ML24309A281

LIC-111, Revision 2 Regulatory Audits

ML24309A281
Person / Time
Issue date:	12/30/2024
From:	Mahesh Chawla Division of Operating Reactor Licensing
To:
References
LIC-111, Rev 2
Download: ML24309A281 (1)

Text

OFFICE OF NUCLEAR REACTOR REGULATION LIC-111, Revision 2 Regulatory Audits Volume 100 Licensing Processes Approved By:

Aida Rivera-Varona Date Approved:

December 19, 2024 Effective Date:

December 30, 2024 Certification Date:

December 30, 2029 Responsible Organizations:

DORL and DNRL Primary Contacts:

Mahesh Chawla Allen Fetter Mahesh.Chawla@nrc.gov Allen.Fetter@nrc.gov 301-415-8371 301-415-8556 Summary: This revision, as a periodic update, was updated to capture best practices for regulatory audits. The objective of this instruction is to provide guidance to staff who conduct regulatory audits.

Training:

None ADAMS Accession No.:

ML24309A281 TABLE OF CONTENTS

1.

POLICY................................................................................................................................. 2

2.

OBJECTIVES........................................................................................................................ 2

3.

BACKGROUND.................................................................................................................... 2

4.

BASIC REQUIREMENTS..................................................................................................... 6

5.

RESPONSIBILITIES AND AUTHORITIES......................................................................... 15

6.

PERFORMANCE MEASURES........................................................................................... 15

7.

PRIMARY CONTACT......................................................................................................... 16

8.

RESPONSIBLE ORGANIZATION...................................................................................... 16

9.

EFFECTIVE DATE.............................................................................................................. 16

10.

CERTIFICATION DATE...................................................................................................... 16

11.

REFERENCES.................................................................................................................... 16

ML24309A281

• concurrence via email OFFICE NRR/DORL/LPL4/PM NRR/DNRL/NLIB/PM*

NRR/DORL/LPL4/LA*

NRR/DORL/LPL4/BC(A)*

NAME MChawla AFetter PBlechman TNakanishi DATE 11/4/2024 11/5/2024 11/12/2024 11/13/2024 OFFICE NRR/DANU/D*

NRR/DEX/D*

NRR/DNRL/D*

NRR/DRO/D*

NAME JBowen(MWentzel)

EBenner MSampson PMcKenna(MFannon for)

DATE 12/9/2024 11/25/2024 11/25/2024 11/22/2024 OFFICE NRR/DRA/D(A)*

NRR/DSS/D*

NSIR/DPR/DD*

NRR/DRMA/D*

NAME MKhanna(SLav for)

TClark(VCusumano for) MWaters DMarcano DATE 11/22/2024 11/22/2024 11/26/2024 12/3/2024 OFFICE NRR/DORL/D(A)*

NAME JPelton (ARivera for)

DATE 12/19/2024

NRR Office Instruction LIC-111, Revision 2 Page 2 of 18

1.

POLICY As discussed in this guidance, regulatory audits are a tool available to the U.S. Nuclear Regulatory Commission (NRC) staff that can help to efficiently gain understanding, verify information, and/or identify information that will require docketing to support a staff decision. Consistent with the principles of good regulation, as modern, risk-informed regulators, the Office of Nuclear Reactor Regulation (NRR) staff are encouraged to use regulatory audits, as appropriate, to improve efficiency and effectiveness in their regulatory activities. It is the policy of NRC to reduce unnecessary regulatory burden from the applicants and NRC-regulated stakeholders.

2.

OBJECTIVES This office instruction (OI) provides guidance to staff who participate in regulatory audits of information developed, maintained, and submitted by licensees, pre-applicants, applicants, vendors, and other entities related to nuclear reactor regulation (herein, referred to as licensees).

3.

BACKGROUND 3.1 Definitions Regulatory Audit A regulatory audit is a process by which the NRC staff examines and evaluates information provided by the licensees with the intent to gain understanding, verify information, and/or identify information that will require docketing to support the basis of a licensing or regulatory decision.

Audit Team Member An NRC staff member, or contractor, with the knowledge and skills necessary to effectively perform the regulatory audit activities and is assigned by the responsible supervisor(s).

Project Manager The project manager (PM) has the overall responsibility for interacting with the licensee and the staff to promptly schedule the audit and coordinate issuing the audit plan and process any audit questions.

Audit Team Leader The staff member (either PM or technical reviewer) with the overall responsibility for the conduct of the regulatory audit who is assigned by the appropriate responsible supervisor(s).

NRR Office Instruction LIC-111, Revision 2 Page 3 of 18 Supporting Materials Supporting documentary materials are documents that are reviewed, examined, or evaluated during the audit that support the licensing action requested by a licensee. Audit supporting materials are supplied by the licensee and/or prepared by the NRC staff that are necessary to enable the NRC to reach a regulatory decision. Supporting materials for decision-making are not working files.

Supporting materials are part of the official record, and when supplied by the licensee must be submitted on the docket.

Working Files Working files are documents generated by the NRC staff over the course of the audit, such as personal notes, rough notes, calculations, or drafts assembled or created and used to prepare or analyze other documents. They can contain background files, such as worksheets, questionnaires, extra copies of articles, reports, studies, information, and documentary materials. Working files may need to be considered official agency records (OARs) as explained in section 4.6.

Working files that do not meet the requirements to be categorized as records are not part of the agencys official record collections (see Management Directive (MD) 3.53 NRC Records and Document Management Program). However, working files are not exempt from Freedom of Information Act (FOIA) consideration.

3.2 General Information/Requirements Title 10 of the Code of Federal Regulations (10 CFR) Section 50.4, Written communications, requires licensees to provide certain written correspondence to the NRC. Additional requirements are provided for the licensees maintenance and retention of documents. For example, the regulations under 10 CFR 2.101, Filing of application; 10 CFR 50.4, 10 CFR 54.17, Filing of application; and 10 CFR 52.3, Written communications; require applications for permits and licenses, amendments to applications, and applications for amendment of permits and licenses to be sent to the NRC. The appendices to 10 CFR Part 52, Licenses, Certifications, and Approvals for Nuclear Power Plants, and 10 CFR 50.71, Maintenance of records, making of reports, require that records connected to licensed or regulated activities be maintained by the licensee.

Section 54.37 of 10 CFR, Additional records and recordkeeping requirements, requires that license renewal applicants maintain documents demonstrating compliance with the requirements of 10 CFR Part 54, Requirements for Renewal of Operating Licenses for Nuclear Power Plants, in auditable and retrievable form.

A regulatory audit is part of a larger regulatory action. Performing a regulatory audit may allow the NRC staff to conduct its review more efficiently or gain insights on the licensees programs or processes. For example, when an application or a licensing action request is reviewed by the NRC, the information that the staff relies upon to make the regulatory finding must be submitted on the docket. However, there may be other information that is not submitted on the docket but is retained by a licensee under 10 CFR 50.71 and/or 10 CFR 54.37, as applicable, that would help the staff better understand the information

NRR Office Instruction LIC-111, Revision 2 Page 4 of 18 submitted by a licensee. Examples of such material include detailed calculations and procedures.

A regulatory audit may focus on specific documents or may be performed by sampling analyses and information in support of the regulatory action. A regulatory audit may be conducted virtually through licensee electronic portals, at one facility, all affected facilities, or a sampling, as necessary to support the regulatory action.

A regulatory audit may require technical review from more than one NRC office.

In such cases, the audit team leader should consider if coordination with other offices is appropriate to support technical consistency.

The areas for which the NRC staff may conduct a regulatory audit include, but are not limited to, the following:

license renewal applications; fleet-wide or plant-specific licensing action requests; topical reports; generic communications closeout process; site characterization activities, such as core borings (e.g., see Agencywide Documents Access and Management System (ADAMS)

Accession No. ML23229A006);

applications for design certifications (DCs), standard design approvals (SDAs), construction permits (CPs), operating licenses (OLs), combined licenses (COLs), early site permits (ESPs), limited work authorizations, or manufacturing licenses; and amendments or renewal of CPs, OLs, manufacturing licenses, DCs, COLs, or ESPs.

Regulatory audits allow the NRC staff to do the following:

Gain a better understanding of the detailed calculations, analyses and/or bases underlying the formal application and confirm the NRC staffs understanding of the application.

Identify additional information necessary for the NRC staff to reach a licensing or regulatory decision that the licensee should provide as a supplement to the application.

Establish an understanding of an area where the NRC staff has identified potential concerns to enable the staff to issue clear requests for information and for the licensee to provide quality and timely responses.

NRR Office Instruction LIC-111, Revision 2 Page 5 of 18 Establish an understanding of potential concerns to inform future regulatory actions or decisions.

Establish or enhance the NRC staffs understanding of proposed modification(s) or resolution(s) in support of a regulatory action or decision.

Confirm the licensees implementation of programs or processes that track commitments or industry initiatives, or other actions that might support a regulatory action or decision.

When planning an audit, consideration should be given to overall efficiency and effectiveness. This can include benefits from in-person and hybrid audits, as well as fully virtual audits when that makes sense. This should be evaluated by the PM and the technical lead, and relevant branch chiefs.

The types of information that the NRC staff may audit include, but are not limited to, the following: (1) process information, (2) procedures, (3) calculations, (4) design basis information, and (5) computer/software code(s) and input/output files. The staff can review computer code and simulation files through visual examinations or walk-in demonstrations by the licensee. Alternatively, the staff may request that the executable code and input/output files be submitted on the docket for further examination and confirmatory runs.

3.3 Selection of Audit Team Leader and Audit Team Members The audit team leader and audit team members are designated by the appropriate responsible supervisors. Audit team members may include PMs, technical reviewers, senior level staff, supervisors, contractors, and staff from other NRC offices or government agencies.

Audit team members should possess the technical and/or regulatory knowledge to work effectively and efficiently in the audit setting and interact with the licensees staff. Additionally, the audit team leader and/or the PM should possess the ability to coordinate small groups and interact with the licensees staff and management. These skills are assessed by the supervisor when assigning team members and leader to perform specific audit activities.

It is the expectation that at least one audit team member will be qualified (preferably the team leader) through a formal qualification program such as NRR OI ADM-504, Qualification Program, or Inspection Manual Chapter (IMC) 1245,

[Inspector] Qualification Program for Reactor Inspectors. However, the selection is at the discretion of the supervisor.

NRR Office Instruction LIC-111, Revision 2 Page 6 of 18

4.

BASIC REQUIREMENTS The amount of detail included in the audit preparation, audit plan, execution of the audit, and audit documentation should be commensurate with the scope, complexity, and size of the audit. That is, a large team, onsite audit should provide more details in the audit plan, as well as ensure more coordination in case of operating plants, with the Region, PM, and licensee, than a one-person audit of selected calculations. To foster agency openness and transparency, and ensure licensee preparedness for an audit, audit plans must be sent to the licensee prior to the audit. To ensure the audit is effective and efficient, the audit plan should be issued at least 14 calendar days prior to the beginning of an audit, or as coordinated with the licensee 4.1 Regulatory Audit Preparations Regulatory audits may be conducted at any facility, including a plant site, licensees headquarters, contractor facility, or vendor site, and in NRC buildings.

Audits may also be conducted virtually, using licensee electronic portals, as discussed in section 4.4 below. Regulatory audits conducted at reactor sites should be coordinated with the licensee, regional NRC office, and resident inspectors, as appropriate. The focal point for this coordination should normally be the assigned NRR PM for the project. In the case of a license renewal regulatory audit, the license renewal PM will coordinate with the licensee and the regional office and will keep the NRR operating reactor PM informed. For audits related to high-profile matters or issues under litigation, the cognizant PM should consult with the Office of General Counsel (OGC) to determine if communications (e.g., audit plans) associated with the audit preparations require OGC concurrence.

Once approved, the audit plan (described in section 4.2 below) is provided to the audit team members and the licensee, so that all participants can prepare for the regulatory audit. Note that audit plans are considered official agency records and need to be placed in (ADAMS) and made publicly available, with sensitive and proprietary information redacted, if applicable.

The audit team leader and/or PM should consider holding a pre-audit meeting with the audit team members and responsible supervisor to discuss assignments and expectations. The audit team leader or cognizant PM should discuss the audit plan with the licensee and request the licensee to provide space (if in person), documentation, access to subject matter experts, and other necessary items. To the extent possible, the audit team leader should prepare a list of information needs, including documents, discussion topics, related audit questions, and any other special requests that are needed to support the audit.

These items should be added to the audit plan (described below) and communicated to the licensee in writing, typically 14 calendar days before the regulatory audit (with exception of some virtual audits that may not require 14 days). Early interactions with the licensee should also address issues such as access controls, security requirements, and other policies and procedures affecting the audit team.

The audit information needs list does not necessarily take the place of a request for additional information (RAI) or otherwise change whether information will

NRR Office Instruction LIC-111, Revision 2 Page 7 of 18 ultimately need to be officially submitted to support the NRC staffs licensing or regulatory decision. In lieu of formal RAIs, the licensee may choose to voluntarily place the requested material on the docket, thereby possibly eliminating the need for an RAI.

If the PM or audit leader determines that an RAI would be appropriate for resolving an audit item, the PM or audit leader should consult and coordinate with technical reviewers and technical branch chiefs to ensure alignment (and for high profile technical issues, division management).

4.2 Regulatory Audit Plans A regulatory audit plan is essential to conduction of an efficient and effective audit. The plan should include a clear, succinct overview of the regulatory audit activities. The audit plan should identify the licensees, describe the scope of the regulatory audit, discuss major areas of emphasis for the regulatory audit, identify key participants, and provide the basis, background, schedule, and logistics for the regulatory audit. The audit plan provides structure and organization for the regulatory audit and serves as an integral planning tool for the audit team member(s).

It is recommended, for highly complex licensing actions, developing a high-quality draft safety evaluation (SE) with open items before finalizing the audit plan is a key component to minimizing the time associated with audit activities.

The draft SE with open items supports the NRC staff with preparing audit questions that provide a clear explanation to support their regulatory finding.

Also, having the SE prepared in advance improves efficiency and effectiveness by giving staff greater insight to determine the documents, presentations, and other materials necessary for an audit.

The level of detail of the regulatory audit plan should be commensurate with the desired audit scope. The audit plan should be comprehensive, yet concise and the page length should correspond to the complexity of a given audit. For example, a simple audit plan is normally 1 to 2 pages in length, while a more complex audit plan may be 8 to 10 pages or more. The audit plan should include the recommended contents, as applicable, listed below:

a. Background. This section provides a brief introduction of the licensee and licensing action, application, topical report, generic communication, or program associated with or reason for the regulatory audit.

b. Regulatory Audit Bases. This section identifies the documents upon which the regulatory audit is based. This may include, but not limited to, sections of the licensing action request, COL, CP, OL, ML, DC, SDA, or ESP application, 10 CFR Part 50, 10 CFR Part 52, 10 CFR Part 54, Commission guidance through staff requirements memoranda (SRMs) to SECYs and Commission policy statements (e.g., Use of Probabilistic Risk Assessment Methods in Nuclear Regulatory Activities; Final Policy Statement (60 FR 42622; August 16, 1995), applicable sections of the Standard Review Plan (SRP), and/or regulatory guides.

NRR Office Instruction LIC-111, Revision 2 Page 8 of 18

c. Regulatory Audit Scope or Methodology. This section identifies the areas of focus for the regulatory audit (e.g., process information, calculations) and describes the method in which the regulatory audit will be conducted.

d. Information and Other Material Necessary for the Regulatory Audit. This section identifies known information (information needs) or material needed by the audit team member(s) to complete the regulatory audit.

This could include, but is not limited to, licensee reports, calculations, data, and computer codes. Inclusion of discussion topics in this section helps ensure that a licensee has appropriate technical experts to support an efficient and effective audit.

e. Team Assignments. This section identifies the audit team members and their respective area(s) of responsibility.

f.

Logistics. This section documents the date and location(s) for the regulatory audit, including phases (for extended or long-term audits);

entrance and exit briefing dates and times; and audit schedule.

g. Special Requests. This section may document any requests of the licensee by the team to support the audit.

h. Deliverables. This section identifies the deliverables for the regulatory audit and establishes the target schedule for the deliverables. At a minimum, a schedule for issuance of the regulatory audit summary report should be provided.

i.

References. This section identifies references that may be applicable to the regulatory audit.

4.3 Conducting Entrance, Closing, Exit, and Status Briefings:

Prior to the start of an audit, an entrance briefing with the licensee is recommended. Entrance briefings should be scheduled in advance and should be conducted as soon as practicable after arrival, if the audit is in-person. At the entrance briefing, the audit team leader should review key elements of the regulatory audit plan with the licensee.

For multiple-day audits, the audit team leader should consider status briefings with the responsible NRC supervisor. As needed, the audit team leader should also consider periodic status briefings, including daily debriefing at the end of each day, or weekly debriefing for longer period audits, virtually through licensee electronic portals or in person (e.g., audits for new reactors) with the licensee to discuss progress and potential issues identified. The audit team leader should consider briefing the responsible supervisor on the preliminary audit results and observations prior to the closing or exit briefing.

If an audit is conducted in several phases, at multiple locations and/or discontinuous time frames, the audit team member(s) should conduct a closing briefing at the end of each phase. The closing briefing should summarize the

NRR Office Instruction LIC-111, Revision 2 Page 9 of 18 status of the audit at the time of the closing and detail the logistics of the subsequent audit phase.

An exit briefing should be conducted at the conclusion of the audit. Preliminary results should be presented emphasizing that these are preliminary in nature and subject to NRC management review. It should be noted to the licensee that the agency will communicate any significant changes between the preliminary audit results and the regulatory audit summary report prior to issuance.

Note: Similar to inspections, entrance and exit briefings are generally neither noticed nor conducted as public meetings. Attendance for these briefings should be limited to licensees, contractors, and NRC staff.

4.4 Conducting Regulatory Audit Activities Audit team members activities during the regulatory audit and interactions with the licensee should be clearly linked to the NRC staffs guidance, such as in the SRP, recognizing that much of the material discussed and audited may not require docketing. Information that will be relied on to make a regulatory finding must be submitted on the docket and be in ADAMS. This may be accomplished via a response to an RAI, or through formal correspondence submitted voluntarily by the licensee, consistent with NRC rules and regulations.

Audit team members should use their time to audit detailed reports, design record files, and process information or procedures not required to be submitted by the licensee. Discussions with the licensees staff may be held for the audit team members to gain a better understanding of how the information being audited was used by the licensee.

Audit team members may review controlled copies of the licensees records and documents at any time during the regulatory audit. When the licensee uses a form to request controlled documents from its storage facility or document control center, the audit team members may fill out this form following the licensees procedures.

As an expected practice, non-docketed licensee information (information that has not been formally submitted through the document control desk) should not be taken from the audit site, unless deemed merited by the circumstances. An example of a circumstance that merits taking information or material from the audit site is as follows: immediately obtaining material or information would be useful for the purposes of the agency mission (e.g., by helping expedite resolution of a safety significant issue) or enhancing review schedule efficiencies.

Before any information is taken from an audit site, the audit team leader will determine if the request is reasonable and useful for the purposes of review efficiency, and then obtain the licensees permission to take a copy of the information. Prior to taking any of the licensees documents, the NRC will give the licensee the opportunity to mark the documents in accordance with 10 CFR 2.390(b). Information taken from the audit site must be handled in accordance with federal records requirements and applicable NRC guidance, including MD 3.53 and should be documented in the audit summary report. Note,

NRR Office Instruction LIC-111, Revision 2 Page 10 of 18 however, that taking and properly handling information from an audit is not the same as informally borrowing material from the licensee.

Information such as electronic data files, computer codes, and procedures cannot be temporarily borrowed by the NRC staff. If the staff requires time to review such information, it must be done at the audit location under the control of the licensee, or the information must be requested for docketing.

Other tools, such as an online portal, may be used by NRC staff to view non-docketed information. If the licensee has not previously established an online portal agreement with the NRC, the NRC PM should pursue one (example agreement: ML24058A353). In case of certain portal requirements resulting in difficulties for certain audit team members, the audit team lead/PM should work with the licensee/applicant vendor for alternative means to access the portal. The audit plan should address whether the entire audit or portions of the audit will be conducted online. For the latter, the audit plan should include the list of audit team members who may be granted access to the online portals and the list of documents to be put on the portal for its review.

NRC staff and contractors shall not download, copy, print, or otherwise store any online portal documents. Audit team members should be reminded of this prior to starting the audit. The licensee should be instructed to establish measures to prevent the downloading, copying, or otherwise storing of any online portal documents by the staff or any NRC contractors accessing the portal. These measures should be sufficient to preclude the staff from receiving, accepting, or collecting information posted on an online portal and prevent that information from becoming an official agency record subject to retention per MD 3.53.

During a regulatory audit, the staff may identify a potential inadequacy, programmatic deficiency, non-compliance, or operability concern. An issue that may be an immediate safety or operability concern should be reported to NRC management at once. Potential issues should be communicated to NRR and regional management, the licensee, and/or resident inspectors, as appropriate. If a follow-up inspection is necessary, the regional staff may plan an inspection in accordance with NRC procedures.

4.5 Documenting the Regulatory Audit At the completion of the regulatory audit, a comprehensive audit summary report that can be made public will be developed and provided to the licensee. If sensitive information is involved, a non-public version of the report should be prepared and provided to the licensee for cross-checking any proprietary or sensitive information to fully summarize the audit as described below.

The regulatory audit summary report should be placed on the docket and in ADAMS within 90 days of the completion of the audit or before the regulatory action that the audit supports is completed, whichever is shorter. If multiple audits are conducted for the same licensee (e.g., license renewal audits, pre-application submittals, new reactor application audits), audit summary reports should be consistent in their structure and content. Specifically, if similar audits are conducted for multiple licensees, the audits should be documented consistently.

NRR Office Instruction LIC-111, Revision 2 Page 11 of 18 In some cases, it may be beneficial to include interim audit status summaries as necessary to highlight issues identified by reviewers or the length of the audit (e.g., combined emergency plans/post demonstration drills - see example ML24193A243).

The regulatory audit summary report should provide a clear, comprehensive summary of the audit activities, and as applicable should:

identify the audit location(s) and date(s);

list the audit team members; list licensee staff or its contractors that participated in substantive discussions; list documents that were audited; describe the audit activities; audit observations; describe the closing or exit briefing; either identify RAI(s) or potential RAI(s) that were discussed or that will be issued in separate correspondence based on the audit; document audit questions/discussion topics that were not previously identified in the audit plan or any other docketed correspondence (see section 4.6 of this instruction for OAR preservation responsibilities);

describe open item(s) and the proposed closure path(s); and describe deviations from the audit plan.

The list of the audited documents should be sufficiently detailed to retrieve the information through the licensees document control process. For example, include title, date, revision number, and supplement number for each document.

If there are any open items at the end of an audit, a closure path should be identified in the audit summary report. An exception would be in the case of planned multi-phase audits. Multi-phase audits can be documented in a single comprehensive audit summary report. If RAIs are necessary, they should be prepared in accordance with the audit plan schedule or as identified on the audit summary report and issued in accordance with the latest RAI guidance.

The NRC staff must not make final licensing conclusions or staff findings in the audit summary report because licensing and regulatory decisions cannot be made solely based on an audit. However, thorough documentation of audit observations and how audit items were addressed are important for the administrative record. The staff may refer to the regulatory audit summary report

NRR Office Instruction LIC-111, Revision 2 Page 12 of 18 or include a discussion of the audit activities in an SE. As such, an audit summary report documents facts and observations, and it should be prepared with this in mind. In other words, audit summary reports should be clear, logical, and use plain language.

The audit team leader is responsible for ensuring that the content of the regulatory audit summary report accurately reflects the audit activities, and the information communicated during the audit and in the exit briefing. It is a standard practice to share a draft version of the audit summary report with the licensee, using secure methods, for a check of any factual errors, sensitive and/or proprietary information, as discussed in section 4.6 below under Exchange of Draft Information. This process should be done in accordance with guidance contained in the latest versions of NRR OI LIC-101, License Amendment Review Procedures; COM-204, Informal Interfacing with and Handling Documents from Owners Groups, Vendors, Nuclear Energy Institute, Licensees, and Other External Stakeholders; and MD 3.4, Release of Information to the Public.

4.6 Controlling and Disposing of Documents and Records Audit team members have the responsibility to follow Agency and Office policies on handling documents, including guidance on:

Retaining OARs Responding to FOIA requests Handling sensitive unclassified non-safeguards information (SUNSI)

(including proprietary information) or controlled unclassified information (CUI)

Handling safeguards information (SGI)

Handling draft licensee information Handling working files, supporting material, or personal notes Handling pre-decisional information Dispositioning records Official Agency Records Audit team members have the responsibility to preserve OARs. They should not make documents or portions of documents that fall within the exempt categories, such as 10 CFR 2.390, Public inspections, exemptions, requests for withholding, and 10 CFR 9.13, Definitions, publicly available. Further information may be found in MD 3.53.

Provided below is excerpted guidance on determining OARs:

Was it created or received by my organization to conduct agency business?

Does it contain information that documents agency functions, policies, decisions, operations, procedures, mission, or activities?

NRR Office Instruction LIC-111, Revision 2 Page 13 of 18 Is it something on which an action was taken, or commented on behalf of the agency?

Does it document business decisions, actions, advice, order of events, when something happened or who was involved in it?

Is it an original document that doesnt exist elsewhere but is work-related?

If a hearing has been requested or if there is a potential for a hearing request, there are further requirements on documents removed from the licensees site.

NRC staff should follow the NRR OI on support of the hearing process (LIC-201, NRR Support to the Hearing Process or successor OI, if applicable), as it provides detailed guidance on the staffs responsibility to retain documents related to its reviews and audits if a hearing has been or potentially may be requested.

Freedom of Information Act Requests (FOIA)

Audit team members have the responsibility to adhere to the guidelines for a FOIA request. Any document docketed, or not, in an NRC employees possession at the time of a FOIA request must be considered under the FOIA criteria. For more information see MD 3.1, Freedom of Information Act.

Proprietary, Sensitive, and Safeguards Information (SGI)

Audit team members have the responsibility to protect the licensees SGI and SUNSI, including proprietary information. If information is removed from the audit site (see section 4.4 above), all precautions should be followed to prevent the inadvertent release of SUNSI and SGI. Further details may be found in MD 12.2, NRC Classified Information Security Program; MD 12.6, NRC Controlled Unclassified Information (CUI) Program; and MD 12.7, NRC Safeguards Information Security Program for more details.

Draft Licensee Information While draft information may be reviewed during an audit, it should generally not be requested to be put on the docket or physically accepted by audit team members. If draft information needs to be reviewed as part of the audit, it should be preserved when it is needed to provide a complete record of the decision-making process. That is, if the draft licensee information was received by the agency in connection with the transaction of agency business, the draft information should be preserved if it is necessary for a proper understanding of the agencys formulation and execution of basic policies, decisions, actions, or responsibilities. Further information on OARs may be found in NRR OI LIC-101.

If a hearing has been or may be requested, all communications between the NRC staff and the licensee should be retained. NRR OI LIC-201 provides guidance on the staffs responsibility to retain NRC staff and licensee communications.

NRR Office Instruction LIC-111, Revision 2 Page 14 of 18 Working Files and Supporting Materials As defined in section 3.1, supporting materials are documents that are necessary to enable the NRC to reach a regulatory decision. As discussed in MD 3.53, working files must be maintained and filed with the official record for the purposes of adequate and proper documentation if they meet both of the following conditions: (1) they were/are circulated or made available to employees, other than the creator, for official purposes such as approval, comment, action, recommendation, follow up, or to communicate with agency staff about agency business, and (2) they contain unique information such as substantive annotations or comments included therein, that adds to the proper understanding of the agency's formulation and execution of basic policies, decisions, actions, or responsibilities.

Unless required to be maintained and filed with official records, working files, such as personal notes, informal comments, and drafts, can be destroyed/

deleted once they are incorporated into a final product. Special attention should be given to notebooks, calculations, and other background material that may contain information needed to supplement formal records (i.e., supporting material).

[Note: Working files are not exempt from FOIA consideration]

Draft Audit Reports As discussed in Section 4.5 above, the NRC staff must not make final licensing conclusions or staff findings in the audit summary report because licensing and regulatory decisions cannot be made solely based on an audit. A draft version of the audit summary report may be shared with the licensee, using secure methods, to check sensitive and/or proprietary information, and any factual errors. Prior to the sharing of a draft audit summary report with a licensee, the report should go through the level of review and concurrence that is required for final release of the document. In addition to ensuring the information in draft audit summary reports is correct, exchange of draft information with licensees helps ensure against the public release and disclosure of sensitive and proprietary information.

Consistent with MD 3.4, the NRR Office Director has determined that approval authority for the sharing of draft audit summary reports on matters that are not high-profile, contentious, or under litigation is appropriate at the NRR Division Director level or Branch Chief level (at the discretion of the Division). For audits on high-profile, contentious matters or issues under litigation, approval authority is at NRR Deputy Office Director level, unless delegated otherwise.

Records Disposition Information necessary to support the licensing or regulatory decision should be placed on the docket by the licensee or NRC staff. Licensee documents in the possession and control of the staff and not otherwise formally submitted by the licensee should be retained and placed on the docket and in ADAMS if the

NRR Office Instruction LIC-111, Revision 2 Page 15 of 18 criteria in MD 3.53 are satisfied. The staff should properly dispose of licensee and draft NRC documents as appropriate for the classification of the information.

A list of the audited documents will be included in the regulatory audit summary, which becomes an OAR.

5.

RESPONSIBILITIES AND AUTHORITIES Director, NRR Establish the policies contained within this office instruction related to the conduct of regulatory audits performed by the staff.

When necessary, responsible for approving the exchange of draft information with licensees for high-profile matters (consistent with MD 3.4).

Division Directors and Deputy Division Directors (ALL)

Responsible for the oversight of all regulatory audits conducted within the auspices of their program/process.

When necessary, division directors, their deputies, or designees, are responsible for approving the exchange of draft information with licensees for normal matters (consistent with MD 3.4).

Branch Chiefs (ALL)

Responsible for the planning and implementation of regulatory audits conducted within the auspices of their programs and processes.

Responsible Branch Chief or Team Leader Assigns an individual as the audit team leader. Assigns or coordinates responsible individuals as audit team members. Approves audit plan. Ensures timely deliverables as established in the audit plan.

Staff Members All staff members are responsible for following the procedures in this office instruction.

Staff members assigned to perform regulatory audit activities will follow the guidelines described in this office instruction and references.

6.

PERFORMANCE MEASURES None.

7.

PRIMARY CONTACTS Mahesh Chawla Allen Fetter Mahesh.Chawla@nrc.gov Allen.Fetter@nrc.gov 301-415-8371 301-415-8556

NRR Office Instruction LIC-111, Revision 2 Page 16 of 18

8.

RESPONSIBLE ORGANIZATION(S)

DORL and DNRL

9.

EFFECTIVE DATE December 30, 2024

10. CERTIFICATION DATE December 30, 2029

11. REFERENCES

1.

U.S. Code of Federal Regulations, Agency Rules of Practice and Procedure, Part 2, Chapter I, Title 10, Energy.

2.

U.S. Code of Federal Regulations, Public Records, Part 9, Chapter I, Title 10, Energy.

3.

U.S. Code of Federal Regulations, Domestic Licensing of Production and Utilization Facilities, Part 50, Chapter I, Title 10, Energy.

4.

U.S. Code of Federal Regulations,, Licenses, Certifications, and Approvals for Nuclear Power Plants, Part 52, Chapter I, Title 10, Energy.

5.

U.S. Code of Federal Regulations, Requirements for Renewal of Operating Licenses for Nuclear Power Plants. Licenses, Certifications, and Approvals for Nuclear Power Plants, Part 54, Chapter I, Title 10, Energy.

6.

Coovert, N., U.S. Nuclear Regulatory Commission, letter to S. Hunnewell, Tennessee Valley Authority, NRC Audit of Subsurface Investigation Activities at Clinch River Nuclear Project Site, dated August 18, 2023 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML23229A006).

7.

Wentzel, M., U.S. Nuclear Regulatory Commission, letter to B. Rearden, X Energy, LLC, X Energy, LLC., Xenith Microreactor - Online Reference Portal Information Access Agreement, dated April 17, 2024 (ML24058A353).

8.

Poole, J., U.S. Nuclear Regulatory Commission, letter to B. Coffey, Florida Power and Light Company, NextEra Energy Point Beach, LLC and NextEra Energy Seabrook, LLC, Point Beach Nuclear Plant, Units 1 and 2; Seabrook Station; St. Lucie Plant, Units 1 and 2; and Turkey Point Nuclear Generating, Units 1 and 2 - Interim Audit Summary Report in Support of Review of License Amendment Requests Regarding Fleet Emergency Plan Amendment (EPID L-2022-LLA-0146), dated July 12, 2024 (ML24193A243).

9.

U.S. Nuclear Regulatory Commission, Management Directive 3.1, Freedom of Information Act. dated February 26, 2021 (ML16110A398).

NRR Office Instruction LIC-111, Revision 2 Page 17 of 18

10.

U.S. Nuclear Regulatory Commission, Management Directive 3.4, Release of Information to the Public, dated February 6, 2009 (ML080310417).

11.

U.S. Nuclear Regulatory Commission, Management Directive 3.23, Mail Management, dated October 17, 2014 (ML18073A111).

12.

U.S. Nuclear Regulatory Commission, Management Directive 3.53, NRC Records and Document Management Program, dated March 15, 2007 (ML071160026).

13.

U.S. Nuclear Regulatory Commission, Management Directive 12.2, NRC Classified Information Security Program, dated October 27, 2023 (ML23240A513).

14.

U.S. Nuclear Regulatory Commission, Management Directive 12.6, NRC Controlled Unclassified Information (CUI) Program, dated December 3, 2021 (ML21223A168).

15.

U.S. Nuclear Regulatory Commission, Management Directive 12.7, NRC Safeguards Information Security Program (non-public).

16.

U.S. Nuclear Regulatory Commission, NUREG-0800, Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants: LWR [Light-Water Reactor Edition (SRP).

17.

U.S. Nuclear Regulatory Commission, NRR Office Instruction ADM-504, Qualification Program, Revision 4, dated April 10, 2023 (non-public).

18.

U.S. Nuclear Regulatory Commission, NRR Office Instruction COM-204, Revision 5, Informal Interfacing with and Handling Documents from Owners Groups, Vendors, Nuclear Energy Institute, Licensees, and Other External Stakeholders, dated September 7, 2020 (ML20027A598, non-public).

19.

U.S. Nuclear Regulatory Commission, NRR Office Instruction LIC-101, Revision 6, License Amendment Review Procedures, dated July 31, 2020 (ML19248C539).

20.

U.S. Nuclear Regulatory Commission, NRR Office Instruction LIC-105, Revision 7, Managing Regulatory Commitments Made by Licensees to the NRC, dated August 22, 2016 (ML16190A013).

21.

U.S. Nuclear Regulatory Commission, NRR Office Instruction LIC-201, Revision 3, NRR Support to the Hearing Process, dated March 31, 2008 (ML080730530, non-public).

22.

U.S. Nuclear Regulatory Commission, Inspection Manual Chapter 0301, Coordination of NRC Visits to Commercial Reactor Sites, dated August 24, 2001 (ML012530183).

NRR Office Instruction LIC-111, Revision 2 Page 18 of 18

23.

U.S. Nuclear Regulatory Commission, Inspection Manual Chapter 0620, Inspection Documents and Records, dated July 9, 2021 (ML21089A217).

24.

U.S. Nuclear Regulatory Commission. Inspection Manual Chapter 1245,

[Inspector] Qualification Program for Reactor Inspectors, dated May 30, 2024 (ML24019A160).

Enclosure:

Appendix A - Change History

Enclosure Appendix A - Change History Office Instruction LIC-111 Regulatory Audits LIC-111 Change History - Page 1 of 1 Date Description of Changes Method Used to Announce &

Distribute Training 12/16/2008 Initial issuance as ML082900195 E-mail to NRR staff Offered presentation to all branches and divisions 10/31/2019 Revision 1 (ML19226A274) was updated to capture NRR and NRO best practices for regulatory audits.

The objective of this instruction is to provide guidance to staff who conduct regulatory audits. This issuance incorporates and rescinds the related NRO instruction NRO-REG-108, Regulatory Audits.

E-mail to NRR staff None 12/19/2024 Revision 2 (ML24309A281) was done as a periodic update to capture the NRR best practices for regulatory audits. The objective of this instruction is to provide guidance to staff who conduct regulatory audits.

E-mail to NRR staff None