ML20128D177
| ML20128D177 | |
| Person / Time | |
|---|---|
| Issue date: | 09/30/1992 |
| From: | David Williams NRC OFFICE OF THE INSPECTOR GENERAL (OIG) |
| To: | |
| Shared Package | |
| ML20128D107 | List: |
| References | |
| NUDOCS 9212070169 | |
| Download: ML20128D177 (41) | |
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IOl0lbfNDUM TO THE CHAIRMAN I am pleased to submit to you our semiannual report,which summatives our l significant activities from Apol 1,1992, through September 30,1992.This sub-l mittal complies with Section 5 of the Inspector General Act of 1978, as amended.
l l During this period, we completed seven audits of the U.S. Nuclear llegula-tory Fonunission's (NitC) programs 1 audit of an NitC contract, and analyzed 50 contract audits asissued by the Defense Contract Audit Agency (DCAA).Our internal audit reports resulted in identifying over $9.6 million as funds that could be put to better use and six recommendations to NltC management. The con-tract audit work resulted in identifying over $3.8 million as funds that could be put to better use and $367,120 as questioned costs. We also completed 4h inves-tigations and 1 inspection concerning the integrity of the fire barrier material known as "Thermo-l ag."
It is encouraging to report that NitC management has continued to provide complete access and cooperation for our investigative and audit initiatives.
There were no instances in which any records or do,uments were denied to my statt. We appreciate the support of NitC management and employees and look forward to continuing our work in enhancing the integrity and accountability of the programs and operations of the NitC.
Sincerely, a C % t.llia-w David C Williams hnpcctor General i
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[ g 5, 8 s EXECUTIVE SUhfA1ARY 4 THE U.S. NUCLEAR REGULATORY COhlhilSSION S THE OFFICE OF THE INSPECTOR GENERAL _ 10 THE FEDERAL AIANAGERS' FINANCIAL INTEGRITYACT _
l1 THE AUDIT PROGRAhi 13 THE INVESTIGATIVE PROGRAh! 22 REGULATORY REVIEW 28 OTHER ACTIVITIES 29 SPECIAL FEA TURE: THE CHIEF FINANCIAL OFFICERS ACT 31 APPENDICES 33 AUDIT LISTINGS 33 ABBREVIATIONS 38 GLOSSARY 39
Encomsvawm AUDITS During the past 6 months, the Office of the Inspector General (OlG) has contin-ued to conduct audits necessary to fulfill numerous legislative requirements,in-cluding those mandated by the Chief Financial Officers Act of 1990. The OlG has also increased its audit effort in the areas of audit follow-up and NRC con-tracting. In addition to this work, the OlG is evaluating three critical areas within the NRC: the safety inspection programs, the automated information programs, and the research program. A summary of the work completed by the O10 during this reporting period is described below.
5 The 01G conducted a broad survey of NRC'sinspection programs as part of its strategic audit plan for Fiscal Year (FY) 1992. The report of this survey pro-vides the foundation for a series of audits that the OlG will conduct over the next several years covering N RC's inspection programs. The report accomplishes two main objectives: (1) it describes in a single document how NRC develops and administers its inspection programs, and (2) it provides detailed information about the allocation and use of inspection resources.
OlG staf rnernbm Anthony Iipuma andI imo Allen da-run audstfund>ngt 1p' m
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l for salary adjustments are projected to increase by 2 percent from FY 1992 to 12Y 1993 but identified no programmatic growth.
O NRC's inventory of completed, but not yet closed, contracts increased from 591 in May 1986 to 829 by October 1991. As a result, over $8 million could have been available for NRC programs, but was unnecessarily tied up as contract obli-gations.The OlG made one recommendation to strengthen NRC's management and oversight of the contract closeout process and two additional recommenda-tions regarding the deobligation of unexpended balances on completed con-tracts.
O The 01G conducted a review of NRC's process for managing allegations concerning potential safety problems in the design, construction, and operation of the Nation's commercial nuclear power reactors. The OlG determined that NRC's process for managing allegations met the intent of Commission policy and NRC guidance. The OlG further determined that both headquarters and regional staff had implemented NRC guidance, O The OlG conducted a budget review of NRC's Office of Nuclear Regula-tory Research (RES) to determine the extent of budget changes and to ascertain why they occurred.The OlG review disclosed that the RES budget has not giown significantly. In fact, as NRC's budget increased in recent ye:trs, RES's portion remained fairly constant resulting in a decreased share of the agency's overall budget. Ilowever, program changes being considered to support advanced reae-tor design testing may increase RES's budget by 513 million or more through FY 1995.
O As required, the OlG conducted a review of NRC's compliance with the Anti-l.obbying Act. The OlG reviewed 65 contract actions over $100,000 that were obligated during FY 1992.The reviewwas conducted to determine whether the required certifications and contract clauses were included in the contract package, where necessary.The OlG found that 3 of the 65 contract actions did not contain the certifications and contract clauses required by the act.
O The OlG reviewed the project management practices in RFS for acquiring services from the Department of Energy (DOE). The OlG found that since 1986, the NRC has disbursed approximately $500 million to DOE for laboratory serv-ices.The disbursements were made without employing the required review and approval process for cost vouchers and without verifying the payments for accu-racy.The OlG made three recommendations to ensure that NRC will review and l
approve cost vouchers and subsequently verify payments to DOE as required 5
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m.w INl'ESTIGATIONS From April 1,1992, through September 30,1992, the OlG initiated 53 new in-vestigations, and closed 47. OlG investigations led to 4 referrals to the Depart-ment of Justice (DOJ), and 60 referrals to NRC management. At the end of the reporting period,51 investigations were still in progress. The OlG continues to receive an increasing number of allegations of wrongdoing that are resulting in some complex investigations, lirief summaries of selected cases follow.
E The OlG conducted an inspection to assess the NRC staff's performance in reviewing and accepting a fire barrier material called "Thermo-Lag."This mate-rial is used in nuclear power plants to comply with NRC fire protection require-ments. The OIG determined that the NRC staff's performance on this matter, and their response to reported piablems with the material over a 10-year period, was inadequate.
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_ s. . ;E E The OlG investigated reports of misconduct and a conflict ofinterest relat-ing to an NRC research project conducted by Sandia Nadunal Laboratog (SNL). Although the investigation revealed no evidence of criminal misconduct, the OlG determined that an organizational conflict ofinterest was involved. An 6
SNL engineer was assigned to work simultaneously on research projects for the NRC and for the nuclear industry.
O The OlG investigated allegations of potential misconduct by NRC employ-ces associated with managing a major contract. The investigators determined that members of a piogram office inappropriately fraternized with contract em- ,
ployees and failed to exercise adequate management oversight of the contrac- l tor's activities.
O Charges of sexual harassment by an NRC manager were mishandled by sen-f or NRC supervisors.The OIG investigators determined that the senior supervi-sors failed to adequately investigate the charges of inappropriate behavior.
O Inspectors from an NRC region allegedly failed to adequately examine ra-diological safety concerns expressed by a former executive of an NRC licensee.
The O'G determined that the alleger's concerns were not adequately examined during a 1990 inspection. A second NRC inspection disclosed inaccuracies in the initial inspection and disclosed a number of violations committed by the licen-see.
L1 The 010 investigated an allegation that a senior NRC engineer converted frequent flyer mileage obtained through official Government air travel to per-sonal use. The OlG investigators determined that, on several occasions, the en-gineer inappropriately redeemed frequent flyer miles in exchange for free airline tickets.
O The NRC Division of Security notified the OlG that an NRC employee was under investigation by the Federal Bureau of Investigation (FBI) for bank fraud.
A+ the FBI's request, OIG investigators provided investigative support to assist in the prosecution of the employee.
7
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COMMISSION l The U.S. Nuclear Regulatory Commission (NRC) was established as an inde-pendent Federal agency by the linergy Reorganization Act of 1974, as amended.
This act, along with the Atomic Energy Act of 1954, as amended, provides the foundation for the regulation of the Nation's commercial nuclear power indus-tIy.
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- y. w q uma ^ : ame._ , . ~ ;-- - :a: = n . j The NRC's scope of responsibility is diverse and complex. Its mission is to ensure that civilian uses of nuclear materials in the United States are carried out in a way that will adequately protect the public health and safety, the environment, and the national security. The NRC fulfills these responsibilities through a system of licensing and regulatory activities. Some of its major activities include- ..
e licensing the construction and operation of nuclear reactors and other nu-clear facilities, such as nuclear fuel cycle facilities, medical use facilities, and nonpower test and research reactors; e licensing the operators of nuclear power and nonpower test and research re-actors:
e licensing the siting, design, construction, operation, and closure oflow-level radioactive waste disposal sites under NRC jurisdiction and the construction.
operation, and closure of the geologic repository for high-level radioactive waste; 8
o inspecting licensed facilities and activities; o investigating nuclear incidents and allegations concerning any matter regu-lated by the NRC: and o conducting the principal Government research prograr on light-water reactor safety.
To carry out its mission, the NRC is headed by five Commissioners who are ap-pointed by the President and confirmed by the Senate for 5-year terms. One i Commissioner is designated by the President to be the Chairman and serves as the official spokesperson for the Commission. The staff, headed by the Execu-tive Director for Operations (EDO), carries out the policies and decisions made by the Commission. The NRC has approximately 3,335 full-time equivalent (l~l'E) staf f in the Washington, D.C., commuting area and the five regional of-fices located near Philadelphia, Atlanta, Chicago, Dallas, and San Francisco.
During FY 1992, the agency operated with an estimated budget of approxi-mately $513 million. The FY 1993 budget is approximately $540 million with 3,377 FFE staff.
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Tue arrics or runinsvecroR GENERAL The NRC's OIG was established as a statutory entity on April 15,1989, in accor-dance with the Inspector General Act of 1978, as amendedin 1988. It is one of 26 such entities within the lhecutive Branch. The inspector General (10) is ap-pointed by the President of the United States with the advice and consent of the Senate. To ensure the independence of the office, the IG may only be removed by the President.who must communicate the reasons to the Congress. NRC's IG reports to and is under the general supervision of the NRC Chairman, but oper-ates with independent budget authority.
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h ,I J One of the primary goals of the OlG is to assist the NRC in operating more effec-tively and efficiently by identifying ways to improve the NRC's programs and op-erations. To accomplish this objective, the OlG, among other things, performs the following activities:
Performs audits and makes recommendations concerning the effectiveness and efficiency of NRC programs and operations:
Conducts, and reports on investigations and inquiries, as necessary, to ascer-tain and verify the facts affecting the integrity of all NRC programs and op-erations:
Recommends policies to (1) promote economy and efficiency and (2) prevent and detect fraud and abuse in the agency's activities; and Keeps the Commission and the Congress fully informed of operational and program deficiencies and problems.
The NRC's OlG was authorized 41 positions for FY 1993 with a budget of approximately $4.6 million.
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Tus nwuna mn,1 Guns nn,tuCm INTEGRITYACT _
The Federal Managers' Financial Integrity Act (FM FI A) was enacted in 1982 in response to continuing disclosures of waste, loss, unauthorized use, and misap-propriation of funds or assets associated with weak internal control and account-ing systems. Congress believed these abuses hampered the effectiveness and ac-countability of the Federal Government and eroded the public's confidence in Government. The FMFI A requires Federal managers to establish a continuous process of evaluating, improving, anJ reporting on the internal control and ac-counting systems for which they are responsible. On an annual basir, the N RC is required to disclose any material weakness (see Glossary)in its financial man-agement to the President and the Congress.The OlG is required to report on the agency's compliance with the FMFIA at the end of each calendar year.
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In its 1991 FM FI A report to the President and the Congress, the NRC repor ted that the management of contract work placed with the DOE laboratories re-quired improvement to adequately protect NRC's business interests. NRC at-tributed the deficiencies in this area to the lack of an agency-wide standard for contract management.
A recent 01G audit revealed that NRC failed to implement the require a: . iew, approval, and verification process for more than $500 million in payments to DOE for laboratory services over a 6-year period, Th.refore, the NRC has no assurance of billing accuracy for the ser ices that DOE rendered. NR("s 1i
position has been that this is a minimum risk aiea because DOliis another Fed-eral agency.
In addition, as a result of this OlG audit, the NRC initiated a review of its Doli task orders. Over 300 task orders were identified as candidates for closure with an estimated $1.4 million in funds that could be put to better use if deobligated.
In another audit, the OlG identified a major b cakdown in the agency's imple-mentation of a process for closing out completed commercial contracts. This breakdown resulted in over 800 completed contracts with an estimated $8.1 mil-lion in unexpended funds that could be put to hetter use if they were deobligated.
The NRC's Chief Finar cial Officer (CFO) has taken a very active role in moni-toring the actions recommended by the OlG to correct problems in the financial management area. Additionally, NRC is currently in the process of clarifying to senior managers what it considers to be a material weakness (see Glossary).The goal is to preclude officials from narrowly interpreting a material weakness and thus not reporting serious probie' e that require management attention.
The OlG is continuing to oversee these and other programs operating under the requirements of the FM FI A. The OlO will issue a separate report in December 1992 that will address OlG findings on NRC's compliance with *he FMFI A.
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Tusavoirvuoanau in the previous reporting period, October 1,1991 through March 31,1992, the OIG reported that the agency did not complete corrective action on recommen-Jations contained in two audit reports.The first report concerned recommenda-tions to deter the unauthorized use of the Federal Telecommunications System.
Although the NRC initially expected to complete its study by June 1992,it is still reviewing the cost effectiveness of the OlG recommendations. The revised .
schedule calls for the study to be completed in cady Calendar Year 1993. In the second report, the 010 recommended that NRC develop an automated license fee billing system. The NRC still enpects to complete development and imple-mentation of this system in early FY 1993.
During this reporting period, the OlG completed seven audits addressing the NRC's administ. tive and programmatic functions, completed one audit of an NRC contract, and analyzed 50 contract audit reports that the DCAA issued.
The internal audits resulted in six recommendations to NRC management and the identification of $9,695,281 as funds that could be put to better use.The con-tract audit work resulted in questioning $367,120 and identifying an additional
$3,808,308 as funds that could be put to better use. Summaries of the propum audits follow.
A UDIT SUMMARIES NRC Compliance with the Anti Lobbying Act; Section 319 of Public Law 101-12.;
The Anti-Lobbying Act requires that the IG provide an annual report to Con-gress regardinc, the NRC's compliance with its provisions. Section 319 of the act requires each person who requests or receives a Federal contract, a cooperative agreement, a loan, or a Federal commitment to insure or guarantee a loan, to disclose whether they used appropriated funds to lobby for the specific contract.
The law applies to awards of contracts, grants, or cooperative agreements ex-ceeding $ 100,000. Each person who requests consideration for an award or actu-ally receives an award must file a certification or disclosure form regarding any lobbying effort.
The OlG reviewed 65 FY 1992 contract actions that exceeded $100,000 to deter-uine whether the required certifications and contract clauses were contained in each contract package. The OlG found that 3 of the 65 contract actions did not contain the certifications and contract clauses required by this ast. One possible i
cause for their omission was that the odginal estimate of the contract action was less than $100,000, which meant that the certifications and contract clauses required by the act were not needed. When the negotiations were completed.
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however, the contract actions exceeded $100,000 and thus required the neces-sary certifications and clauses. The contract negotiators did not revisit the need for the certifications and clauses and did not add them.
3 In response to OIG's 1991 report on contracts exceeding $100,000, the NRC modified the checklist used by its contract administrators to determine which documents or clauses may be required as a resuh of a contract modiheation but did not modify the contract negotiator's checklist. As a result of the recent OlG review, NRC modified the negotiator's checklist to correspond to the adminis-trator's checklist.
Survey of NRC's inspection Programs The 01G conducted a broad survey of NRC's inspection programs. The inspec-tion nrograms are one of the primary methods by which NRC ensures that licen-sees ar e adhering io regulatory requirements and industry standards. This survey was conducted as part of OlG's strategic audit plan for FY 1992.The results of the survey will be used to identify pctentialissues for future audits. It describes in a single document how N RC administers and allocates resources among its many inspection programs. The survey report accomplished two objectives.
First. it documents how NRC develops and manages its inspection programs.
The report describes NRC's inspection programs for power and nonpower reac-tors, vendors, and reactor construction. In addition, it outlines the Office of Nu-clear Material Safety and Safe; ards' licensee inspection programs for fuel fa-cilities, materials, transportation, safeguards, low-level waste, and uranium re-covery.
i Sewnd, the report gives detailed information about the allocation and use of inspection resources. This information goes beyond the data presented in either NRC's Five-Year Plan or its formal budget documents by isolating resources for inspection from resources for other activities, such as licensing. This body of work provides the foundation for a series of inspection audits that will be per-formed during the next several years.
OlG Review of Budget Changesfor NRC's inspection Programs The report of the Senate Committee on Approprianons that accompanied the NRC's FY 1992 appropriation expressed concern about yearly increases for NRC's programs. The Comrnittee questioned the need for "across-the board in-creases in all mission areas" and directed the Commission to conduct an external
, review of these increases.The Commission subsequently requested that the 010 review and report on budget changes in NRC's inspection programs.
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. The OIG reviewed and compared the NRC's FY 1992 estimated budget with the FY 1993 requested budget for inspection programs, The review revealed that budgeted costs for inspection portions are projected to grow $2.3 million i (2 percent) from FY 1992 to FY 1993. This increase, however, is for salary ad-justments and not for programmatic growth, in fact, both staffing levels and pro-gram support (contract) costs are projected to decrease for reactor inspection programs. In NRC's materials and low level waste inspection programs, staffing levels will decrease slightly, while program support costs will remain constant.
Review ofNRC's Contract Closcout Process l The closeout of a completed contract is basically the process of gathering all es-
- sential documents reflecting the completion and satisfaction af a wide list of ob-ligations that are created during the course of the contract, Contract closeout is j normally completed by the submission of a final invoice by the contractor and its acceptance and payment by the NRC.
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- The NRC's backlog of completed but not yet administratively closed contracts
- increased significantly since the issuance of an October 1987 report on this sub.
ject. Although NRC obtained a contractor in April 1990 to assist in reducing the backlog, only limited progress was made. NRC's inventory of completed but not yet closed contracts increased from 591 in May 1986 to 829 as of October 1991, Many of these contracts had been completed for several years and were valued
- over $100,000. As a result, the OlG estimated that over $8 million in contract obligations could be made available for use in NhC programs.
The OlG concluded that the backlog would continue to remain unacceptably
{ high unless NRC takes aggressive managerial action to improve its oversight of the contract closecut process.The OlG recommended that NRC strengthen its i- managerial oversight of this process and made two other recommendations about the deobligation of unexpended balances on completed contracts.
Review ofNRC's Allegation Management System
- j. In the early 1980s, the Commission recognized a need for a more systematic and structured process for handling allegations. This was especially important for al-legations that were made to the NRC at the end of the licensing approval proc-ess. As part of this recognition, the Commission issued policy statements on
" late-filed" allegations and matters of confidentiality concerning the individuals making them. Additionally, the Commission wanted to ensure that allegations that involved potential wrongdoing issues were effectively tracked and investi-gated.
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In late 1982, responding to the Commission's concerns, NRC managers estab-lished the Allegation Tracking System (ATS) as a mechanism to track the large number of allegations that NRC was receiving. Previously, the NRC did not have a system to address and manage the flow of allegations it received. The system was subsequently renamed the Allegation Management System (AMS).
The OlG conducted a review of the allegation management process and con-cluded that (1) NRC's proc;ss far managing allegations met the intent of the Commission's policy;(2) the agency's expectations were clearly documented in NRC guidance, and (3) both headquarters and regional staff had implemented the guidance.
Hudget Changes in the Office ofNuclear Regulatory Research As noted previously, the report of the Senate Committee on Appropriations that accompanied NRC's FY 1992 appropriation expressed concern about NRC's budget increases, including requests for increased research funding. The report directed the agency to conduct an external review of this growth. The Commis-sion subsequently ask:'d the 010 to review and report on increases in NRC's research budget.
The Office of Nuclear Regulatory Research (RES)is one of three NRC offices established by the Energy Reorganization Act of 1974, as amended.The act di-rects RES to identify research needs and contract with "arious organizations to conduct research in support of NRC's licensing and related regulatory functions.
Most of RES's $119 million budget for FY 1992 will be used to support about 670 research projects.
The OIG review disclosed that RES's portion of NRC's budget has not grown significantly;in fact, as NRC's budget increased in recent years, RES's portion remained fairly constant, resulting in a decreased share of the agency's overall budget. While the budget for some of RES's various program elements have in-creased, its 3-percent budget growth rate has been about half that of NRC's overall budget grow *.h rate.The OIG review, however, also noted shifts in RES's budget that could lead to future increases. For example, NRC and the nuclear industry are developing a scale model testing program to support advanced reac-tor dcaign certification. The testing program could increase NRC costs by more than $13 million through FY 1995.
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Improvernent Needed in NRC's Processfor Approving Payrnents to D0s l 3
in December 1991, the OlG initiated a review of NRC's contract management practices relating to the senices DOE provides. The audit revealed that since 1986, the NRC has paid about $500 million to DOE without employing the re-quired review and approval of DOE cost vouchers and subsequently verifying the accuracy of the payments.
This failure to follow statutory and prescribed agency policies and procedures is a serious breakdown in internal controls that leaves NRC vulnerable to fraud, waste, and abuse. Until corrected, the 010 believes this condition constitutes a material weakness in the agency's internal controls over disbursements to DOE.
Subsequent to the OlG exit briefing on the results of the review, NRC manage-i ment (1) directed that corrt " actions be made and (2) notified the OMB that the agency will identify the '. . .agement of agreements with DOE as a material weakness.
NRC management disagreed, however,with one of the three OlG recommenda-tions concerning the final posting of payments to the accounting system. The OlG stated that although program offices have delegated responsibility for the review and approval of payments, the Office of the Coatroller is ultimately re-i sponsible for ensuring that vouchers are verified as correct for payment before their final posting to the accounting system. The agency's followup official is cur-rently reviewing the disagreement.
- .1UDITS IN PROGRESS O Review of IRM's Oversight of its Commercial Contracts-Many of the in-formation resources services provided by the Office of Information Resources Management (IRM) are performed by contractors; in fact, contractors perform the majority of these senices. These contracts account for a large percentage of
-IRM's overall budget. The objective of this review is to assess the adequacy of IRM's oversight of its contracts. The OlG will evaluate the various controls and processes that IRM uses to manage its contracts.
O Review of NRC's Computer Security Program- As part of an ongoing audit -
of NRC's IRM contract management practices, the OlG examined the results of an independent compliance review of NRC's computer security program. The OlG is assessing the status of NRC's actions to implement the recommendations that resulted from the review.
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E Review of the Management of NRC's Research Program-During this review, the OIG will assess the adequacy of the procedures NRC and the Of fice of Nuclear Regulatory Research use to ensure that NRC conducts necessary and beneficial research. This audit responds to concerns about program cost in-creases expressed in a Senate Appropriations Committee Report on NRC's FY 1992 appropriation request and by NRC's Chairman.
W Review of NRC's Budget Execution Process-The objective of this review is to determine whether NRC's budget is being executed in an efficient and effec.
tive manner. It willinclude an examination of the methods the NRC employs to maintain administrative control over its appropriated funds and an assessment of the N RC's ability to execute its budget according to the original budget planning assumptions.
B Re"iewof the Management of the Work Placed with DOE's National 1. abo-ratories-The review is assessing the adequacy of NRC's administrative man-agement practices for closing out completed projects rnanaged by the Office of Nuclear Regulatory Research.
M Review of NRC's Policies for Deferring Materials inspections-The OlG initiated this review to follow up on a programmatic issue raised by an OlG in-vestigative report. In the investigative report, the OlG noted that a licensee was not inspected annually, as required, because a regional office believed that no licensed activities were underway. In effect, the required inspections were de-ferred for several years. O10 subsequently learned that the licensee was, in fact, conducting licensed operations. OIG is therefore reviewing the adequacy of NRC's poli;ies and procedures for deferring materials inspections.
N Followup Review of the Atomic Safety and I.icensing Hoard Panel (ASI.BP)-In June 1990, the O10 issued a report on its review of the functions and operations of the ASLBP. The report contained seven recommendations:
five to the Chief Administrative Judge, ASI.HP, and two to NRC's Executive Di-rector for Operations. This follow-up reviewis to determine whether (1) the rec-ommendations have been implemented and (2) the resulting actions meet the intent of the report.
R Review of NRC's Policy and Practice Regarding the Use of Frequent Flyer Benefits-This audit is to determine whether NRC's policies and practices en-sure that frequent flyer benefits resulting from official travel are used for the agency's economic benefit.
18 i
_ . _ _ _ - _ _ _ _ - - _ _ . . _,_ _ . - . ~ . . _ _ . . _ . . _ _ _ _ _ . _ _ . _ _ - __
ll O Review of NRC's "M" Account-The 010, with the support of contracted services,is conducting a review of certain aspects of NRC's prior fiscal year fund accounting The audit objectives are to examine the composition of the "M" ac.
- count (see Glossary) and NRC's oversight of it.
A UDIT TABLES The NRC's dependence on commercial contract activity is relatively small.Thus, questioned costs and savings are inherently smaller than those reported by most other agencies, During the reporting period, the O10 analyzed 50 contract audit reports issued by the DCAA and performed one audit of an NRC contract. The fol!owing tables depict the cost savings from this contract work and two other ,
I internal audits.
4 1
l 1
/
1 I
f 19
e f Table I i Office of the inspector General j Reports Containing Questioned Costs (Dollar Value)
! Number of Questioned Unsupported 1
Reports Reports Costs Costs i J A. For which no management 1 33,876' O decision had been made by the commencement of the i reporting period i B. Which were issued during 2" 367,120 0 the reporting period l Subtotals (A + B) 3 400,996 0 '
C. For which a management 2 762 a decision was made during the reporting period:
(i) dollar value of disallowed 2 762 0 costs (ii) dollar value of costs not 0 0 0 disallowed D, For which no management 1 366,358 0 decision had been made by
- the end of the reporting period E. For which no management 0 0 0 decision was made within 1 i 6 months of issuance
'The beginning figure of $33,876 was reduced to 0 after further discussion with 1)CAA.
3 "The figure differs from the number of postaward contracts reviewed because i I audit reports resuhed in no questioned costs. {
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i 20
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Tun,winr vuoca,w Table 11 Olliec of the inspector General lleports issued With Ilecommendations That Funds lie Put to Detter Use Dollar Number of Value Reports Reports of Funds I
A. For which no management decision had 2 72,020 been made by the commencement of the
, reportmg permd
- 11. Which were issued during the reporting period 9" 13,283,80P 11 13,355,826' Subtotals (A + B) i C For which a management decision was made 7 10.880,146 during the reporting period:
7 10.880,146 " *
(i) dollar value of recornmendations that were agreed to by management (ii) dollar value of recommendations that were 0 0 not agreed to by management D. For which no management decisit ad been 4 62,840 made by the end of the reporting period E. For which no management decision was 0 0 made within 6 months of issuance
' Dollar figure contains the aserage cost savings for four different contracts that have not been awarded.
l * *Thirlpone other pre-award audit reports reported either zero funds were available for better ose or no contract was awarded.
"*he reported savings on one contract was eventually reduced during the negotiation phase because of additional proposed coss submitted by the contractor that were concurred with by DCAA.
21
_ = - -. ._ - _ ._..._._ __ _ _._ _ _ _ _._ _ _ _
llE INVESTIGATIVE PROGRAM i l
During this reporting period, the OlG received 161 allegations. initiated 53 new investigations and closed 47 cases; 4 referials were made to the Department of Justice and 60 to NitC management.The next section presents summaries of the OlG's most significant investigatiota. '
INVESTIGATIVE CASE SUMMARIES i l
Inspection of NRC StaD's Review and Acceptance of Fire Harrier -
Material The NitC received an allegation that questioned the capabilities of a fite barrier l material commonly used by the nuclear industry. The material, Thermo. Lag,is installed in a majority of the Nation's power plants to satisfy NitC fire protection ;
requirements. '
ilecause of the widespread use of this material since 1981, the OlG conducted an inspection to assess the adequacy of the NitC staff's review and acceptance of Thermo lag. In addition, the inspection assessed the staff's response to prob- i lems with Thermo lag reported to the NitC over approximately a 10 year period.
The 010 inspectors determined that the NitC staff did not conduct an adequate reviewof the fire protection capabilities of Thermo ' ag and other related infor-mation, if the staff had conducted a thorough reviewof thisinformation and veri-fied test reports submitted by the nuclear industry, a number of problems with the test program and Thermo l.ag would have been discovered, llecause the-NitC had not conducted the proper reviews and ir,spections, the staff did not de.
termine until 1991 that Thermo Lag might not meet NitC requirements, in ad- ;
.dition, the NitC did not take substantive action between 1981 and 1991 when l NitC received reports of pron. ems with Thermo l.ag.
The OlG inspection disclosed at least seven instances in which NitC staff failed to pursue nossible problems with Thermo Lag. As a result of the inspection, a l commission directed task force is currently addressing the find;..gs of the 010 report.
22
-__ _ . _ . - . . _ _ . _ . . . _ . _ . _ . . _ _ _ . . _ . _ _ . _ _ _ _ . _ . _ _____...___-.1
Investigators Hilliam ).
Stryler and Robert A.
Hurlins attend un UlG wnferrne v.
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Alleged Conflict ofInterest ifith a Sandia National Laboratory Contract The NitC staff reported a potential conflict of interest relating to an NitC re-search project at the Sandia National Iahoratory (SN1.)in Albuquerque. New Mexico. An SNI. engineer formerly assigned to the NitC project continued serv.
ing as a technical reviewer af ter being reassigned to a Department of linergy (IX)li) project benefiting the nuclear industry. It was also repor ted that the engi-neer inappropriately obtained NitC resea ch information to prepare an industry report. 010 determined that the NitC project mam:ger requested the engineer's i y continued participation in the NitC research program even though the NitC program was to have been separate and distinct from the DOE project. The pro-ject manager failed to obtain a waiver for a conflict of interest as required by NitC policy.
The 01G has not determined whether the information exchanged by the SNI.
engineers constituted personal misconduct. Ilowever, OlG concluded that SNI.
created an organizational conflict ofinterest by allowing an engineer to work simultaneously for the industry and the NitC on similar research projects.
NRC Ernployees Counseledfor Fraternizing ifIth Contractors The OlG received allegations that certain employees assigned to a program of-fice were involved in inappropriate activities during the course of theli work, it 23
_ . - - _ _ - __ _ = _ = - . _ - -- -_ - - - --- _-_ _ _- .-- _
1 i
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was alleged that the employees were guilty of time and attendance abuse, had developed an inappropriate relationship with a contractor, and had failed to ex-
) ercise proper oversight responsibilities during their management of a major j NI(C contract.
The investigation confirmed that the employees attended luncheon meetings with contractor employees. Some of these meetings lasted several hours and in-ciuded the consumption of alcohol. The investigation further determined that ,.
inadequate management oversight by these NRC employees allowed the con-l tractor to purchase several types of automated data processing equipment with-out prior approval of the NRC contracting officer as mandated in the contract
- terms.
4 The employees were counseled by NRC management, and one received a letter
, of reprimand and was relieved of supervisory duties.The Division of Contracts
- and "roperty Management, in concert with the program office, developed a 3 '
training curriculum designed to cover acquisition procedures and ethical con-duct relating in procurement.
1
, Allegations of Sexual Harassment Against an NRC Manager An NRC program office notified the OlG after a female employee complained
- of several incidents involving sexual harassment and the handling of the inci-dents by NRC managers. 01G investigators determined that an NRC manager
! made repeated advances toward a female employee that she found offensive.
1)espite her attempts to discourage the manager, his behavior continued. It was i
also determined that cognizant supervisors failed to appropriately address the issue when it was reported to them. The 010 investigative report was sent to
- NRC management for possible administrative action.
inspection of Radiological Safety Concerns Found inadequate and Incomplete i
The OlG investigated allegations that staff from an NRC region failed to ade-quately address safety concerns brought to their attention. A former executive of a nuclear industry consulting firm advised the OlG that NRC inspectors per-formed an inadequate and incomplete inspection of rcported radiological safety violations by his firm, an NRC licensee.
The 01G determined that the alleger's concerns were not adequately examined
, during a 1990 NRC inspection. The NRC inspectors did not interview witnesses purportedly capable of corroborating the alleger's claims and did not examine I
key documents disputing certain assertions the licensee made. The regional ctaff 24
conducted a second inspection that revealed inaccuracies in the report of the in-itial inspection and disclosed a number of violations by the licensee.
The OlG investigative report was sent to NitC management, and a task foice is I being convened to address lessons learncJ in connection with this matter. j Alisuse of Frequent Flyer hiilcage by an NRC Enj;incer
'I he OlG received inf ormation that a senior NRC engineer repeatedly converk d frequent flyer mileage accumulated through ofhcial Government air travel to personal use, investigators determined that the engineer inappropriately re-deemed frequent flyer mileage credit on nume ous occasions to obtain bonus tickets for personal airline travel, which included foreign travel. The accumu-lated value of the personal travel was approximately $10.750.
'I he U.S. Attorney, llattimore, Maryland, declined prosecution of the engineer in lieu of administrative action by the NRC As a result ofIhis and several simihir investigations. the OlG audit stall is ieview-ing the NP program for the use of travel benefits to reduce the cost of Gosern-ment travel.
Alleged blank Fraud by an NRC Ernployce The NRC Division of Security notified the OlG that an NRC employee was un-der investigation by the I Ill for an alleged violation of Title 18, United States Code, Section 1344 (llank 1 raud). At the I lll's request. OlG investigators pro-vided investigative support that aideJ in the arrest of the employee. I ollowing the employee's arr est, the OlG provided background information about the em-ployee involving a similar prior ollense that was not previously available to the pretrial service officer.The employee resigned from the NRC soon after being arrested and is currently awaiting 1:ederal prosecution.
e j IN1liSTIGATIl'Is STATISTICS ,{
AllEGA110NS Sour ce Number ,
NRC employe 34 NRC management 34 Congress .
1 Other Government agencies 6 Interrenor 16 General public 18 Media 1 0 0 investigation or audit 3 Contractor 0 Regulated industry (licensee / utility) 33 Anonymous J3 Total 161*
'Of the 161 allegations. 27 resulted from hotline calls.
Allecations Number Carried forward from previous period 0 Received during this peliod 161 Total 161 Disposition Number Closed administrativelv 24 Referred for 010 inveistigation or inspection 74 Referred for OlG audit 0 Referred to NRC management and staff 60 Referred to external agency 3 Pending review or action l)
Total 161 26
e
?! INVESTIGA TIONS
-g Status of Investipations Number l'endine IK)] action 5 DOJ declinations 4 Indictinents and arrests 1 Convictions 0 l'FCitA referrals 0 Total 10 NRC AlMiINISTib1TIVE ACTIONS Status of NitC Actions Number Terminations and resignations 4 Suspensions and demotions 2 Other administrative actions D Total 19 Carried in Classification of Investigations Over Opened Closed l'rogress A - Con 0ict of interest 3 5 1 7 11 - Internal iraud 8 5 10 3 C - Contract / contractor related 2 5 3 4 misconduct D - Falsification of records or 4 2 3 3 statements li - Theft related offenses 1 7 6 2 1 - Niisuse of Government 1 0 1 0 property G - liinployee inisconduct 6 7 6 7 affecting NitC programs II - Managernent misconduct 12 15 9 18 and abuse I - Other 8 7 8 7 1 _
Total 45 53 47 51 27
l liGUliiTOR1' RlWiliW I he linpector General Act of 1978, as amended, requires the 10 to review exist-ing and proposed legislation and regulations and to make secommendations in the semiannual report concer ning their impact on the economy and ef ficiency of the administiation of the agency's programs and ope ations and on the preven.
tion of f raud, waste, and abuse. In carrying out itsiesponsibilities under Section 4(a), the ()lG reviewed numerous initiatives.
The Ol(i provided comments on draft NitC management directives in several topic areas. The directives are the agency's central referencing system. They provide information on responsibilities and processes for NitC's major programs. liefore publication, the NRC submits the draft directives to the 01G for ieview and concur rence The following directives wars anted OlG conunent.
'I he proposed directive on the 1:reedom of Information Act (I OI A) procedures reqmred clarification of the OlO I:OI A denial and appeal authority. Specifi.
cally, the ()lG requested that its 1 OI A function be segregated and that more detail x provided in the directive concerning the OlG l'OIA processes.
As a result of OlG's conunents, the draft directive on implementing the llatch Act was revised to more coriectly identify the investigative and repoi ting iespon-sibilities of the OlG and coordination by the 010 with the Of fice of the General Counsel. In addition, the 010 provided extensive comments on the drait directive on "NitC Procedures and Management Controls for Placement and Monitoring of Work With the Department of 17.ncigy. These remaiks focused on the need Ior clarifying NitC's procedures for controlling and monitoring the contract work placed with the Department of linergy.
In addition, the 010 provided an assessment of the impact of the proposed
" Contractor 1.icensing Reform Act of 1992." Specifically, the OlG noted the need f or ( l) establishing adequate criteria f or conducting the requir ed audits and (2) identifying the scope of the subject area concerning the audit of possible circumventions of personnel ceilings.
28
Till!R ACTIVITiliS During this reporting period, the OlG has engaged in several activities to en-hance the perf ormance of its audit and investigative responsibilities. litiel sum-maries of the activities follow.
Legal Update Sctninar The President's Council on Integrity and lif ficiency Investigative Standards and Training Subcommittee, chaired by the NRC's IG, sponsored a lxgal Update Seminar during the first week of September 1992.The seminar, held in Washing-ton, IM '. brought together senior OlG investigators,010 attorneys, and ac-complished instructors f rom the Department of Treasury's Federal law lin-forcement Training Center. The purpose of this conference was to provide the IG cortinluntly with currerli updates and chariges regarding iecent cotiri deci-sions and legislation in selected topic areas.
T" ?, l'ar ticipants in Ihr yt 'll: Atanslartis and 1 raining hul. commit.
Irr latall julate Armi.
nar tsrptrmbro IVVll.
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, $, ^N . t The seminar featured a 2 day program that was tailored to the needs and inter-ests of the attendees. Ilighlights of the session included briefings on evidence, entrapment, and electronic surveillance. Individuals participated in selected briefings and then joined together for a half-day plenary session on civilliberties.
'I he plenary session addressed the current status of applicable civil statutes and case law relating to the vulnerability of the executive manager to civil suit.
OlG Planning Conference in September 1992, the second annual 010 Planning Conference was held at the Ilyatt itegency in liethesda, M aryland. The conference was designed to focus on 29
l l
l l
l I
issues that will affect the NftC in the coming years and to assist the 010 audit stali in structuring its annual audit plan. 'l his year's conference focused on the growing importance of performance indicators and how these unique manage-4 ment tools could be developed to assess the NitC's elfectiveness. llecause of re-cent legislation, specifically the Chief Financial Of ficers Act and its mandated j requirement for performance measuses, the IG is particularly interested in how l NitC perceives these indicators.
NRC l^secutive Dirretor i
for Operations, James Af.
laylor trenterb rathangen ideas with ranti mwdwr kolort Al. llernrru trixht) .
~
and Ali. John Hidalgo. .
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Through a series of panels, various perspectives were presented. The first panel addressed the views of NitC's senior managers on performance indicators, while the second panel presented the views of the utility industry on license renewal.
The final panel provided thoughts from the Office of Management and lludget (OMil) the Congress, a public interest group, and a nuclear medicine profes-sional association regarding NitC's regulatory process.
10
Sveciat vissrvan Tills CillliF FIN <tNCli11, OFFICliRS <tCT OF 1990 in November 1990, Congress passed Public law 101-576, the Chief Financial Of ficers Act of 1990. The purpose of the act is to bring more effective general and financial management practices to the Federal Government. As a result, each esecutive department and major executive agencyin the Government is re-quired to have a Chief Financial Officer (CFO). Ileginning in 1992, and every year thereafter, each agency is required to prepare and submit a financial state-ment for the preceding year to 0h111. The statements are due no later than hiarch 31 each year.
The Director of ONillis iesponsible for prescribing the form and content of the financial statements consistent with applicable accounting principles, standards.
and requirements. liach agency's financial statements wi;l reflect its (1) overall financial position,(2) results of operations. (3) cash fhiw or changes in financial position, and (4) reconciliation to its budget.
The act Iurther specifies that the financial statements prepared by an agency will be audited in accordance with generally accepted Government auditing stan-dards by the 10 or an independent exter nal auditor, as determined by the IG. An audit report on the financial statements is required by June 30 following the fis-cal year for which a financial statement is submitted. The audit report will be made up of at least the following three parts:
e a report containing an opinion as to whether the agency's principal state-ments, including the notes to the principal statements, and the combining statements are fairly presented in all material respects in accordance with ap-plicable accounting standards; e a report on internal controls; and e a report on compliance with applicable laws and regulations, including an assessment of the process by which the agency identifies and evaluates weak-nesses required to be reported under the FhiFIA.
Agency CFOs are also responsible for preparing annual reports and transmitting them to the agency heads and ONill. These reports are due within 60 days of the submission of the auditor's report on its audit of the annual financial statements.
The CFO's report should include the following information:
e a description and analysis of the status of the agency's financial management; e the annual financial statements and audit reports prepared under the act:
e a summary of the reports on internal accounting and administrative control systems submitted to the President and the Congress under the FN1FI A: and 31
l l
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e other inlormation the agency head considers appropriate concelning agency financial management.
To emphasize the significance of NitC's lhecutive Diiector for Operations *
(lido's) tole in financial management, the lido is the agency's appointed CI:0.
Since the NitC Controller has the authority for most of the agency's day-to-day -
financial management activities, the Controller's position is designated as the Deputy CI'O (DCI:0). As a result, the CI 0, assisted by the deputy, is responsi-ble for the following Cl:0 act-related duties:
e developing, maintaining, and over eeing the implementation of policies, procedures, and standards for carrying out all financial management activi-ties; e developing and maintaining an integrated agency accounting and financial management system:
e monitoring the financial execution of the NitC's budget and submitting timely performance reports to the Chairman; e preparing agency financial statements;
. ensuring that these financial statements are auditable; and e preparing the annual report.
The NI(C's Of fice of the Controller (OC) has complemented its existing staf f by adding individuals who possess significant Government financial management experience. OC has also obtained the services of an independent certified public accounting firm to assist in preparing the agency s financial statements.
As a result of the CI O legislation, the NitC must ensure that its internal controls are in place and are operating as intended. The OlG has established a financial management audit team whose purpose is to review the financial management controls within the agency. This team places the OlG in a position to assist the agency in implementing the provisions of the act. Guidelines have been formu-lated that will allow the OlG to advise the agency on matters affecting the prepa-ration of the financial statement while maintaining OlG independence.
The OlG has also obtained the services of a certified public accounting firm to assist in reviewing the financial management practices within the agency. This assistance ensures that key financial areas will undergo a thorough review as the agency prepares and issues its audited financial statements in accordance with the reqmrements of the act. NitC's management and the OlG are working together to ensure that the goals of the Cl:0 act are successfully achieved.
32
1 PPENDICES AUDIT LISTINGS INTERNAL AUDITImi' ORTS Date Title Number 04/03/92 Review of NRC's Allegations OlG/91A-07 Management System 05/01/92 Iludget Changes in the Office of OlG/92A-03 Nuclear Regulatory Research 05/01/92 Iludget Changes in NRC's inspection OlG/91A-13A Programs (vi/26/92 Review of NRC's Contract OlG/92A-04 Close-out l'rocess 07/27/92 Survey of NRC's inspection OlG/91 A-13 l'rogram 08/17/92 NRC's Compliance with the Anti- OlG/92A-14 Imbbying Act, Section 319 of l'ublic law 101-121 08/31D2 Improvements Needed in NRC's OlG/92A-08 l'rocess for Approving Payments to the Department of Energy 33
I CONTRACTAUDITIWPORTS Funds Questioned Put to O!G Costs lletter Use issued Contractor (Dollars) (Dollars) 4 (M/06/92 llernard liodes Advertising 0 RS-PER-91-322 (H/17/92 ERC Environmental Services Co. O NRC415-84-160, NRC-415-84-151:
NRC415-86-155: NRC415-86-1584X12 04/17/92 United Engineers & Construction 0 NRC-33-83-311 (4/17/92 Science & Engineering Associates 0 NRC-33-83-407 04/17/92 Science & Engineering Associates 762 NRC-33-83-407 04/17/92 Science & Engineering Associates 0 N RC-33-84-407 04/17/92 Washington Data Systems, Inc.
' O RS-IRhl-92-173 05/01/92 Southwest Research Institute 3,494,758 NRC412-884X)5 OlG/92A4)9A 05/04/92 Analytical & Research Technology 0 RS-1Rht-92-203 05/05/92 Ruland & Associates (Subcontractor) 0 RS-IRhl-92-203 05/11/92 Technology Applications, Inc. O NRC-33-85-330 05/13/92 Systems Automation Corp. O RS-IRht-92-203 05/13/92 Creative Associates internationai 0 RS-IRM-92-203 05/13/92 R.S. Data Systems, Inc. O RS-IRM-91-203 05/13/92 American Management Systems 0 RS-IRM-92-203 05/20/92 Duffalo Material Research 366,358 NRC4H-84-102 05/20/92 Applied Management Systems, Inc. O RS-IRM-92-203 34
Funds Questioned Put to 01G Costs lletter Use issued Contractor (Dollars) (Dollars) 05/20/92 Pinkerton Computer (Subcontractor to O Applied hianagement Systems, f ac.) l RS-NRR-92-203 05/20/92 VGS, Inc. (Subcontractor to User 0 Technology Associates)
RS-NR R-92-203 05/26/92 hiastech System Corporation 0 RS-IR hi-92-203 05/27/92 Itasca Consulting Group, Inc. O NRC 02-85-002 05/27/92 User Technology Associates O RS-I R N1 92-2t d Iki/01/92 Computech, Inc. O RS-IR ht-92-203 (vdO1/92 Science Applications International Corp. O RS-NR R-92-033 (KJ02/92 Sonah st, Inc. 39.519 RS-N'R R-92-034 ON02/92 Science Applications International Corp. O RS-NRR-92 021 06/02/92 c;ence Applications international Corp. O RS-N R R-92-027 06/02/92 Science Applications international Corp. O RS-NRR-92-035 06/02/92 Science Applications International Corp. O RS-NRR-92-034 06/04/92 Scientech (Subcontractor to Sonalyst) 0 RS-NRR 42-034 06/11/92 Science & Engineering Associates 47,901 RS-NRR-92-tl21 06/11/92 Science & Encineering Associates 28,331 RS-NRR-92 h27 06/11/92 Science & Eneineering Associates 97,971 RS-NRR 92 h33 35
Funds Questioned Put to 010 Costs lietter Use Issued Contr actor (Dollars) (Dollars) 06/11/92 Science & Engineering Associates 30.927 RS-NR R-92-D35 06/15/92 Science & Engineering Associates 68.901 RS-NRR-92404 06/15/92 Comex Corp. (Subcontract to Science 0 and Engineering'1 RS-NRR 92-0. Associates. Inc.)
06/15/92 Comex Corp. (Subcontract to Science 0 and Engineering RS-NRR 92-0. 7Asr.ociates. Inc.)
06/15/92 Comex Corp. (Subcontract to Science 0 and lingineering Associates, Inc.)
RS-N Rlt-92-033 06/15/92 Comex Corp.,(Subcontract to Science 0 and Engineenng Associates. Inc.)
RS-N RR-92-034 06/15/92 Scientech, Inc. O RS-NR R-92-033 06/15/92 Scientech, Inc. O RS-N R R-92-021 06/15/92 Scientech. Inc. O RS-N R R-92-027 06/23/92 PAL Consultants (Subcontract to Science 0 and Engineering Associates, Inc.)
RS-92-035-021 07/01/92 togicon R&D Associates, Inc. O NRC-03-83-092 07/14/92 Compuware Corp. (Subcontract 0 to Systems Automation Corp.)
RS-l R M-90-203 07/15/92 Analvtical & Research Technology '
0 NRC-33-91-183 08/11/92 S. Cohen and Associates, Inc. O RS-R ES-92-061 0S/11/92 Science & Engineering Associates O RS-NRR-92 D21 36
l'unds Questioned Put to
< to Costs lletter Use
, Issued Contractor (Dollars) (Dollars) 08/19/92 Quality Services International, Inc. 0
, itS-AI!D-92-266 08/24/92 Westinghouse filectric Corp. O N11C-04-85-103 08/25/92 National Council on itadiation 0 Protection and Measures NitC-I4-85-118; NitC-G-(4-81-027 Subtotal $367,120 $3,808.308 INTERNAL AUDIT REPORTS 06/26/92 lleview of NitC's Contract Close-out 8,295,281 Process 08/31/92 Improvements Needed in NitC's 1,400,(XNI Process for Approving Payments to the Department of linergy Subtotal $367,120 $9,695,281 TOTAL $367,120 $ 13,503,589 37
AllflREVIATIONS AhtS Allegation hianagement System ASLitP Atomic Safety and ljcensing floard Panel ATS Allegation Tracking System CFO Chief Financial Officer CPA certified public accountant DCAA U.S. Defense Contract Audit Agency DCFO Deputy Chief Financial Officer DOE U.S. Department of Energy DOJ U.S. Department of Justice EDO NitC's Executive Director for Operations Fill U.S. Federal Ilureau of Investigation FhiFIA Federal hianagers' Financial Integrity Act FOIA Freedom of Information Act l'IE full time equivalent FY fiscal year IG Inspector General Ilthi NltC's Office of Information Itesources hianagement NitC U.S. Nuclear llegulatory Commission Nitil NitC's Office of Nuclear iteactor llegulation OC Office of the Controller OlG NitC's Office of the inspector General OhiB U.S. Office of hianagement and fludget PCIE President's Council on Integrity and Ef ficiency I'FCIIA Program Fraud Civil itemedies Act itES NilC's Office of Nuclear llegulatory itesearch SNI. Sandia National laboratoly 38
GLOSSARY F/NAL ACT/ON. The completion of allinanagement actions discussed in man-agement decisions concerning audit recommendations and findings. Final action occurs when management issues a decision.
4 F/NANCIA L A UDIT. Financial audits are carried out to assess the elfectiveness of internal control systems, transaction processing, financial systems, and con-tracts.
FUNDS PUT TO BETTER USE. Funds identified in audit recommendations that could be used more efficiently by avoiding unnecessary expenses.
HOTLINE. A toll free telephone number (1-800-233-3497) available to anyone for the reporting of incidents of possible fraud, waste, and abute to the NRC's Ofhee of Inspector General.
"Af" ACCOUNT. Unliquidated obligations u.: der an appropriation are trans-ferred to (or merged into) an "M" account at the end of the second full fiscal year following expiration. The "M" account remains available for the payment of the unliquidated obligations charged to various-year appropriation accounts.
AfANAGEAfENT DEC/SION. Management evaluation of audit recommenda.
tions and findings. A final decision is issued that is based on management's response to recommendations and findings.
AfATERIAL ll'EAKNESS. A specific instance of non-compliance with the Federal Managers' Financial Integrity Act of sufficient importance to be reported to the President and the Congress. A weakness that would significantly impair the fulfillment of an agency's component's mission: deprive the public of needed services: violate statutory or regulatory requirements; significantly weaken safeguards against waste, loss, unauthorized use or misappropriation of funds, property, or other assets; or result in a conflict of interest.
NONCONFORAfANCE. The failure of an agency's accounting system to con-form wnh appropriate accounting principles, requirements, and/or standards.
OBLIGAT/ONS. Amounts of orders placed, contracts awarded, services rendered, or other commitments made by Federal agencies during a given period, that will require outlays during the same or some future period.
QUESTIONED COST. A cost questiened as a result of an alleged violation of law, regulation, contract, or agreement governing the expenditure of funds (costs unsupported by adequate documentation or funds for a particular purpose that are unnecessary or unreasonable).
UNSUPPORTED COST. A cost questioned because of a lack of adequate documentation at the time of the audit.
39
f THE INSPECTOR GENERAL HOTLINE A toll free numoer (1-800-233-3497) was established by the Office of the in-spector General to provide NI(C employees, contractors, and others with direct access to OlG's llotline Program. Ilotline procedures and guidelines were care- -
fully developed to ensure the confidentiality of NI(C employees wishing to re-port incidents of possible fraud, waste, and abuse within the NI(C. Trained OlG staff are available to answer calls Monday through 1:riday, between 10:00 a.m.
and 4:00 p.m. (eastern standard time). Individuals may also provide information to hotline personnel by writing to the address below.
U.S. Nuclear llegulatory Commission The Ol'fice of the inspector General llotline Program Mail Stop EW/W 542 Washington, D.C. 20555 HOTLINE NUM13ER:
1-800-233-3497 40
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