices and a budget of about $420 millbn.

This report covers the period from the Office of the Inspector g g dug General's (OlG) inception, Apiil 15,1989, through September 30,1989.

Report As mandated by the Inspector General Act Amendments of 1988 (P.L 100-504), a statutory inspector General was established at the NRC, effective April 15,1989. The new OlG supplanted the former Office of Inspector and Auditor (OIA) which had been responsible for conducting the agency's internal audit and investigative programs. The NRC OlG is a small office. The current stalfing level for the OlG is 26

.t positions, including 13 auditors and seven investigators.

It is important to note that the principal mission of the NRC is l regulation. De NRC does not administer large grants and entitlement

. programs like many of the existing agencies with statutory inspectors General. Accordingly, the imestigations and audits conducted by the

. NRC's Inspector General are directed principally toward improsing program management, assuring the integrity of NRC's regulatory program, and preventing and identifying fraud or misuse of agency Apr/lJ,1988 al reporting period hase addressed program improvements which do n lunds by agency employees. All of the OlG audit recommendations this gEgOMgI s1000 L

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have directly quantifiable monetary savings, but which do contribute to regulatory program effectiveness and integrity, hRC spends about $150 million per year for contracts for technical assistance and nuclear safety research. Much of this has been i

carried out at the Department of Energy's national laboratories.

However, in recent years, hRC has looked increasingly to private organizations for research and technical assistance. Therefore, the OlG l

plans to devote more resources toward financial audits. Specifica!!y, more staff resources are planned to be used to (1) develop a contract audit program, and (2) administer audits performed by the Defense Contract Audit Agency. The latter was pretiously managed by hRC's

- t Office c! Administration. Thus, in future reports, it should be possible to -

t report on monetary sasings.

mplementation of the IG Legislation he OlG has devoted substantial effort in the reporting period toward implementing the requirements of the inspector General Act of 1978 and the Inspector General Act Amendments of 1988. Following are some of the more significant actions completed or in progress:

Legislation and he 1978 Inspector General Act requires each OlG to establish a Regulation Redew program to review existing and proposed legislation and regulations and h'ON#"

make recommendations concerning their impact on the effectiveness of agency programs and operations. The OlG implemented this program shortly after inception of the office by requesting that sigrsficant matters pending before the agency be referred to the OlG for comment prior to final agency decision. Our comments to the President's Council on Integrity and Elficiency pertaining to legislation vesting Inspectors General with testimonial subpoena power are also noteworthy The NRC itself has the authority to compel testimony by subpoena. It was the OlG's strong opinion that it should have testimonial subpoena power in order that the OlG would clearly haw the same investigative powers as the NRC itself. Otherwise an anomalous and potentially onfusing situation results whereby hRC investigative authority will vary depending on whether the investigation is focused on wrongdoing by hRC licensees or waste, fraud, or abuse by hBC employees and contractors.

s Memoranda of De OlG has executed or is in the process of executing Memoranda of Understanding Understanding with the following offices and agencies:

E Office of Personnel-Proside guidelines on the working relationship needed to execute the OlG's independent personnel authority while utilizing the expertise of the Office of Personnel staff.

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j B Office of the General Counsel-Prosides ground mies for prosiding independent legal counsel to the OlG. Diis Memorandum of L

Understanding was executed September 6,1989.

f 5 Office of the Controller-Establishes the necessary budget and accounting procedures and controls necessary to execute the OlG's e

independent budget authority. This Memorandum of Understanding will be effective October 2,1989.

5 Defense Contract Audit Agency (DCAA)-Interagency.

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. agreement on the procurement of services for the audit of NRC L

contracts. He Memorandum of Understanding has been approved by all parties and is being processed for signatures.

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B Office of Administration-Internal procedures to implement the DCAA tigreement and proside for the OlG oversight of the program.

t This Memorandum of Understanding was executed September 28,1989.

Other Initiatives f

B Commission support was sought and obtained for a 15% -

increase in the OlG staffing level (from 26 to 30 FTEs) and a budget of

$2.9 million for lY 1990.

5 An organizational structure was established and a number of key positions have been filled or are pending selection, including the Assistant inspectors General for Audits and Investigations and the

- Planning and Resource Officer.

5 Space modifications and other logistical needs for the OlG to accomplish its mission and accommodate its new organization structure have been completed.-

B Tracking systems to prmide the infomiation necessary to meet the OlG's legislated reporting requirements are in place.

B New criteria ~were developed to prioritize investigations, and all

. pending investigations were resiewed against the new critena and assigned a new priority where necessary.

5 A strong and successful effort was made to reduce the backlog of pending investigations, especially those several years old. In 1

the approximate five month reporting period beginning April 15,1989,35 investigations were closed, compared to only 56 investigations closed during the entire preceding one and one half years.

' B An 010 H0rillNE program is being established, and should be

-in effect early in fiscal year 1990.

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udits During the reporting period, the OlG completed five audits of

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NRC programs. Another 14 were in progress at the end of the reporting period. Following is a summary of results:

Inspector Number of Recommendations General Audit Recommendations For which no management decision was made 1

by the commencement of the reporting period For which a management decision has been 34 madeduring the period For which no management decision has been 2

made by the end of the reporting period l

Prior to the commencement of the reporting period the former Office of Inspector and Auditor (OlA) issued an audit report entitled l

"Use of Consultants at Waterfordl' dated March 12,1985. 7he report examined NRC's contracting for consultants to assist the imestigative team at the Waterford Nuclear ibwer Plant. OLA's audit found that contracting with "allegers" as consultants to proside the agency with L

information on a confidential basis created special problems in process-L ing the contracts due to the need to maintain their confidentiality, OlA recommended agency management prepare a paper asking the Commis-sion's opinion on whether to pursue a policy of paying indisiduals for information as part of an investigation.

No management decision was made regarding the report's recom-j.

mendation by the close of the reporting period. Because the issue l

involved is important to the OlG as well as NRC's Office of Investiga-

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l tions, NRC is delaying resolution of this issue until a permanent inspec-tor General is confirmed. Following the inspector General's confirmation, the OlG, the Executive Director for Operations and the Office of the i

General Counsel will develop a plan and timetable for resohing this recommendation.

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imprmements Our audit of NRC's enforcement program for nuclear power plants Neededin revealed certain waknesses in existing NRC administrative procedures Procedures and a need for improved NRC Headquarter's oversight. The enforcement Govern /ngARC's program is designed to ensure nuclear power plant licensees comply.

Enforrement with NRC requirements and maintain adequate protection of the public s

health and safety. The Commission has the authority to issue significant Pmgram civil penalties against licensees for violation of hRC requirements. While we found that NRC's Office of Enforcement (OE) was doing a creditable job in managing the program, OE needed to improve monitoring of regional office compliance with Headquarter's procedures. Also, we found that OE needed to update and consolidate ceitain enforcement guidance and procedures.

We made six recommendations to agency management including having die Director, OE, institute sampling procedures to determine if regional offices were consistently following agency enforcement policy.

The Executive Director for Operations (EDO) agreed with our recom-mendations and indicated actions would be or had been taken to imple-I hRC Takes Steps Our resiew found a lack of consistency among NRC regional offices in to Standardize reporting findings from NRC's Systematic Assessment of Ucensees lirformance (SALP) program.1he SALP program provides a compre.

Plant Performance hensive evaluation and rating of licensee performance for each nuclear Information i

power plant under construction or operation in the United States. This process results in the only document NRC makes public which compre-bensively rates each nuclear plant's performance. We found, however, that because NRC's five regional offices published SAIP findings in different formats, the resulting reports made it difficult to compare plant performance around the country, We also found that (1) although SAlf ratings are supposed to be used to allocate NRC's inspection resources, l

a system was needed to ensure this process was taking place, and (2) i the time frame to complete the SAIP process varied widely among the regional offices with some regions meeting required deadlines and others not.

We made seven recommendations to agency management.

l Several were directed at achieving a greater degree of standardized l

reporting and providing more comparable information to die public on nuclear power plant performance. The EDO agreed with four of the seven recommendations. An ahemative course of action was agreed to for two of the recommendations.

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The EDO disagreed with one recommendation. This recommendation related to the need for a consistent policy regarding SAff resiews for i

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the need for an unacceptable SAlf rating for these plants.1his recom-mendation was referred to the Commission for resolution on August 25, 1989, and was pending a Commission decision on September 30,1989.

ARCNeeds Better our audit of NRC's incident investigation Program (IIP) determined that Assurance that procedures were not in place to ensure correcthe actions had been Inspect /ons taken by either NRC or power plant licensees to resolve inspection Findings Are findings. Under the llP, a team of NRC inspectors imestigates significant operational events at operating nuclear power plants. whae taking no Resobed at Plants exception with IIP results, we determined that procedures were not in Faperiencing place to follow up on team inspection findings. Consequently, NRC could i

Serious Operating n t ensure corrective actions had been implemented by the licensee.

Mlents We also found changes were needed in the program to assure ndependent review of NRC staff actions taken in response to inspection team findings, especially those findings that were critical of prior staff perfortnance.

We made four recornmendations to the EDO to, among other things, develop more specific guidance to the staff regarding follow up action and close out procedures for llP findings. We also recommended steps to ensure more independent follow up on llP findings that were critical of prior staff performance. The EDO agreed to implement all four recommendations.

ARC Controls for We initiated an audit of NRC's handling of cash receipts as a result of a Cash Receipts referral from NRC's Division of Accounting and Finance. Agency officials Need had found that cash received by an imprest fund cashier could not be Strengthening accounted for. Our resiew identified additional funds unaccounted for.

as well as numerous intemal control weaknesses in the manner the imprest fund cashier handled cash receipts. We also found that certain existing procedures were not being followed.

Our report contained 13 recommendations to agency management to strengthen the intemal controls goveming the handling of cash receipts. Management agreed with 12 of our recommendations and has or is planning to take appropriate action. We agreed with an alternative course of action proposed for one recommendation. In addition, based on the audit findings, an imestigation of the missing cash receipts was initiated (see Chapter on Investigations).

NRCNeeds to Our resiew of NRC's control and management of personal computers Take Steps to identified a number of weaknesses including (1) personal computers Tighten Controls were not being fully utilized; (2) the NRC staff lacked awareness on the Use oI regardng agency personal computer and schww poucM3) roles for Personal ADP coordinators were undefined; and (4) the existing accounting system for software needed improvement. We made five

. Cornputers and recommendations to agency management addressing these and other Solbrare problems found in our review. The EDO agreed with our recommendations and indicated steps had been or would be taken to implement them.

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• lhe following audits were in progress at the end of the reporting period:

5 Resiew of NRC Activities Relating to low level Waste

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Disposal-lhis audit is assessing NRC's efforts to ensure sufficient and

. safe low lewl radioactive waste storage capacity exists in the United

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States.

E Resiew of NRC's Nuclear Documents System-The Nuclear Documents System (NUDOCS) is an agency centered computer assisted system for collecting. inde.xing and retriesing agency documents related to NRC actisities. This audit is resiewing the development and i

implementation of NUDOCS E Resiew of Potential Conflicts of Interest of Contractor's l

~ Performing Work for NRC-This resiew is examining potential conflicts of interest on the part of research and technical assistance contractors working for both the MC and the Department of Energy or regulated utilities.

E Resiew of the Regional Counsel Function-This audit is focusing on the effectiveness of work performance by attorneys assigned to NRC's live regional offices.

E Survey of Operator Licensing-Our survey is evaluating the effectiveness of NRC's program for licensing operators of nuclear power plants.

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i 5 Review of Non SES Performance Appraisals-Diis audit will determine whether the program is being carried out as required.

E Resiew of NRCs Management of Ucensee's Reporting of Defects and Noncompliance-Part 21 Reports-Part 21 of Title 10, Code of Federal Regulations requires NRC licensees and others to report defects and noncompliances associated with component parts used in nuclear facilities. Riis audit is reviewing NRCs actions taken in response to Part 21 reports received.

W Revieveof NRCs imprest Funds-This audit is part of die OlG's ongoing program to assess the adequacy of NRCs imprest fund t

operations.

3 Resiew of Dectronic Publishing and Graphic Senices i

Periormed in NRC-This resiew is looking at the cost effectiveness of contracted senices to perform graphics work as well as the planned acquisition of a microcomputer based graphics system.

i' E Resiew of the Ufectiveness of Parameter,Inc. Contract-Parameter, Inc. has been under contract with NRC for a number of years to supply certain technical expertise to agency inspection teams.

Our audit is examining the awarding and administration of this contract as well as whether it is effective and efficient to contract for this type of support.

E Review of Contracting for Consultants-This audit is resiewing controls over contracting for consultants and the reporting of contractual information on consultants to the Federal Procurement Data System.

5 Review of NRCs Cash Management Practices-We are I

auditing management actions to reduce the amount of cash needed for agency imprest funds.

W Resiew of NRCs Internal Control Systems-The OlG annually evaluates NRCs compliance with the Federal Managers' Financial Integrity Act of 1982.

W Resiew of NRCs Debt Collection and Prompt Payment Process-The audit is assessing whether NRC is paying its bills as required by the Prompt Payment Act and collecting debts in compliance with existing laws and regulations.

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i nuestigations During the reporting period, the O!G received 30 allegations, closed 35

. investigative actions and issued 24 fonnal investigative reports to NRC management. We also referred five matters to the Department of Justice for review.

A summary of our overall investigative prograin for the reporting period follows: ~

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Allegations Numter of Numter of 800fres negatons acgat>ons oyA;jegagjo,,,

NRCEmployee 6

Intervenor I

NRC Management 11 CeneralPublic 6

Congress 1

Media I

Other Government OlGInvestigation Audit 1

Agency 2

Anonymous 1

TUTAL 30 Numter of Numter of Dispos /Ilon i

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Carried Forward 4/15'89 10 Referredfor01G Audit 0 Allegations Received DuringPeriod 30 Referred to NRC Disposition Management:Stalf 0

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ClosedAdministratively 21 Referred to Referred for OlG ExternalAgency 0

investigation 18 1UTAL 39 Itnding Review Action 9 30,89 1

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Numter Numter Investigations Carried Investigations Closed 35

Forward 4/15/89 80 Imestigations Ongoing Investigations Opened 17 9/30/89 62 OmCE of THE LW'EC70R GLvERAl

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ummary ofSignificant Investigations

' An OlG audit of cash receipts received by an imprest fund cashier could 7 heft of Agency -

not account for over $1,800, During our investigation into the matter-Funds the cashier admitted taking the money for his personal use. The employee resigned in lieu of dismissal.

The editor of a Suffolk County news. paper wrote of a possible conflict of Con /llet of interest imching an NRC resident inspector. This inspector was Interest by stationed at the Shoreham Nuclear Power Plant on long Island, New York. The inspector reportedly left the agency to accept employment an ARCIn8Pector j

with the firm that built the reactor at Shoreham. Our investigation found Alleged that both the employee and agency management were in tiolation of NRC regulations governing the negotiation of employment with outside firms. However, we found no esidence to indicate the employee compromised his inspection activities at Shoreham to gain employment with the finn. Management action on this matter is pending.

Based on infonnation prosided by a Security Officer from another Illegal Use of the govemment agency, the 010 initiated an investigation into allegations pf3 that the wife of an NRC employee was placing personal long distance calls through the NRC's Federal Telecommunications System (FFS). Our investigation determined that an agency employee placed a diverter on his government telephone which gave his wife direct access to an FTS line. The wife used this FTS line to place over 2,000 personal calls, including a large number in support of her private business. The approximate cost of these calls was $3,800. Agency action is pending.

At the request of agency management, the OlG opened an inquiry into M/suse of "S76" l

unauthorized calls placed to "976" exchanges over agency telephone Erchanges lines. The "976" exchange is used for reaching recorded messages such as dial a prayer, dial a horoscope, etc. We determined that over 600 prohibited calls were made to "976" numbers over a two month period.

However, because many of the calls were made from vacant offices and after official hours, we could not determine who made the calls.

Subsequent to our inquiry, the NRC restricted access to the "976" exchange through agency telephone lines.

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i Alleged Afisuse of An employee of a nuclear power plant advised one of NRC's regional Information offices that she believed the utility's security force was receising Prmided b}'an advance ini rmation on unannounced inspections by NRC. It was further alleged that this information was prosided by an NRC secretary Li NRCDnployee to her husband, an employee of the utility. The OlG did not substantiate that there was in fact unauthorized information prosided to the utility.

We did find, however, that the opportunity to compromise the integrity of the unannounced inspections clearly did exist. Subsequent to the initiation of our investigation, notification procedures for unannounced inspections at the im'olved nuclear power plant were changed by the Region.

ppendix Audit Reports Ttie Returt No.

() ate of issuance OlG'sResiewof theControl OlG SS410 June 21,1989 and Management of Personal Computers Resiewof NRC's Enforcement OlG87A 20 August 1.1989 Program OlG Resiewof NRC'sincident OlGS1411 August 1.1989 investigation Program OlG Resiewof NRC's Systematic OlG 87A 21 August 15,1989 Assessment of Licensee 4

Performance Program (sal.P)

Resiewof Cash Receipts OlG89A 18 August 28,1989 Received by imprest Fund Cashier i

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t Audit Reports Issued Between October 1, 1989 and January 15, 1990 i

Review of NRC's Implementation of the Federal Manager's Financial Integrity Act 89A-28 12/13/89 Review of the Regional Counsel Function 87A-13 11/30/89 Review of the Management of NRC's Contracts with PARAMETER, Inc.

88A-25 1/2/90 Preaward Audi't of Proposal No.

RS-NRR-89-026 from EGS Corp.

International 11/29/89 Preaward Audit of Solicitation No..RS-PER-336 Submitted by Resource Technical Services, Inc.

11/29/89 Audit of Indirect Rates for Contract No. NRC-03-87-119-03 with Resource Technical' Services, Inc.

12/22/89 Preaward Audit of Proposal No.

RS-RES-89-046 by Battelle Memorial Institute 12/28/89 l

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