ML20154K412
| ML20154K412 | |
| Person / Time | |
|---|---|
| Issue date: | 09/03/1998 |
| From: | Shirley Ann Jackson, The Chairman NRC COMMISSION (OCM) |
| To: | Hoyle J NRC OFFICE OF THE SECRETARY (SECY) |
| References | |
| COMSECY-98-014, COMSECY-98-14, NUDOCS 9810190010 | |
| Download: ML20154K412 (2) | |
Text
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o UNITED STATES RELEASED TO THE PDR 1
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wAsHmGTON, D. C. 20566 date inhials# ~ j September 3, 1998
......................,a CHAIRMAN MEMORANDUM TO:
John C. Hoyle, Secretary FROM:
SUBJECT:
COMSECY-98-014, REVISION TO MANAGEMENT DIRECTIVE (MD) 6.1 - RESOLUTION AND FOLLOWUP OF AUDIT RECOMMENDATIONS
. I approve revisions to Management Directive (MD) and Handbook 6.1, Resolution and Followup of Audit Recommendations, as highlighted in this memorandum and as reflected in the attached marked up pages.
The first bullet under the Commission in the section in the MD relative to organizational responsibilities and delegations of authonty (p.1 of the MD) provides that the Commission approves and transmits responses to congressional committees regarding recommendations in GAO reports. I suggest the deletion of the word " transmits," because the report to Congress is sent under the Chairman's signature. Therefore, I recommend the addition of a new bullet under the Chairman section (p. 2 of the MD) that reads: "[t]ransmits responses to congressional committees regardn.] recommendations in reports from the GAO."
' Additionally, I suggest a modification to page 4 of the Handbook to make it consistent with page 2 of the Directive. The Directive refers to a process whereby OlG audit reports will be addressed to the Chairman (p. 2 of the Directive), unless they are directed to specific staff officials. It appears that a corresponding correction was not made to page 4 of the Handbook,
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which should also refer to OlG recommendations directed to the Chairman. Therefore, I recommend that the first sentence in the last paragraph on page 4 of the Handbook should read:
The Chairman responds to OlG on recommendations directed to the Chairman that are contained in draft and final OlG audit reports.
The markup also reflects a few other minor edits.
l Additionally, I adopt.gnjy the revisions that Commissioner McGaffigan suggested that are n
reflected in my attached marked uo caoes. In particular, I do not support the addition of the J
word ' semiannual" relative to references to the Chairman's report to Congress on management decisions and final action on OlG recommendations. Although, section 5(b) of the inspector p,
General Act of 1978, as amended, refers to the Chairman's report as a semiannual report, for 40 the past three years, the agency has participeted in a pilot project, along with several other
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Federal agencies, aimed at streamlining financial management reporting and in which it has I
consolidated performance-related reporting into a single accountability report in accordance with the Govemment Management Reform Act of 1994. _Sep Foreword of the Accountability Report for FY 1997. - The agency has included the Chairman's report to Congress on management decisions and final actions on IG recommendations in the annual accountability report. Not nnrao 4
9810190010 980903 M
PDR COP 918 MtCC CORRESPONDENCE PDR
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l including the references to semiannual are consistent with the agency's practice of reporting l
annually under the pilot program through the Accountability Report. Further, I do not concur in j
the proposal to have the Commission approve portions of the Chainnan's semiannual report to Congress on management decisions and final action on OlG recommendations for the following reasons. The IG Act of 1978, as amended, makes clear that the head of the establishment transmits to Congress the IG's semiannual report "together with a report by the head of the establishment. containina- (1) any comments such head determines aooropriate;..,, "
i statisticalinformation, and other specific audit report information. (Emphasis added.) Section 5(b) of the IG Act of 1978, as amended.' Section 11(1) of'the IG Act of 1978, as amended, defines head of the establishment as "the Chairman of the Nuclear Regulatory Commission."
Also, it is highly unlikely that the type of purely factual information (the status of implementation L
of IG audit recommendations that includes primarily statistical information, information based on i
management decisions already made, and actions taken and not taken) that the law requires to l
be included in the Chairman's report would involve policy formulation, rulemaking, orders, or l
adjudications. Finally, I have no objection to Commissioner McGaffigan's request for specificity
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l on how audit reports by other executive branch inspector Generals outside the contracting area
^
(see page 9 of the Handbook) would be handled.
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U. S. Nuclear Regulatory Commission Volume:
6 InternalManagement EDO Re. solution and Followup of Audit Recommendations
~
Directive 6.1 Policy (6.1-01) l It is the policy of the NRC to resolve audit recommendations promptly 3
and to correct deficiencies identified in audit reports. This directive and handbook provide internal guidance to NRC personnel for implementation of Office of Management and Budget (OMB)
Circular A-50," Audit Followup," as revised (September 29,1982), and the Inspector General Act of 1978, as amended. OMB Circular A-50 establishes policies and procedures for use by agencies in following up on
/
audit reports. Additionally, the Inspector General Act imposes reporting requirements on agency heads with respect to audit recommendations.
Objectives (6.1-02)
To establish systems to ensure prompt and proper resolution and implementation of audit recommendations. (021)
To ensure that accounting and collection controls are in place for e
amounts due the NRC as a result of management determinations on eudit findings and recommendations. (022)
Organizational Responsibilities and Delegations of Authority (6.1-03)
Commission (031)
/
Approves-eed-t=~S responses to congressional committees regarding recommendations in reports from the General r
Accounting Office (GAO). (a)
Approved: January 13,1993
(-. u v v v g n,
m. Ao 1
(Revised: DRAFT 2/19/98)
V:ltune 6, Internal Management Resolution ' nd Followup of Audit Recommendations a
Directive'6.1 Commission (031)(continued)
I Resolves atters raised irg1nternal audit reports of the Office of the Inspectign General (OIG) svhen they involve policy formulation, certain types of rulemakingfr ordem and adjudications as definedin the Reorganization Plan No.1 of 1980 (b)
Chairman
. h3m;t E8s$onsesfo $
resionkr commibs r garding e
e o sinryo From 4 e/GAO.
(032) re emi%
With regard to audit recommendations addressed to the Chairman-(a)
- Responds to OIG on recommendations contained in draft and final OlG audit reports and to GAO on draft GAO audit reports. (i)
- Ensures that recommendatiens of audit reports are resolved; that corrective actions are assigned, tracked, and completed; and that the Audit Followup Officg dvised of actions taken. (ii)
When necessary, resolves differences between OlG and the Commission offices, EDO staff offices, the CFO, and/or the CIO with regard to recommendations contained in OlG internal audit reports.
Ilowever, when the resolution involves matters relating to policy formulation, certain types of rulemaking or order 9 and adjudications y
(as defined in the Reorganization Plan No.1 of 1980), refers such, issues to the Conunission. (b)
. Submits a report to the Congress on management decisions and '
final actions taken with regard to audit recommendations from the OIG. (c)
Executive Director for Operations (EDO)
(033)
Provides policy guidance to ensure that management officials throughout the agency understand the value of the audit process and are responsive to audit recommendations. (a)
With regard to audit recommendations addressed to the EDO---(b Responds to OIG commendations contained in draft and Wrf final OIG report' %pAOgdraft GAO repor h
j s an N
- Ensures that recommendations of audit reports are resolved and that corrective actions are assigned, tracked, and enca, completed. (ii)
Commis51dlF Approved: January 13,1993 2
(Revised: DRAFT 2/19/98) l
Valume 6, Internal Manat cat Resolution and Followup of Audit Recommend.. ons Directive 6.1 Executive Director for Operations (EDO)
(033)(continued)
Serves as Audit Followup Official (AFO). (c) e
- Provides oversight and direction to ensure that recommendations of audit reports are resolved in a timely manner and that corrective action is assigned and completed. (i)
- Facilitates resolution of any disagreements between Commission offices and the Inspector General regarding internal audit findings and recommendations. (ii)
- Resolves any disagreements between the Deputy Executive Directors for Operations and the Inspector General (IG) regarding internal audit findings and recommendations. (iii)
- Provides a system to maintain accurate records and track the status of audit reports and recommendations through the entire process of resolution and corrective action. (iv)
- Provides a program to ensure continuing effective corrective action in response to audit recommendations. (v)
- Provides for an annual review of implementation of selected audit recommendations. (vi)
- Ensures that periodic analyses are conducted of audit recommendations, resolution, and corrective action activities to determine trends and problems and to recommend solutions. (vii)
]
- ReportsM0ir a y on the status of GAO assignments to the Commission for information. (viii)
Forwards to the Commission for approval and transmittal the required statements to congressional committees on recommendations contained in final GAO audit reports. (d)
Prepares the NRC Chairman's report to the Congress on e
management decisions and final actions on OIG audit recommendations. (c)
Chief Financial Officer (CFO)
(034)
Ensures that timely action is taken to pursue collection of funds that result from management determinations on audit findings and recommendations. (a) i Approved: January 13,1993 (Revised: DRAFT 2/19/98) 3
V:lume 6, Intcrnal Management Resolution and Followup of Audit Recommendations Directive 6.1 i
Chief Financial Officer (CFO)
(034)(continued)
Establishes accounts receivable and pursues collection action under Management Directive 4.1, " Accounting Policy and Practices"; " Debt Collection Procedures," 10 CFR Part 15; the 1
" Salary Offset Procedures for Collecting Debts Owed by Federal Employees to the Federal Government," 10 CFR Part 16; and the Federal Claims Collection Standards, 4 CFR Parts 101-104, for funds owed NRC as a result of audits. (b)
Notifies the Deputy Inspector General when accounts receivable are established for funds owed NRC as a result of NRC contract i
audits. (c) 1 informs the AFO of significant audit findings and of any^
e disagreements with OIG on audit findings and remmmpndations. (d)
Provides information on collection of disallowed costs to the AFO for inclusion in the Chairman's report to Congress on management decisions and final actions regarding OIG audit recommendations. (e)
. With regard to an audit of the office tained in[1J
- Responds directly to OlG on recommendations c b
draft OIG and final audit reports, and to GAO cy of facts and conclusions contained in draft GAO auditchar Wtn reports. (i) ad enca.
- Ensures that recommendations of audit reports are resolved; Com*Wi'l that corrective actions are assigned, tracked, and completed; and that the AFO and OIG are advised of actions taken. (ii)
Forwards to the Commission for approval and transmittal the required statements to congressional committees on recommendations contained in final GAO audit reports. (g)
Develops a remediation plan in consultation with the Director, OMB, if there is a sustained audit finding that NRC financial management systems are not in compliance with the requirements of the Federal Financial Management Improvement Act of l
1996.(h)
Approved: January 13,1993 4
(Revised: DRAFT 2/19/98)
1 l
l Volume 6, Internal Manag: ment Resolution and Followup of Audit Recommendations Directive 6.1 ChiefInformation Officer (CIO)
(035)
,/
With regard to an audit of ti e
- Responds directly to OI on recommendations contained in wg draft OlG and final audit reports, and to GAO6n the a h
of facts and conclusions contained in draft GAO audi rrran 0 M reports. (i)
CctWr6tur
- Ensures that recommendations of audit repdrts are resolved; that corrective actions are assigned, tracked, and completed; and that the AFO and OIG are advised of actions taken. (ii)
Informs the AFO of significant audit findings and of any disagreements with OIG on audit findings and recommendations. (b)
Forwards to the Commission for approval and transmittal the required statements to congressional committees on recommendations contained in final GAO audit reports. (c)
Concurs in responses and target dates for recommendations affecting NRC's information technology infrastructure or applications systems. (d)
Inspector General, Office of the g
Inspector General (OIG) gl,hg 0f hnd edtwM (036) 4 Provides copies of allinternal audit reports to the AF. (a) e Provides copies of all contract audit reports issued by OIG to the Division of Contracts and Property Management, Office of Administration. (b) e Informs the AFO about disagreements on internal audit recommendations and provides information copies of matters referred to the Commission for resolution. (c)
Provides information copies of all internal audit reports to the e
CFO. (d)
Periodically evaluates audit recommendations, management e
decisions, and resulting corrective actions to identify trends and systemic problems. (e)
Evaluates the adequacy of NRC's audit followup system. (f) e Approved: January 13,1993 (Revised: DRAFT 2/19/98) 5
l-1 V: luma 6, Internal Manag:mcnt Resolution and Followup of Audit Recommendations Directive 6.1 Inspector General, Office of the Inspector General (OIG)
(036)(continued)
Reviews implementation actions by NRC management to determine whether these actions were consistent with the j
management decision. (g)
With regard to GAO audits of OIG-(h)
Responds directly to draft and final GAO audit reports. (i)
- Transmits the required tatements to congressional committees on recommendations contained in final GAO audit reports. (ii) l l Directors of Commission Offices, Panels, and Advisory Committees 1 'ffbY With regard to audits of their offices-JJ ff)
A0)
Respond directly to OIG with copy to the Chair l
cach Commissioner \\on recommendatio s contained in draft OIG nd e
final]iudit reports, and to GAO on the accuracy of hets a s
conclusions contained in draft GAO audit reports. (a)
Provide to the Commission for approval and transmittal the e
required statements to congressional committees on recommendations contained in final GAO audit reports. (b)
Ensure that recommendations of audit reports are resolved; that corrective actions are assigned, tracked, and completed; and that the AFO, OIG, and the Chairman and Commissioners are advised I
of actions taken. (c)
Deputy Executive Directors for Operations (038)
Review and respond Qirectly to OIG to draft internal audit reports I
for their respective areas of responsibility.(a) e Coordinate resolution and corrective action on internal audit e
recommendations involving more than one program or agency. (b)
Inform the AFO of significant audit findings and of any disagreements e
with OIG on audit findings and recommendations. (c)
Approved: January.13,1993 6
(Revised: DRAFT 2/19/98) i l
Vclums 6, Internal Management Resolution and Followup of Audit Recommendations Directive 6.1 Deputy Chief Financial Officer (039)
Reviews and responds to draft internal audit reports. (a)
I EDO and Region e
Coordinates resolution and corrective action on internal audit e
recommendations involving more than one program or agency. (b)
/
e Info s the AF of significat audit fi ings an of any a h[
disagre ents with G on audit fin gs and re mmenda 'ons. (c)
C OITice Directors Reporting to t te (0310)
Submit responses to audit reports to'the appropriate Deputy e
Executive Director for Operations. (a)
Take corrective action in response to audit recommendations in a timely manner and advise the AFO and the OlG of the action
- aken. (b)
Notify the CFO when corrective actions in response to audit e
recommendations result in significant changes to existing management controls or in the development of new management i
controls. (c)
Director, Division of Contracts and Property Management, Office of Administration (0311)
Resolves any disagreements on contract audit recommendations e
between contracting officers and OIG. (a)
Informs the AFO of any disagreements on contract audit recommendations before taking final action. (b).
Establishes target dates for corrective action in response to contract audit recommendations. (c)
Ensures there is written documentation that demonstrates the e
adequacy and appropriateness of actions taken in response to contract audit recommendations. (d)
Provides information on contract audits to the AFO for inclusion in l
the Chairman's/ report to Congress on management decisions and final actions on OIG ardit recommendations. (e)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 7
Volume 6, Internal Manag: ment Ret,olution and Followup of Audit Recommendations Handbook 6.1 Part I Distribution ofInternal Audit Reports (C)(continued)
Audited Organization Receiving Official Commission Chairman Chief Financial Officer (CFO)
CFO -
Chief Information Officer (CIO)
CIO Commission offices (including Office Director Commission panels and advisory committees}
./
Executive Director for Operations (EDO) EDO EDO staff offices and regional offices Cognizant Deputy EDO Final OIG Internal Audit Reports (2)
The Inspector General (IG) will issue final audit reports to NRC receiving officials as the IG deems appropriate. The IG also will provide copies of final reports to the appropriate receiving officials db shown in the above table and tp t Audit Followup Offi ial,(EDQhorl gv armats Or4 coca Commi/66tonC Contract Audit Reports (3)
The IG will issue final audit reports to the cognizant contract negotiator or administrator.
Resolution of Audit Recommendations (D)
OIG Internal Audit Recommendations (1)
Audit recommendations should be resolved within 6 months after issuance of a final report. Corrective action must proceed as rapidly as possible. (a)
Approved: January 13,1993 (Revised: DRAFI'2/19/98) 3
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
OIG Internal Audit Recoramendations (1)(continued)
When 'a draft or final internal audit report is provided to agency e
management, management will evaluate the audit findings and recommendations contained in the report and issue a management decision with respect to these findings and recommendations.
Internal audits are considered resolved when the audit organization and agency management agree on-the action to be taken on reported findings and recommendations and the dollar savings resulting from a management decision. (i)
OIG generally provides the audited organization with an opportunity, usually of 30 days, to formally comment on a draft OIG audit report before the final report is issued. OIG staff will meet with appropriate officials, as nece:.sary, to discuss facts contained in the draft report and the actions needed to resolve the findings and recommendations of the report. (ii)
The formal response to each draft audit report will indicate whether or not the audited organization agrees with each recommendation.
If the audited organization agrees with a recommendation, the response will give the planned corrective action, the title of the management official responsible for ensuring action is taken, and the date each action will be completed. (iii)
If the audited organization disagrees with a recommendation in an e
audit report, the response will explain fully the reason for the disagreement, as well as any alternative action the audited organization believes is necessary. Where disagreement is based on interpretation oflaw, regulation, or the authority of officials to take or not take action, the response will be coordinated with the Office of the General Counsel (OGC) and will state the legal basis for the disagreement. (iv)
The Chairman responds to OIG on recommendations directed to the Cl,c#otow Commicio-that are contained in draft and final OIG audit reports.
C6 Mhg The CFO, CIO, and directors of Commission offices, panels, and t.
independent advisory committees respond to draft and reports containing recommendations for their offices 6 Depu Executive Directors for Operations (Deputy EDOs) respond to draft aW and final OIG audit reports containing recommendations for _their respective areas of responsibilityrSaiiijilUesponses to OIG reports are e i
included in Exhibit 1 to this handbook. (b)
(bmmlS2WI Approved: January 13,1993 4
(Revised: DRAFT 2/19/98)
)
e V:lume 6, Int:rnal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
OIG Internal Audit Recommendations (1)(continued)
The Chainnan has the final authority for audit resolution except for j
l matters relating to policy formulation, certain types of rulemakingpf orders, and adjudications as defined in the Reorganization Plan No.1 of J980. The Chairman will refer matters in these latter areas for Commission consideration and will subsequently communicate the 1
decision to OIG. (c)
An intemal audit recommendation is considered resolved when the Chairman makes a management decision on the recommendation. OIG disagreements with responses to audit recommendations from audited organizations other than the Conunission may be submitted to the l
Chaimian for resolution in accordance with the procedures set forth below. (d)
Disagreements on responses to audit recommendations from the CFO, CIO, or directors of Commission offices, panels, and committees may I
be submitted by the IG or the director directly to the Chairman for j
resolution. Disagreements on responses to audit recommendations from the Deputy EDOs may be submitted by the IG or the Deputy EDOs to the Audit Followup Official (AFO) for resolution. If the AFO and the IG cannot reach an agreement on the disputed issue, either 5
party may submit the matter to the Chainnan for resolution. (e)
The resolution process may take place before or after OIG issues a e
final report. If a draft report has been issued to the audited organization for comment and there still are unresolved recommendations at the time the final report is issued, OIG will indicate in the final report which recommendations remain unresolved. OIG will include the positions of both OIG and the audited organization on these recommendations. (i)
If the IG disagrees with NRC management's position on an audit e
recommendation in a final audit report, the AFO will nevertheless consider the recommendation resolved unless the IG refers the l
matter to the Chairman for resolution within 30 days after the final report is issued. The IG and the AFO will work together to accomplish resolution within 6 months of the final report date. (ii)
In some instances, the IG may decide not to request the Chairman to l
resolve the disagreement but will hold an issue open for further review or other OIG action. OIG will note this course of action in their final report and the AFO will consider the recommendation resolved. (iii)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 5
Wlum: 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I i
Resolution of Audit Recommendations (D)(continued)
)
GAO Audit Recommendations (3) l GAO may provide draft reports to NRC for review and comment so that final reports may incorporate agency views. Under 31 U.S.C.
718(b)(1), NRC must provide comments on draft GAO reports within 30 days of issuance. An extension of the' comment period may be requested if it is not possible to respond within 30 days and if GAO decides that a longer period is necessary and likely to result in a more accurate report. 'Iypically, comments on GAO draft reports address the accuracy of facts and conclusions, but not the recommendations. (a)
The Commission, the CFO, CIO, and directors of Commission offices, panels, and boards, and the IG respond to draft GAO audit reports l
i'wolving their offices. The EDO responds to draft GAO audit reports concerning agency p ogra s and operations within the EDO's < ea of.
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hhumh<Yc,'a4>
dc;r N n
i GAO issues final reports to the Congress or to the Chairman. If the report is issued to the Congress, a copy is provided to the Chairman.
Additional copies are provided to the Audit Followup Official and to the Director, OMB. (c)
GAO final reports require, by statute, a response to Congress e
within 60 days on the recommendations presented by GAO. The response will discuss the action taken, or to be taken, by the agency.
The Commission reviews and approves the NRC response and l
requires 14 to 21 days for review. Commission approval constitutes a management decision and resolution. (i)
If NRC staff disagrees with a recon.mendation contained in a final e
audit report, the response will state the reason for the disagreement, as well as any alternative action the staff believes necessary. Where disagreement is based on interpretation of law, i
l regulation, or the authority of officials to take or not take action, the response will be coordinated with OGC and will state the legal basis for the disagreement. (ii)
Sample responses to GAO reports are included in Exhibits 2 and 3 of this handbook. (d)
Statements to the Office of Management and Budget (OMB) are processed as follows-(e) l Approved: January 13,1993 j
(Revised: DRAFT 2/19/98),
7
. Vol'ume 6, Internal Management Resolution and Followup of Audit Recommendations IIandbook 6.1 Part III 1
PartIII Reporting Requirements
.l The Chairman's Report to the Congress on Management Decisions and Final Action on OIG Recommendations (A)
The Audit Followup Official (AFO) will prephre, for the Chairman's l
approval and submission to the Congress, a report on management decisions and final actions with regard to recommendations from the Office of the Inspector General (OIG). (1)
The Chairman ~s report wul contain any comments the Chairman believes appropnate and willinclude the following-(2)
Statistical tables showing the total number of audit reports and the dollar value of disallowed costs for audit reports-(a)
- For which final action had not been taken by the commencement of the reporting period (i)
- On which management decisions were made during the reporting period (ii)
- For which final action was taken during the reporting period, including-(iii)
The dollar value of disallowed costs that were recovered by management through collection, offset, property in lieu of cash, or othenvise (a)
The dollar value of disallowed costs that were written off by management (b)
- For which no final action has been taken by the end of the reporting period (iv)
Approved: January 13,1993 16 (Refised: DRAFr 2/19/98)
c i
-V: lama 6, Intern 1 Management
Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits i
Exhibit 3 (continued)
The Honorable IName), Jr., Chairman Committee on Government Reform and Oversight United States House of Representatives Washington, DC 20515 i
cc: Representative (Name]*
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The Honorable [Name), Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Committee on Environment and Public Works l
United States Senate Washington, DC 20510 cc: Senator [Name]
'! Tidehonor bic [Nank, Chairn
\\
ubcd mitte'e on Ene -
and thelh tro et s
omm ee on I{tterior a d Insular Yair ited tes H6use of R res tatid i
Wa lingto DC 515 vpresentitive [ Kame]
cc:
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The Honorable [Na e], C ~
,n Subcommittee on ergy and
'er Committee on Energ and '
merce United Stat
-Iouse o epr e tives
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,D 00515 cc: Repres nta
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n'orabl [Nller Ge eral o] h e
nited States mp G
unt g Tice
\\ s ngton, 54 The H' o ble [Name), Director anap: ment and Budget Was ' gtonp, ' 20503 L
l-
- The cc is the Ranking Minority Individual on the Committee.
l Approved: January 13,1993 28 (Revised: DRAFT 2/19/98)
-,