ML20154L597
| ML20154L597 | |
| Person / Time | |
|---|---|
| Issue date: | 02/19/1998 |
| From: | NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| Shared Package | |
| ML20154K820 | List: |
| References | |
| 6.1, NUDOCS 9810200008 | |
| Download: ML20154L597 (45) | |
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Resolution and Followup of Audit Recommendations Directive 6.1
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. . Volume 6, Internal Management l Resolution and Followup of Audit Recommendations Directive 6.1 l 1
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i Contents )
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Policy.................................................................. 1 Obj ec t ive s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Organizational Responsibilities and Delegations of Authority. . . . . . . . . . . . ,
1 Co m miss i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Ch a i rm a n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Executive Director for Operations (EDO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Chief Financial Officer (CFO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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Chief Information Officer (CIO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Inspector General, Office of the Inspector General (0IG). . . . . . . . . . . . . . . . . . . . 5 Directors of Commission Offices, Panels, and Advisory Committees. . . . . . . . . . . . 6 Deputy Executive Directors for Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Deputy Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Office Directors Reporting to the EDO and Regional Administrators. . . . . . . . . . 7 Director, Division of Contracts and Property Management, Office of Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ap pli ca bili ty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 H a n d bo o k . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Re fe re n ce s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4
W Approved: January 13,1993 (Revised: DRAFT 2/19/98) iii
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g U. S. Nuclear Regulatory Commission l
% ,,+ Volume: 6 Internal Management EDO i
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Resolution and Followup of Audit Recommendations ~
i Directive 6.1 Policy (6.1-01)
It is the policy of the NRC to resolve audit recommendations promptly 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 audit reports. Additionally, the Inspector General Act imposes reporting requirements on agency heads with respect to audit j recommendations.
Objectives (6.1-02)
- To establish systems to ensure prompt and proper resolution and l implementation of audit recommendations. (021) i I
. To ensure that accoun ig and collection controls are in place for amounts due the NRC az, a result of management determinations on audit findings and recommendations. (022)
Organizational Responsibilities and j Delegations of Authority ' l (6.1-03)
Commission (031) !
. Approves and transmits responses to congressional committees l regarding recommendations in reports from the General l Accounting Office (GAO). (a) l
)
Approved: January 13,1993 1
(Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Directive 6.1 Commission (031)(continued) e Resolves matters raised in internal audit reports of the Office of the Inspection General (OIG) when they involve policy formulation, certain types of rulemaking or orders, and adjudications as defined in the Reorganization Plan No.1 of 1980. (b)
Chairman (032) e 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 recommendations of audit reports are resolved; that corrective actions are assigned, tracked, and completed; and that the Audit Followup Official is advised of actions taken. (ii) e When necessary, resolves differences between OIG and the Commission offices, EDO staff offices, the CFO, and/or the CIO with regard to recommendations contained in OIG internal audit reports.
However, when the resolution involves matters relating to policy formulation, certain types of rulemaking or orders, and adjudications (as defined in the Reorganization Plan No.1 of 1980), refers such issues to the Conunission. (b) e 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) ,
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e 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) e With regard to audit recommendations addressed to the EDO-(b) ,
- Responds to OIG on recommendations contained in draft and l
! final OIG reports and GAO on draft GAO reports. (i) l - Ensures that recommendations of audit reports are resolved i and that corrective actions are assigned, tracked, and completed. (ii)
Approved: January 13,1993 2 (Revised: DRAFT 2/19/98) l
Volume 6, Internal Management
. Resolution and Followup of Audit Recommendations Directive 6.1 1
Executive Director for Operations (EDO) l (033)(continued)
- Serves as Audit Followup Official (AFO). (c) )
- Provides oversight and direction to ensure that l recommendations of audit reports are resolved in a timely i manner and that corrective action is assigned and j completed. (i)
- Facilitates resolution of any disagreements between Commission offices and the Inspector General regarding l internal audit findings and recommendations. (ii) l
- 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)
- Reports semiannually on the status of GAO assignments to the Commission for information. (viii) e Fonvards 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 management decisions and final actions on OIG audit recommendations. (e)
Chief Financial Officer (CFO)
(034)
- e Ensures that timely action is taken to pursue collection of funds that result from management determinations on audit findings and recommendations. (a)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 3
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Volume 6, Internal Management Resolution and Followup of Audit Recommendations Directive 6.1 Chief Financial Officer (CFO)
(034)(continued) e Establishes accounts receivable and pursues collection action under Management Directive 4.1, " Accounting Policy and Practices"; " Debt Collection Procedures," 10 CFR Part 15; the
" 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
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funds owed NRC as a result of audits. (b)
- Notifies the Deputy Inspector General when accounts receivable l are established for funds owed NRC as a result of NRC contract audits. (c) ,
e Informs the AFO of significant audit findings and of any disagreements with OlG on audit findings and recommendations. (d) e 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) e With regard to an audit cf the office-(f)
- Responds directly to OIG on recommendations contained in draft OIG and final audit reports, and to GAO on the accuracy of facts and conclusions contained in draft GAO audit reports. (i)
- Ensures that recommendations of audit reports are resolved; 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 1996.(h)
Approved: January 13,1993 4 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Directive 6.1 ChiefInformation Officer (CIO)
(035) e With regard to an audit of'the office-(a)
- Responds directly to OIG on recommendations contained in draft OIG and final audit reports, and to GAO on the accuracy of facts and conclusions contained in draft GAO audit reports. (i)
- Ensures that recommendations of audit repdtts are resolved; that corrective actions are assigned, tracked, and completed; and that the AFO and OIG are advised of actions taken. (ii) e Informs the AFO of significant audit findings and of any disagreements with OIG on audit findings and recommendations. (b) e Forwards to the Commission for approval and transmittal the required statements to congressional committees on recommendations contained in final GAO audit reports. (c) e Concurs in responses and target dates for recommendations affecting NRC's information technology infrastructure or applications systems. (d)
Inspector General, Office of the Inspector General (OIG)
(036) e Provides copies of allinternal audit reports to the AFO. (a) e Provides copies of all contract audit reports issued by OIG to the j Division of Contracts and Property Management, Office of Administration. (b)
- Informs the AFO about disagreements on internal audit recommendations and provides information copies of matters referred to the Commission for resolution. (c) e Provides information copies of all internal audit reports to the CFO. (d) e Periodically evaluates audit recommendations, management decisions, and resulting corrective actions to identify trends and systemic problems. (e) e Evaluates the adequacy of NRC's audit followup system. (f)
Approved: January 13,1993 5 i (Revised: DRAFT 2/19/98) i
Viclume 6, Internal Man gement l
Resolution and Followup of Audit Recommendations i
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 management decision. (g) e With regard to GAO audits of OlG-(h)
- Responds directly to draft and final GAO audit reports. (i)
- Transmits the required statements to congressional committees on recommendations contained in final GAO audit reports. (ii) l Directors of Commission Offices, Panels,and Advisory Committees (037)
' With regard to audits of their offices-
- Respond directly to OIG with a copy to the Chairman and Commissioners on recommendations contained in draft OIG and final audit reports, and to GAO on the accuracy of facts and conclusions contained in draft GAO audit reports. (a)
- Provide to the Commission for approval and transmittal the 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) e Review and respond directly to OIG to draft internal audit reports for their respective areas of responsibility.(a)
- Coordinate resolution and corrective action on internal audit recommendations involving more than one program or agency. (b) l
- Inform the AFO of significant audit findings and of any disagreements l
with OIG on audit findings and recommendations. (c)
Approved: January 13,1993 6 (Revised: DRAFT 2/19/98)
Volume 6, Internal Managcment Resolution and Followup of Audit Recommendations Directive 6.1 Deputy Chief Financial Officer (039) e Reviews and responds to draft internal audit reports. (a) e Coordinates resolution and corrective action on internal audit recommendations involving more than one program or agency. (b)
I Office Directors e Informs the AFO of significant audit findings and of any disagreements with OIG on audit findings and reco,mmendations. (c)
EDO and Regional Administrators (0310)
Submit responses to audit reports to the appropriate Deputy
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Executive Director for Operations. (a)
. Take corrective action in response to audit recommendations in a timely manner and advise the AFO and the OIG of the action taken. (b)
. Notify the CFO when corrective actions in response to audit 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) e Resolves any disagreements on contract audit recommendations between contracting officers and OIG. (a) e Informs the AFO of any disagreements on contract audit j recommendations before taking final action. (b) i
- Establishes target dates for corrective action in response to contract audit recommendations. (c)
- Ensures there is written documentation that demonstrates the adequacy and appropriateness of actions taken in response to contract audit recommendations. (d) l
- Provides information on contract audits to the AFO for inclusion in the Chairman's report to Congress on management decisions and final actions on OIG audit recommendations. (e)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 7
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clume 6, Internal Management ~
Resolution and Followup of Audit Recommendations Directive 6.1 l i
1 Director, Division of Contracts and '
Property Management, Office of ;
Administration 1 (0311)(continued) l
- Provides for the maintenance of accurate records of the status of l contract audit reports and recommendations through the entire i process of resolution and corrective action. (f) !
Applicability .
l (6.1-04) !
This directive and handbook apply to all NRC and regional office ;
employees responsible for resolution and followup of audit ;
recommendations in reports issued by the OIG, executive branch audit I Handbook organizations, the General Accounting Office (GAO), and non-Federat organizations.
l (6.1-05)
Handbook 6.1 contains detailed guidance for resolution and followup of audit recommendations.
References (6.1-06)
Chief Financial Officers Act of 1990 (31 U.S.C. 902(a)).
Code ofFederal Regulations-
" Federal Claims Collection Standards," 4 CFR Parts 101-104.
" Debt Collection Procedures," 10 CFR Part 15.
" Salary Offset Procedures for Collecting Debts Owed by Federal Employees to the Federal Government," 10 CFR Part 16.
Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.).
Federal Acquisition Regulation, FAR 1.603-2.
Federal Financial Managenient Improvement Act of 1996 (31 U.S.C.
3512 et seq.).
Federal Managers' Financial Integrity Act of 1982.
Inspector General Act of 1978 (5 U.S.C. App. 3).
Inspector General Act Amendments, Pub. L 100-504.
Approved: January 13,1993 8 (Revised: DRAFT 2/19/98)
Volume 6, Internal Mtnagement Resolution and Followup of Audit Recommendations Directive 6.1 References (6.1-06) (continued)
Legislative Reorganization Aci of 1970, Pub. L.91-510.
N.RC Management Directive 4.1," Accounting Policy and Practices."
4.4," Management Controls."
OMB Circular A-50, " Audit Followup," Office of Management and Budget, September 29,1982.
Reorganization Plan No.1 of 1980, Nuclear Regulatory Commission (5 U.S.C. App.1).
Treasury Financial Manual, I TFM 8025.20, Department of the Treasury.
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Approved: January 13,1993 (Revised: DRAFT 2/19/98) 9
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l Resolution and Foilowup of Audit Recommendations Handbook 6.1
i Volume 6, Internri Man;gement !
Resolution and Followup of Audit Recommendations 1 Handbook 6.1 Parts I III Contents Part I Guidance for' Resolution and Followup of At$dit Recommendations... .. . 1 I n t ro d u c t io n (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Audit Followup Responsibilities (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 1
Contracting Officers, Division of Contracts and Property 1 Management (DCPM), Office of Administration (ADM) (1) l. . . . . . . . 2 Chief Financial Officer (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Distribution of Internal Audit' Reports (C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Draft OIG Audit Reports (1) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 2 j Final OIG Internal Audit Reports (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Contract Audit Reports (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Resolution of Audit Recommendations (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 OIG Internal Audit Recommendations (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Financial Audit Recommendations (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 GAO Audit Recommendations (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Contract Audit Recommendations (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Review of Implementation of Corrective Action (E). . . . . . . . . . . . . . . . . . . . . . . . 11 NRC Management Followup Reviews (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 OIG Followup Reviews (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 i Tracking Corrective Actions (F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Official Agency System (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Unresolved Recommendations (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 l Implementation of Corrective Actions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Re covery of Funds (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 l
Part II Accounting and Collection Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Recording Receivables (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 In t e rest Ch arges (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Allowance for Uncollectible Amounts (C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Paymen t of Debts (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Excep t io ns (E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Approved: January 13,1993 (Revised: DRAFT 2/19/98) iij
V:lume 6, Intern:1 Manag:m:nt Resolution and Followup of Audit Recommendations IIandbook 6.1 Parts I RIII Contents (continued)
Part III Reporting Req uiremen ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 The Chairman's Report to the Congress on Management Decisions and Final Action on OIG Recommendations (A). . . . . . . . . . . . . . . . . . . . . . . . . . . 16 OIG Semiannual Report to the Chairman (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 G l o S s a ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . 19 Exhibits 1 Sample Response to OIG Audit Report . . . . . . . . . . . . . . . . . . . .... ...... 22 2 Sample Response to Draft GAO Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3 Sample Response to Final GAO Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 4 Memorandum of Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Approved: January 13,1993 iv (Revised: DRAFT 2/19/98)
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Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Part I Guidance for Resolution and Followup of Audit Recommendations Introduction (A)
Audit followup is an integral part of good management and is a shared responsibility of agency management officials and auditors. Corrective action by management on resolved findings and recommendations is essential to improving the effectiveness and efficiency of agency operations. NRC will establish systems to ensure the prompt and proper resolution and implementation of audit recommendations.
These systems will provide for a complete record of action on both monetary and non-monetary findings and recommendations. (1)
Audits of NRC programs and operations are typically conducted by the Inspector General and the General Accounting Office (GAO). Audits of NRC contracts and grants may be conducted by the Inspector General, the Defense Contract Audit Agency, the Department of Health and Human Services, the Department of Education, or other Federal agencies. In some instances, private accounting firms perform audits of State or local governments or institutions under the single audit concept; sometimes these reports contain findings that affect NRC funds. (2)
With the exception of certain recommendations in contract audits discussed below, audit recommendations will generally be resolved within 6 months after issuance of a final audit report. In the case of audits performed by non-Federal auditors, recommendations will generally be resolved within 6 months after receipt of the report by the Federal Government. NRC will maintain audit followup systems to track audit recommendations until corrective action has been completed. Controls will be in place, and will be modified as needed, to ensure amounts owed the NRC as a result of audits are accounted for Approved: January 13,1993 (Revised: DRAFT 2/19/98) 1
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olume 6, InternIl Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Introduction (A)(continued) and collected promptly. NRC will provide a report to the Congress on the status of audit recommendations. (3)
The procedures for distributing audit reports, resolving audit recommendations, implementing and tracking corrective actions, are l
explained below. Accounting and Collection Controls and reporting to the Congress are explained, respectively, in Parts II and III of this handbook.. (4)
Audit Followup Responsibilities (a)
Contracting Officers, Division of Contracts and Property Management (DCPM), Office of Administration (ADM) (1) e Make initial management decision on recommendations resulting from audits of NRC contracts and grants. (a) e Refer any disagreements with the Office of the Inspector General (OIG)on contract audit recommendations to the Director, DCPM, for final management decision and resolution. (b) e Provide the Office of the Chief Financial Officer (OCFO) with a copy of the written determination establishing a contractor's indebtedness to the NRC as a result of audits of NRC contracts. (c)
. Inform the Assistant Inspector General for Audits, OIG, at the time l the OCFO is notified of the debt to be collected by NRC as a result of audits of NRC contracts. (d)
E Chief Financial Officer (2)
Evaluates OIG and GAO audit reports to identify areas concerning management controls for appropriate followup and for preparation of the annual management control report to the President and the Congress as required by the Federal Managers' Financial Integrity Act of 1982.
Distribution ofInternal Audit Reports (C)
, Draft OIG Audit Reports (1)
The Inspector General will issue draft internal audit reports for comment to the officials designated in the following chart.
Approved: January 13,1993 2 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution 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 l 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 shown in the above table and to the Audit Followup Official (EDO).
l 3 Contract Audit Reports (3)
The IG will issue final audit reports to the cognizant contract l negotiator or administrator.
l l 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: DRAFT 2/19/98) 3
Volume 60 Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
OIG Internal Audit Recommendations (1)(continued) e When a draft or final internal audit report is provided to agency 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 l 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 l
audit report before the final report is issued. OIG staff will meet '
with appropriate officials, as necessary, 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 cornpleted. (iii) e If the audited organization disagrees with a recommendation in an 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 Commission that are contained in draft and final OIG audit reports.
The CFO, CIO, and directors of Commission offices, panels, and independent advisory committees respond to draft and final OIG audit reports containing recommendations for their offices. The Deputy l Executive Directors for Operations (Deputy EDOs) respond to draft l and final OIG audit reports containing recommendations for their i
respective areas of responsibility. Sample responses to OIG reports are included in Exhibit 1 to this handbook. (b) i l
Approved: January 13,1993 4 (Revised: DRAFT 2/19/98)
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Volume 6, Internal Management l Resolution and Followup of Audit Recommendations Handbook 6.1 Part I i
Resolution of Audit Recommendations (D)(continued)
OlG Internal Audit Recommendations (1)(continued)
The Chairman has the final authority for audit resolution except for l
matters relating to policy formulation, certain types of rulemaking or orders, and adjudications as defined in the Reorganization Plan No. I of 1980. The Chairman will refer matters in these latter areas for Commission consideration and will subsequently communicate the decision to OIG. (c)
An internal 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 Commission may be submitted to the l Chairman 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 be submitted by the IG or the director directly to the Chairman for 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 E party may submit the matter to the Chairman for resolution. (e)
- The resolution process may take place before or after OIG issues a 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) e If the IG disagrees with NRC management's position on an audit recommendation in a final audit repon, 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) l l e In some instances, the IG may decide not to request the Chairman to
- resolve the disagreement but will hold an issue open for funher review or other OIG action. OIG will note this course of action in their fm' al report and the AFO will consider the recommendation resolved. (iii)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 5
Y lume 6, Internal Management Resolution and Followup of Audit Recommendations
.Jiandbook 6.1 Part I Resolution of Audit Recommendations (o)(continued)
OIG Internal Audit Recommendations (1)(continued)
OIG, in its discretion, may issue audit reports that contain recommendations without providing the audited organization a prior opportunity for formal comment. In these instances, the formal response to the audit report will generally be made within 30 days of the issuance of the report. Within 30 days after receipt of NRC management's response, the IG will notify both- the responding management official and the AFO of any disagreement with the response, and the resolution process may proceed as described above.
Unless such notification is received from OIG within 30 days after receipt of management's response, the ,AFO will consider the recommendation resolved. (f) 4 The audited organization will advise the AFO and OIG in wTiting when corrective action on audit recommendations is completed and provide a
, description of the actions taken to implement each recommendation. When
( the end product of an action is a document, a copy of the document closing out the recommendation will be provided. (g)
Financial Audit Recommendations (2) l l
Audits of agency financial statements required by the Chief Financial I Officers Act of 1990 may be performed by the NRC Inspector General, ;
GAO, or an independent external auditor as determined by the NRC l l Inspector General. Reports are issued to the Chairman not later than March I following the fiscal year for which a financial statement is submitted. These reports are processed in accordance with the j procedurcs for resolution of OIG internal audit and GAO audit recommendations. (a)
With regard to an audit finding that the NRC financial management systems do not substantia'!y comply with the requirements of the !
Federal Financial Management Improvement Act of 1996, a I remediation plan for bringing noncompliant systems into compliance will be established in consultation with the Director, OMB. (b)
GAO also may resiew any audit of a financial statement conducted by I
the NRCIG or an external auditor. GAO reports its audit findings and recommendations to the Congress, the Director of the Office of Management and Budget (OMB), and the Chairman. These reports are processed under the procedures for resolution of GAO audit recommendations. (c) i Approved: January 13,1993 6 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
GAO Audit Recommendations,(3)
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. Typically, 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 involving their offices. The EDO responds to draft GAO audit reports concerning agency programs and operations within the EDO's area of responsibility. (b) l GAO issues final reports to the Cong ess or to the Chairman. If the l report is issued to the Congress, a copy is provided to the Chairman.
l Additional copies are provided to the Audit Followup Official and to the Director, OMB. (c) e GAO final reports require, by statute, a response to Congress j 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 requires 14 to 21 days for review. Commission approval constitutes a management decision and resolution. (i)
- If NRC staff disagrees with a recommendation contained in a final 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, l regulation, or the authority of officials to take or not take action, the l response will be coordinated with OGC and will state the legal basis i 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)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 7
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i Vclume 6, Internal Management l Resolution and Followup of Audit Recommendations l Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
GAO Audit Recommendations,(3)(continued)
. The Chairman, NRC, must submit a statement to the Director, OMB, within 60 calendar days after formal transraittal of a GAO report to the NRC when at least one of the following applies-(i)
- The report contains a specific recommendation for the Chairman, NRC. (a) -
- The report contains financial statements accompanied by either '
a qualified audit opinion or a disclaimer of opinion. (b)
I
- The report indicates a violation of the Antideficiency Act that has not been reported to the appropriate authorities. (c) l l
- The report indicates a violation of other laws. (d)
- OMB requests NRC to comment. (e) l
- The statement will identify the GAO report by number and date and will be submitted in duplicate. The statement will inform OMB of NRC's views on GAO's findings and recommendations and identify any action taken, or planned, in response to each significant l finding or recommendation. A copy of the agency's response to the l final GAO report will satisfy this requirement, provided the j response accurately and adequately reflects NRC's current views.
! When corrective action is incomplete, still under study, or planned, l
a statement will be included as to when NRC expects action to be l completed. The corrective action will be reported to OMB after it is completed. (ii)
- Copies of statements required by Section 236 of the Legislative Reorganization Act of 1970 will be submitted along with the
. statement to OMB. These statements may be used to satisfy the
! initial OMB reporting requirements. The statements should be l accompanied by any additional information not provided to the Congress but otherwise required by OMB. (iii)
Statements to congressional committees are processed as follows-(f)
.
- Under Section 236 of the Legislative Reorganization Act of 1970, when a GAO report contains recommendations to the Commission, NRC shall-(i)
Approved: January 13,1993 8 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
GAO Audit Recommendations (3)(continued)
- Submit a written statement to the Senate Committee on Governmental Affairs and the House Committee on Government Reform and Oversight nc later than 60 days from the date of receipt of the report. This statement will report the action taken or to be taken by NRC with respect to the GAO's recommendations. (a) -
- Submit a written statement to the Committees on Appropriations of the Senate and the House of Representatives in connection with the first request for appropriations submitted to the Congress more than 60 days after the date of the GAO report. This statement will report the action taken or to be taken by the agency with respect to the recommendations to the Commission. (b) e A copy of the above statements will be submitted on the same date to OMB and GAO. (ii)
Contract Audit Recommendations (4)
Audits of NRC contracts and grants can be performed by OIG or executive branch agencies, such as the Defense Contract Audit Agency, the Department of Health and Human Services, and the Department of Education. Audit reports from other agencies are sent directly to the Inspector General, who reviews the reports, notes his or her agreement or disagreement, and issues the reports and comments to DCPM, ADM, for resolution. In instances in which the 6-month time limit for resoluti on of audit recommendations applies, the 6-month period will begin on the date the IG issues the contract audit report to DCPM.
Preaward Contract Audits (a)
Preaward contract audits, that is, audits involving recommendations on contractor estimates of future costs, are considered resolved at the point at which agreement is reached, a contreet price is negotiated, or a proposed award is cancelled, whichever occurs first. They are not l subject to the 6-month time limits for resolution of audit l recommendations and the reporting requirement for audit recommendations that remain unresolved for more than 6 months. (i)
The contract files will contain adequate records of the status of audit reports or recommendations. (ii)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 9
kolume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
Contract Audit Recommendations (4)(continued) I Postaward Contract Audits (b) l Postaward audits are resolved when the audit organization and contracting officials agree on the action to be taken on reported findings and recommendations and the dollar savings. In the event of disagreement, resolution occurs at the point at which the Director, '
DCPM, determines the matter to be resolved. (i)
The contracting officer (CO) will attempt to resolve audit recommendations that result from postaward audits of NRC contracts. !
The CO will prepare a written determination of the allowability of all l questioned costs within 3 months of receipt of an audit report. (ii) !
l I
The CO will maintain sufficient records to show how questioned costs on NRC coritracts are resolved. Within 3 months of receipt of the audit report, the CO will refer any action that is contrary to that recommended by the Inspector General to the Director, DCPM. The Director, DCPM, will resolve the recommendations within the l timeframes delineated in the Memorandum of Understanding between OIG and ADM. (See Exhibit 4 of this handbook.) (iii) i e Note: The CO's resolution of postaward audit recommendations may result in actions adverse to the contractor and could give rise to a contract dispute. The Contract Disputes Act of 1978 establishes the authority of the CO to resolve disputes under a Government contract. The contractor can, however, appeal the CON decision on the dispute to an agency Board of Contract Appeal .r to the U.S.
Claims Court. (a) e The potential exists, therefore, that resolution of postaward audit recommendations will lead to a dispute under a Government contract. Given the regulatory and judicial framework in which decisions on postaward contract audit recommendations are made, only contracting officials selected under4he principles stated in the Federal Acquisition Regulation (FAR 1.603-2) will have the
- authority to overturn or rule on disagreements between COs and
- auditors. Consequently, disagreements between OIG and NRC COs are referred to the Director, DCPM, for resolution. (b)
~
OIG will notify the cognizant audit agency of the final action taken by NRC in response to audit recommendations. (iv) l l Approved: January 13,1993 l 10 (Revised: DRAFT 2/19/98) l
Volume 6g Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Resolution of Audit Recommendations (D)(continued)
Contract Audit Recommendations (4)(continued)
Resolution of audit recommendations as a result of postaward audit reports must be consistent with laws and regulations governing NRC operations. When deemed necessary by the cognizant CO, the advice of the NRC's Office of the General Counsel will be sought. Any decisions by DCPM not to recover questioned costs must be made in writing. (v) -
When it is determined that certain claimed contract costs are unallowable, immediate action must be taken to recover any funds that were improperly paid, or to offset them against undisbursed funds. The CO will provide the Division of Accounting and Finance (DAF),
OCFO, with a copy of the written determination establishing a contractor's indebtedness to NRC so that DAF can establish an accounts receivable for the debt within 30 days of the date of the written determination. The CO also will provide OIG with a copy of the written determination establishing a contractor's indebtedness to NRC. DAF will provide OlG with a statement that the appropriate account receivable has been established and advise the cognizant CO when a contractor has discharged his indebtedness or collection action has been terminated. (vi)
. Review ofImplementation of Corrective Action (s)
NRC Management Followup Reviews (1)
Periodically, the AFO will select a sample of corrective actions and review their implementation to ensure that the action taken resolves the problem identified by the audit. This review will ensure that the corrective action agreed to as a result of audit recommendations has been implemented and the desired effect is being achieved. (a)
The AFO will periodically, but at least annually, select a sample of completed audits in a variety of programs.for followup review. The AFO will inform office directors of the audit followup review and provide the name of the person who will conduct the review. Office directors will be asked to provide the AFO with the name of an office contact who will assist the reviewer. (b)
The reviewer will prepare a brief report to the AFO that includes the following information-(c)
Approved: January 13,1993
, (Revised: DRAFT 2/19/98) 11 l
hclume 6, Intern:1 Manag: ment Resolution and Followup of Audit Recommendations Handbook 6.1 Part I Review ofImplementation of Corrective Action (E)(continued)
NRC Management Followup Reviews (1)(continued) e Recommendation (i)
. Agency response (ii)
. Agency action (iii) -
. Description of how the review was conducted (iv) e Conclusion (v)
The reviewer's report, highlighting findings and any corrective action that is needed, will be submitted to the AFO within 30 days after the audited office is notified of the review. Recommendations resulting from these reviews will be included in the agency's system for tracking corrective actions. (d)
The initiation of reviews will be coordinated with OIG to avoid duplication of effort. (e)
OIG Followup Reviews (2)
OIG will perform reviews of the agency's followup system to determine whether management is carrying out this responsibility in a satisfactory manner. In addition, OIG will perform followup reviews of prior audit recommendations whenever another audit is scheduled in the audit area. This will also serve as a partial basis for OIG's evaluation of the adequacy of the agency's audit followup system. The results of OIG's reviews will be included in the agency's system for tracking corrective actions. (a) l The scope of followup reviews is examination of management's performance in implementing the response concurred in during the management decision process. Followup reports state the results of this examination. Where progress in implementing corrective action is found to be unsatisfactory, the reports identify, to the extent possible, the cause of the situation. (b) l l
Approved: January 13,1993 12 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6,1 Part I Tiracking Corrective Actions (F)
Official Agency System (1)
The AFO will maintain the official agency system to track resolution of audit recommendations and the actions NRC management has agreed to take in response to audit reports. The Director, DCPM, ADM,will maintain a subsystem to track contract audits. Other subsystems may be established with the approval of the AFO.
Unresolved Recommendations (2)
The IG willinclude a statement in each firial audit report regarding any recommendation in the report the IG believes is unresolved. The AFO or an appropriate subsystem mawger will include all unresolved recommendations in the tracking system or subsystem and will monitor the status of these recommendations until a final management decision is made and the recommendation resolved.
Implementation of Corrective Actions (3)
The AFO will track recommendations until the action agreed to by management is implemented. If the AFO or OIG determines upon a subsequent review of the implementation of the corrective action that ;
the problem identified in the audit has not been corrected, the new l corrective action agreed upon by management will be put into the tracking system and monitored in accordance with the above procedure. l Recovery of Funds (4) '
The AFO will track audit recommendations that involve the recovery of funds until the issues have been settled and the related funds have been recovered or the debt is otherwise resolved.
i Approved: January 13,1993 (Revised: DRAFT 2/19/98) 13
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Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part II Part II Accounting and Collection Controls The Office of the Chief Financial Officer (OCFO) will ensure effective recovery action for amounts determined to be owed the Government resulting from resolved audit findings and recommendations. Unless I otherwise required by statute, collection action must be pursued on all claims arising from audit disallowances in accordance with the Federal Claims Collection Standards, " Debt Collection Procedures," the
" Salary Offset Procedures for Collecting Debts Owed by Federal Employees to the Federal Government," and Management Directive 4.1," Accounting Policy and Practices."
Recording Receivables (A)
Amounts due the Government must be recorded promptly as accounts receivable in the Division of Accounting and Finance (DAF), Office of the Chief Financial Officer, upon completion of the actions that entitle NRC to pursue collection of the amounts. Amounts determined to be owed as a result of the audit recommendations will be recorded as I ~
accounts receivable within 30 days of being resolved. These accounts receivable are to be recorded even though the indebtedness is subject to administrative appeal or litigation by persons outside the agency.
Interest Charges (s)
Interest on audit-related debts begins to a,ccrue on the date that the auditee is notified of the debt; however, interest will be waived on the debt or any portion of the debt that is paid in full within 30 days after the i date the auditee is notified of the debt. To discourage unwarranted l
appeals, interest will continue to accrue while an appeal is in progress.
Unless otherwise required by statute or regulation, the interest applied will be that prescribed by the Treasury Financial Manual (I TFM 8025.20).
l Approved: January 13,1993 14 (Revised: DRAFT 2/19/98) i
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part II Allowance for Uncollectible Amounts (C)
NRC management should con, sider the potential for not being able to collect audit-related debts. An allowance account will be established in DAF to reflect the amount of accounts receivable estimated to be uncollectible.
Payment of Debts (D)
Procedures will be established in DAF to ensure tha't the payment of audit-related debts does not result in charges to other Federal programs or in a reduced level of program activity.
Exceptions (E)
There may be instances in which a portion of the funds owed by the NRC on a grant, a contract, or other agreement are held back-(1) e As a safeguard against overpayment. (a)
. Pending completion, final inspection, or approval cf work. (b) l e Under other provisions of a grant or contract. (c)
In these instances, it is not necessary to record a receivable because disallowed costs may be offset against undisbursed funds in the grant or the contract audited. (2) i l
i l
1 Approved: January 13,1993 (Revised: DRAFT 2/19/98) 15 i
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Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Part III Part III Reporting Requirements -
l The Chairman's Report to the i Congress on Management !
Decisions and Final Action on OIG l Recommendations (A)
The Audit Followup Official (AFO) will prepare, for the Chairman's 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 will contain any comments the Chairman believes appropriate 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) l - For which final action had not been taken by the commencement of the reporting period (i) i - On which management decisions were made during the
! reporting period (ii) i - For which final action was taken during the reporting period, meluding-(iii) l . The dollar value of disallowed costs that were recovered by
! management through collection,' offset, property in lieu of cash, or otherwise (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 (Revised: DRAFT 2/19/98)
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Volume 6g Internal Management l
Resolution and Followup of Audit Recommendations Handbook 6.1 Part III l
l The Chairman's Report to the l Congress on Management '
l Decisions and Final Action on OIG Recommendations (A)(continued) e Statistical tables showing the total number of audit reports and the I dollar value of recommendations that funds be put to better use by l management agreed to in a management decision for audit reports-(b)
- For which final action had not been taken by the i 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 the dollar value of recommendations that-(iii) l l
l
. Were actually completed (a)
. Management has subsequently concluded should not or could not be implemented or completed (b)
. A statement with regard to audit reports on which management decisions have been made but final action has not been taken, other than audit reports on which a management decision was made within the preceding year, containing-(c)
- A list of such audit reports and the date each such report was issued (i)
- The dollar value of disallowed costs for each report (ii)
- The dollar value of recommendations that funds be put to better use agreed to by management for each report (iii)
- An explanation of the reason final action has not been taken l
with regard to each such audit report. (Such statement may l exclude audit reports that are under formal administrative or judicial appeal or upon which management of an establishment has agreed to pursue a legislative solution, but shall identify the number of reports in each category so excluded.) (iv) l e The report will be annotated to identify the number of audit reports issued by the Defense Contract Audit Agency and the related dollars that are included in the statistics reported by the agency. (d)
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 17 l
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Volume 6, Internal Management '
Resolution and Followup of Audit Recommendations Handbook 6.1 Part III i l
)
- OIG Semiannual Report to the l Chairman (B)
Pursuant to the Inspector General Act Amendments of 1988, the IG must furnish to the Chairman a semiannual report for transmission to the Congress. The report must describe the results of audit activity during the period, including the status of resolution of audit reports issued.
I l
l Approved: January 13,1993 18 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Glossarv l
Glossary Audit Report. All final reports of audit concerning.NRC programs, operations, and contracts, including interim reports and followup reports issued by the Office of the Inspector General (OIG), the General Accounting Office (GAO), executive branch agencies, and non-Federal organizations.
Interim Audit Report. Report that is issued during the course of an audit whenever the auditors discover information that is, in the auditor's opinion, significant enough to bring to the attention of NRC management before the completion of the audit.
Internal Audit Report. Report of audit, issued by OIG, of NRC programs and operations to evaluate and assess their efficiency and effectiveness and financial statements required by the Chief Financial Officers Act of 1990. Reports may include audits performed by internal or external auditors and may contain monetary and nonmonetary recommendations.
- Financial Audit Report. Report of audit of agency financial statements as required by the Chief Financial Officers Act of 1990. Reports issued by the Inspector General (IG) include audits of financial statements performed by OIG or an independent external auditor as determined by the IG. The GAO may also audit agency financial statements and issue financial audit reports.
Followup Audit Report. Report of OIG followup activity that reviews the implementation of audit recommendations.
Inspection Report. Report of inspection activity by the IG that provides a quick response mechanism for addressing issues associated with fraud, waste, and abuse. An inspection has traits common to both audits and investigations.
L Investigative Report. Report of OIG activity to ascertain and verify
, facts regarding the integrity of NRC programs and operations and to investigate possible irregularities or alleged misconduct by NRC employees and contractors.
Approved: January 13,1993
. (Revised: DRAFT 2/19/98) 19
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Vclume 6, Internal Management I Resolution and Followup of Audit Recommendations ,
_ Handbook 6.1 Glossary l
t Glossary (continued)
L Contract Audit Report. Reports of audit of NRC contractors or grantees issued by OIG or Federal executive agencies such as the l Defense Contract Audit Agency, the Department of Health and Human Services, and the Department of Education, and non-Federal organizations such as accounting firms that conduct State and university audits under the single audit concept. These reports include-l Preaward Contract Audit Report. Report of advisory audit conducted on pending awards where funds have not yet been obligated or awarded. Recommendations pertain to contractor estimates of future costs.
Postaward Contract Audit Report. Report of audit of contract that has been awarded and under which funds have been expended.
These audits are conducted to evaluate the level of contract compliance and may result in monetary recoveries.
Corrective Action. Measures taken to implement resolved audit recommendations.
Disallowed Costs. A questioned cost that management, in a management decision, has sustained or agreed should not be charged to the Government.
Final Action. The completion of all management actions that NRC management has concluded, in a management decision, are necessary with respect to the findings and recommendations included in an audit report. In the event that NRC management concludes no action is necessary, final action occurs when such management decision has been made.
Implementation of Audit Recommendations. Action taken by NRC management in response to audit recommendations.
Management Decision. Management's evaluation of audit findings and
- recommendations, and the issuance of a decision concerning its j response to these findings and recommendations, including any actions deemed necessary.
Approved: January 13,1993 20 (Revised: DRAFT 2/19/98)
l Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Glossary Glossary (continued)
Questioned Cost. A cost question'ed as a result of an alleged violation of law, regulation, contract, grant, cooperative agreement, or other agreement governing the expenditure of funds; a finding that, at the time of the audit, the cost is not supported by adequate documentation; or a finding that, the expenditure of funds for the intended purpose is unnecessary or unreasonable.
Recommendation That Funds Be Put To Better Use. Funds identified in audit recommendations as funds that could be used more efficiently if NRC management took action to implement and complete the recommendation, including reductions in outlays; deobligation of funds from programs or operations; costs not' incurred by implementing recommended improvements related to the operations of the NRC, a contractor, or a grantee; avoidance of unnecessary expenditures noted in preaward reviews of contract or grant agreements; or any other savings that are specifically identified.
Resolution. For most audits, the point at which the audit organization and agency management or contracting officials agree on the action to be taken on reported findings and recommendations and the dollar savings resulting from the management decision in terms of disallowed costs and funds to be put to better use. In event of disagreement, the point at which the Audit Followup Official or,in the case of contract audits, the Director, Division of Contracts and Property Management, Office of Administration, determines the matter to be resolved. The Commission has final resolution authority for internal audits.
An audit report may be considered resolved despite the right of persons outside the agency to negotiate, appeal, or litigate. Resolution of a report with respect to parties outside the Government does not preclude further consideration of issues in the report by agency management.
For preaward contract audits, the point at which agreement is reached, a contract price is negotiated, or a prop,osed award is cancelled, whichever occurs first.
For GAO reports, the point at which the NRC responds to the Congress, as required by the Legislative Reorganization Act of 1970.
Unsupported Cost. A cost questioned by an audit organization because the cost was not supported by adequate documentation at the time of the i audit.
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 21
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Volume 6, Internal Management i
Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits l
Exhibit 1 Sample Response to OIG Audit Report -
l
- 4 j6 UNITED STATES y 't NUCLEAR REGULATORY COMMISSION g ,E WASHINGTON, D.C. 20555
\****+/ (Date) i MEMORANDUM TO: [Name]
Assistant Inspector General for udit l
I FROM: [Name]
Title of appropriate Deputy Ex utive ect t
SUBJECT:
DRAFT REPO - 1ANAGEM T CONTROLS O RN PROPERT OE LABORA S OU B STRE T -NE This responds to the January 31, 97, ran am tran ' mg the subject audit report. I am pleased t ey r conel on that agency project managers have made important pro ss in mi terin and controlling projects placed with DOE laboratories. I re that e nage ent of agency-funded property at DOE should be st the ed rimp vin ma gement controls and implementing a s amlin oce s +o ag ega y track and oversee NRC-funded pro rty O bo t ies.
We have r wed you spec 'c co endations and provide the following respons :
Recomme 1 eps to n a to provide the annual listing of NRC-titled software
/Take a
by an ement Directive (MD) 11.7.
soonse e e ar sending a letter to DOE to remind them of the MD 11.7 re reme provide information on NRC-titled software in their annual i
Approved: January 13,1993 22' (Revised: DRAFT 2/19/98)
, o Volume 6g Internal Management
. Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits Exhibit 1 (continued)
Sample Response to OIG Audit Report (continued)-
property reports. We will also direct DOE to send this information to the Office of Administration (ADM)instead of the Office ofInformation esources Management (IRM), as currently required. This will provid a ce tral focus for review and reconciliation of all NRC-funded property at E1 s (see response to Recommendation 3). We will amend MD 11.7 to re ect t sc e.
Completion: May 30,1997.
Recommendation 2 Reassess the procedures identified in the cu ently oposed revisi st MD 11.7 and other agency documents to more earl efine t expe tations and internal processes for tracking a over in RC- ed p perty maintained at DOElaboratories.
Resnonse Agree. We plan to revis . iD 1. to early ate the process, controls and office ;
responsibilities necessary o e sure >ffe 've m agement and tracking of !
property acquired er )E yreet. nts. Co pletion: May 30,1997.
Recommendati 3 Develop d mai ac ized ventory for tracking and overseeing NRC- nde operty 1aint 'nea ' DOE laboratories.
Respons -
/ e. A D i wi e s sible for developing and maintaining a centralized base of C-f de DOE-held property, including NRC-titled software, ac ire de DO agreements. We will compare this information against the fo ation to ed by DOE in its annual report and will resolve any dis ep cies ADM will also coordinate data regarding NRC-titled software with ens e that accurate and complete inventory information is provided to >
t > Offic of the Controller for capitalization purposes as required for agency fin statements. Completion: July 31,1997.
Please contact me at 415-7443 or Edward L. Halman at 415-6222 should you have any questions regarding our response.
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 23
clume 6, Intern:1 Man:g: ment Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits L
L Exhibit 2 L Sample Response to Draft GAO Report !
l p Rio ug
- p g UNITED STATES
[ S NUCLEAR REGULATORY COMMISSION ,
E E WASHINGTON, D.C. 20555
]
+
% ,, (Date)
Mr. [Name]
Assistant Comptroller General l Resources, Community, and !
Economic Development Division U.S. General Accounting Office
_ Washington, DC 20548
Dear Mr. [Name):
We appreciate the opportunity to comment on t dra U.S. Ge ral ccounting Office (GAO) report " Emergency Pre en s und ' cl r- ilities Needs l Improvement." The report makes se ral cints at e use ul t e U.S. l Nuclear Regulatory Commission RC an o otrier F eral encies involved in l this area, and it highlights several easi ich <e agree further work by NRC may be desirable.
The general tone of the r ort sugg ts t tem ency preparedness by State and local governments ar md ' ens fa ' ties in disarray. Although we agree that improve en n ert be a this area, we believe that the impression left b the re o th c abih ' s and preparedness of State and local officials may doi he a se > . Although short of the results we ultimately sire, we liev level f planning and preparedness is definitely improvi du ~ large rt to e ort and voluntary cooperation of the State and loca nn Specific co me t the o 1mendation in the report are enclosed.
[ Sincerely, x .
[Name]
j / Executive Director I l f for Operations
Enclosure:
Comments on GAO Recommendations Approved: January 13,1993 24 (Revised: DRAFT 2/19/98)
Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits Exhibit 2 (continued)
Enclosure Comments on GAO Recommendations
- 1. Recommendation 1 GAO should distinguish its own conclusions from those o he R c r fety Study (WASH-1400) in the following statement: "The study c clude hat nuclear accidents may happen and would prese otential adve e hea th consequence that provides a sobering contrast t the e ' mated risk." 'ords "in our opinion" should be inserted aft the w ds ealt o equ ce that,in o_ur ooinion, provides" because the " obe n o conti ast" ateme is the GAO conclusion and is not found in VA -140'
- 2. Recommendation 2 The statement "th there 'Iee- uatio of area 25 miles downwind from l the accident site" is isle g si ce e assumed that 30 percent of the populatio ained in lace.
- 3. Recomme a 3 N>
ort cre tes an ' sion that the offsite supportive services from State
[The r d cala ie are aken for granted. The NRC, however, does not take these service grar ted. Specific requirements are set forth in Appendix E to 10 CFR art 5 . s an xample, licensees' emergency plans are required to provide "a'gr s reached with local, State, and Federal officials and agencies for the early warning of the public and for public evacuation or other protective measures l- should such warning, evacuation, or other protection measures become necessary l or desirable."
i Approved: January 13,1993
- (Revised: DRAFT 2/19/98) 25 l 1
klume 6, Intern:1 Mrnagement Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits Exhibit 3 Sample Response to Final GAO Report The Honorable [Name), Chairman Committee on Governmental Affairs United States Senate Washington, DC 20510
Dear Mr. Chairman:
In accordance with the statutory obligation to respond to com 'ndations by the General Accounting Office (GAO), we hereby submit o res ns the recommendations made by the GAO in their report entit "Th Pro m of Disposing of Nuclear Low-Level Waste: Where Do We Go om H e?"
The Commission in its responses to several G ecommsndati s(Item os.3, 4, and 7 of the enclosure) believes that the p tecti of the public al and safety could be enhanced through legislation th- wou establi min um technical and procedural standards fo the dNelo ent d per ion oflow-level waste disposal sites. This legislatio sho assuW th uniform mimum national standards are followed in these eas f bo A reeme an non-Agreement States. Over the past year, tha Co 'ssi ha estified be re several congressional committees ' fas i 6 uch IrisINIion.
~
l Specific comments on the A rec me atio are presented in the enclosure.
Sincerely, Chairman's [Name) losure:
Res nses t GAO mendations cc-^ 'enat N e
\ [Ide i Letters Sent to Those On Attached List)
Approved: January 13,1993 26' (Revised: DRAFT 2/19/98)
I l Volume 6, Internal Management l Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits !
l l Exhibit 3 (continued)
Response to GAO Recommendations i Chanter 2 The GAO stated that addressing several basic questions will alleviate the present disposal problem.
Recommendation 1 What is low-level radioactive waste? GAO Recommendation: "G' e to ri ity to defining low-level waste by establishing categories based upon requireme ts for di osal."
MRC Response The NRC has been aware of this need and will utilize a w e classificatici eth olo in the development of its planned rulemaking (10 CFR Pa 61) licensing an egula n' of the disposal of low-level radioactive-waste (LLW). The C ea 'er commissio a study by Ford, Bacon, Davis Udah, Inc., to characterize - lass' was stre n rom a variety of sources and incorporate this work into the dr t enviro en 1im stat ,ent (EIS) being prepared to accompany the proposed los eve ste regula n. Thi vill allow different types of wastes to be examined against -iffer t es af disp al chniques, and permit interested members of the public to lua. and eco mend alter atives. The Commission anticipates that the proposed low- vel 'aste egula on (10 CFR 61) and its accompanying draft EIS will be published for p blic com ent rlyi 981.
Recommendation 2 Who are the generator of low- c. wa e nd w much waste do they generate? GAO Recommendation: "Det in vho le e a s of low-level waste are in both the Agreement and non-Agree ent s and w uch waste each licensee is generating."
NRC Respons The Commissio no elles th the benefit resulting from a license-by-license determination of vas ' nera b thousands of licensees would offset the cost to the Com ' and to e sees to cumulate this information. This GAO recommendation wil ot res in mea ingful d ional data on LLW volumes and characteristics. As part of 11 e sta o . eff st repare an environmental impact statement (EIS) for the LLW
- d. spos. gulation 10 art 61), the staffis analyzing the volumes and characteristics of di rent wa. rearr s fr m different types oflicensees. There are approximately 8,000 NRC licen d 17, 00 Agreement State licensees ranging from individual physicians to fuel plants and a tors)fowever, preliminary data indicates that the majority of the radioactivity (in excess af 90c7pfcontained in LLW is generated by a relatively small number of NRC and Agreement State licensees (approximateiy 100 licensees).
l Approved: January 13,1993 (Revised: DRAFT 2/19/98) 27
halume 6, Intern:1 Management Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits y Exhibit 3 (continued)
\
The Honorable [Name), Jr., Chairman Committee on Government Reform and Oversight United States House of Representatives Washington, DC 20515 cc: Representative [Name]*
The Honorable [Name], Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Committee on Environment and Public Works United States Senate Washington, DC 20510 cc: Senator [Name]
The Honorable [Name], Chairman Subcommittee on Energy and the E iro t
\
Committee on Interior and Insular fair United States House of Repres tatn s Washington, DC 20515 cc: Representative [Name]
The Honorable [Na e], i n Subcommittee on ergy nd 'er Committee on Ener and merce United Stat ouse o epr e tives Washingt ,D '0515 cc: Repres nta " [ e]
norabl e mp ller Ge[Neral o] nitedh States G unt - fice s ngton, _ 54 The H o ble[Name), Director
~ '
ana : ment and Budget Was ' gton 20503
- The cc is the Ranking Minority Individual on the Committee.
Approved: January 13,1993 28 (Revised: DRAFT 2/19/98)
1 Volume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits Exhibit 4 MCMORANDUM OF UNDERSTANDING y BETWEEN THE OFFICE OF THE INSPECTOR GENERAL AMD THE OFFICE OF ADMINISTRATION Purpose The purpose of relationship this Memorandum between the Divistenr.r i $1nderstanding f Contracts and isProperty to delineate the working Management DCPM ).
Office of Administration. and the uffice of.the Inspector General (OIG)(. U.S.
Nuclear Regulatory Comission (NRC). in oversight and execution of the Defense Centract Audit Agency (DCAA) audits of HRC contracts.
Autnority and Backoround Prior to the beginning of Fiscal Year 1990. the DCPM had sole responsibility for execution and oversight of the DCAA audit program as it related to NRC contracts. The Inspector General Act of 1978. as amenced, however, vests certain responsibilities with the OIG for oversight of all audits of agency programs and contractors. Specifically, this legislation states that one of the principal purposes of the Act is to create an independent and objective CIG to conduct and supervise audits relating to the programs and operations of the agency. Additionally, the OIG is to prcvide leadership and coordination for activities designed to promote economy, efficiency, and effectiveness in the administration of agency programs and operations.
Execution The following provisions provide guidelines for execution and oversight of the DCAA audit program. In general, the OIG will be responsible for oversight of the DCAA audit progrc . ..icluding issuance of reports and compiling and reporting findings. The DCPM will execute the day-to-day activities of the program to support the agency's contracting function and make decisions concerning the course of action on all audit findings.
Pre-award Audits DCPM will initiate the requests for audits with DCAA and provide written copies of the requests to the OIG Planning and Resource Officer.
The DCPM contracting officer will interact with the cognizant DCAA auditor as necessary during the course of the audit. OIG will be infomed of these contacts only in those instances in which potential wrongdoing within the investigative jurisdiction of OIG is identified. DCAA will address the final audit report to the Assistant Inspector General for Audits (AIGA). DCAA will send a copy of each report to the contracting officer. The Inspector General or his designee. whenever possible, will femally issue the final report to the Director. DCPM. within three working days of its receipt by the AIGA. For pre-award audits, the contracting process may continue while the OIG is reviewing the audit report. The cognizant DCPM contracting officer may request a verbal report directly from DCAA prior to the f1hal report being 1ssued whenever he/she deems it necessary to expedite the contracting process.
Approved: January 13,1993 (Revised: DRAFT 2/19/98) 29
. 7 i
&clume 6, Internal Management Resolution and Followup of Audit Recommendations Handbook 6.1 Exhibits l
l Exhibit 4 (continued) l- 2 l
Decisions regarding agency action on DCAA recommendations will be made by the contracting officer, but may be subject to subsequent review by the OIG.
DCPM will promptly provide the DIG Planning and Resource Officer with all required information to be entered into the OIG's tracking systers for DCAA audit reports. -
Post-Award Audits Requests for post-award audits of NRC contracts by DCAA will be 'made by the OIG. Accordingly. DCPM requests for such audits should be made directly to the Inspector General or his designee.
DCAA will submit post-award audit reports to the AIGA. OIG will promptly review and transmit to DCPM each post-award audit report. Within sixty days after receipt of audit reports the Director. DCPM. will advise the Inspector General of action.;, taken on the following DCAA findings:
(a) questioned costs under active contracts.
(b) allegations of wrongdoing (waste. fraud or abuse) on the part of contractors, and (c) questioned costs which exceed $20,000 under inactive contracts.
All other DCAA audit reports containing questioned costs will be resolved in accordance with time frames specitled in DMB Circular A-50. In the event the Director. DCPM disagrees with questioned costs in DCAA audit reports and is i unable to resolve those disagreements with the IG. those disagreements will be !
referred to NRC's Auoit Follow-Up Official (Assistant for Operations. OEDO).
for resolution a4 requirwa by OMB Circular A-50.
The O!G may request DCAA to conduct post-award contract audits when in the opinion of the O!G. **4C. audits are necessary.
Amendments anc Supplemental Agreements The Inspector General and the Director. Office of Administration. by mutual agreement may amend this document or enter into any supplementary agreements as they deem appropriate.
Limitations The policies and authorities consained in this document shall go into effect when signed by both the Inspector General and the Director. Office of Administration and shall remain in effect unless changed by mutual agreement.
/
/ Yls ----
3Grtin G. Mansch Inspector General (Acting)
Office of the Inspector General Arj A A e[-
Patricia G. horry. Director Office of Administration
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AY S ~* % W p-i l
l Approved: January 13,1993 30 (Revised: DRAFT 2/19/98)
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