ML20128D104
| ML20128D104 | |
| Person / Time | |
|---|---|
| Issue date: | 09/30/1992 |
| From: | The Chairman NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML20128D107 | List: |
| References | |
| NUDOCS 9212070147 | |
| Download: ML20128D104 (12) | |
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U.S. Nuclear Regulatory Commission Chairman's Semiannual Report to the Congress April 1,1992 - September 30,1992 N ANAGEMENT DECISIONS AND FINAL ACTIONS ON OFFICE OF THE INSPECTOR GENERAL AUDIT RECOMMENDATIONS
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Chairman's Semiannual Report to the Congress
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MANAGEMENT DECISIONS AND FINAL ACTIONS ON 3 OFFICE OF THE INSPECTOR GENERAL AUDIT RECOMMENDATIONS April 1,1992 - September 30,1992 j#" "' 6%,
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U.S. Nuclear Regulatory Commission Washington, DC 20555 9
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FOREWORD We are forwarding the U.S. Nuclear Regulatory Commission's semlannual report,
" Management Decisions and Final Actions on Office of the Inspector General [OlG)
Audit Recommendations " The report cove 9 the six months from April 1 to September 30,1992, and is required by Section 106(b) of the Inspector General Act Amendments (P.L.100-504). It complements the report prepared by the OlG on audit i. ports is-sued during the same six months and provides information on actions taken in re-sponse to audit reports.
This reporting period is considered significant because of the type of reviews con-ducted by the OlG, the magnitude of the findings, and the positive manner in which management has responded to these reports. Four of the audits conducted focused on the financial practices of the agency. As we continue to place emphasis on compil-ance with the Chief Financial Officers Act, these audits will assist us in identifying and correcting potential weaknesses in our financial programs. The identification of over
$10 million worth of recommendations where furids can be put to better use is sub-stantial, and policies and practices requiring further emphasis have been ident~fied.
Management has aggressively responded to these recommendations, putting some corrective action plans into effect even before the final OlG reports were issued. There has been a heightened awareness of financial management practices throughout the agency.
We continue to maintain a cooperative atmosphere in working with the OlG and appre-ciate its assistance in maintaining the highest possible standards for this agency.
Ivan Selin, Chairman U.S. Nuclear Regulatory Commission I
CONTENTS Pago F O R EWO R D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... i I NTR O D U CTI O N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 B AC KG R O U N D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATUS ON RECOMMENDATIONS REMAINING FROM TH E P R EVI O U S P E R I O D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 MANAGEMENT DECISIONS ON REPORTS ISSUED DURING TH I S P E R I O D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 STATISTICAL TABLE REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 STATISTICAL TABLE I Disallowed Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 STATISTICAL TABLE ll Funds To Be Put To Better Use . . . . . . . . . . . . . . . . . . . . . . . 6 MANAGEMENT DECISIONS NOT IMPLEMENTED WITHIN O N E Y EA R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ill
INTRODUCTION This is the seventh semiannual report to the Congress on management and final actions taken by the U.S. Nuclear Regulatory Commission in response to the recommendation:) of OlG audits. This report provides the status on open recommendations existing before the reporting period, recommendations made during the reporting period and recommenda-tions remaining open for more than a year. Management's disagreement with one audit recommendation has been referred to the agency audit followup official for resolution. This unresolved recommendation is discussed further in the section titled " Management Deci-slons issued During This Period."
BACKGROUND Public Law 100-504, the Inspector General Act Amendments of 1988, placed new report-ing requirements on both Inspector Generals and agency heads to report to the Congress on audits and audit results. Section 106(b) of this law requires that agenc'/ heads submit semlannual reports to the Congress regarding management decisions and final actions taken pursuant to audit recommendations.
STATUS ON RECOMMENDATIONS REMAINING FROM THE PREVIOUS PERIOD Substantial progress has been made on closing open recommendations during the report-Ing period. Final action was completed for seven recommendations and four audit reports ,
were closed out. These four are discussed briefly below. Five audit reports that contain a 3 total of nine recommendations have remained open for more than a year. The status of the implementation of these recommendations is discussed in the section titled " Management Decisions Not implemented Within One Year" of this report.
REVIEW OF NRC'S INVOICE PAYMENT PRACTICES The O'G recommended that the Controller develop and utilize a fully automated payment system. Final action on this recommendation has been completed with the implementa-tion of the Federal Financial System (FFS) through a cross servicing arrangement with the U.S. Department of the Treasury beginning in Fiscal Year 1993. FFS includes an auto-mated payment system that will track invoices from receipt to payment, calculate due dates, and compute discounts and interest penalties in accordance witn the Prompt Pay-(- ment Act, as amended, k
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4 REVIEW OF NRC'S IMPLEMENTATION OF THE FEDERAL MANAGERS FINANCIAL INTEGRITY ACT (FMFIA) 1989 AND REVIEW OF HRC'S IMPLEMENTATION OF THE FEDERAL MANAGERS FINANCIAL!NTEGRITY ACT (FMFIA)1990 AND PART 170 LICENSE FEE PROCESSING The above three audit reports had outstanding recommendations that focused on the 11-conse fee billing process. A 1987 internal controi review and subsequent OlG audit reports identified weaknesses in N RC's license fee billing process. These reviews showed that cor-rective action was needed in three major areas-timeliness of billing, validity of data, and automation of the predominately manuallicense fee billing system.
Corrective action has been completed that substantially resolves the weaknesses identi-fled. First, the NRC amended its fee regulations 10 CFR 170.12 to reduce the billing interval for reactor and certain materials licensing actions. With this change, allfull cost license and inspectionfees are now being billed atleast quarterlyinstead of semlannually. Additionally, the time required for staff actions to complete the license fee cycle has been reduced, thus accelerating the billing process. Second, additional supervisory review and quality assur-ance checks have been instituted that willimprove the accuracy of the data that serve as the basis for the fee billing.
Last, NRC'S license fee billing system supports and automates the fee billing process through accumulation of hours and charges, invoice calculation and preparation, collec-tion and overdue processing, and interface with agency financial management software.
Each component has been in use through at least one annual cycle, it supports the billing of Part 170 fees at least quarterly and reduces or eliminates the manual handling or rekey-Ing of data from the billing systems to the accounts receivable system. The Office of Infor-mation Resources Management has a continuing commitment to keep the license fee bill-ing system current and to enhance it to further streamline the billing process.
These actions implement and close the OlG recommendations relating to the estimated $2 million in avoidable interest costs that would result from more timely billing and collection of fees.
MANAGEMENT DECISIONS ON REPORTS ISSUED DURING THIS PERIOD NRC management reached resolution on all but one of the recornmendations made by the OlG during this reporting period. The unresolved recommendation involves the timing of recording expenses in the accounting system. Of the seven audit reports issued by the OlG, five contained no recommendations. The other two reports contained a total of six
( recommendations and are discussed below. One of the six recommendations has already been implemented, and the other five are in various stages of being implemented.
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IMPROVEMENTS NEEDED IN NRC'S PROCESS FOR APPROVING PAYMENTS TO THE DEPARTMENT OF ENERGY (DOE)
Dunng this audit, the OlG staff reviewed the project management practices in the Office of Nuclear Regulatory Research (REJJ related to the acquisition of goods and services at E DOE nationallaboratories. The report contained three recommendations, which centered or,the review and approval of cost vouchers and subsequent verification of RES work per-formed. On the basis of the audit findings,it was estimated that approximately $500 million of DOE vouchers might not have been revie .ed and approved. RES quickly established E
an a0gressive plan to review and approve vouchers. Since inception of this plan in May 1992, over $203 million of RES DOE vouchers have been reviewed and approved. Of the amount reviewed, less than one tenth of one percent were determined to be incorrectly billed or intormation was insufficient to confirm payment. Although the risk of a significant overbilling or underbilling appears to be extremely low, the internal controls associated with the review and approval of DOE vouchers were inadequate and were reported as an agency material weakness.
The audit report also addressed the need for an internal quality control process to ensure that DOE vouchers are reviewed and approved in accordance with agency policy and pro-cedures. RES implemented a quality control process and the Controller implemented a fol:0wup procedure to ensure that approved vouchers are on file to support DOE pay-ments. The NRC disagreed with a recommendation in this audit report concerning the tim-ing of recording expenses in NRC's accounting system and has requested a decision from the Comptroller General to resolve this issue.
While reviewing the DOE laboratory agreement process, the OlG determined that $1.4 mil-lion of completed but not closed laboratory agreements existed. RES is closing out these laboratory agreements, and the agency will be putting the funds to better use.
REVIEW OF NRC'S CONTRACT CLOSEOUT PROCESS During the first half of fiscal year 1992, the OlG conducted an audit of the process used by the Division of Contracts and Property Management (DCPM) to close out commercial con-tracts. The audit showed that on the basis of a sampling of 55 contracts, approximately
$8.1 million was available for deobligation from 800 expired contracts. The OlG, therefore recommended that the agency (1) develop a plan to reduce the backlog and increase the use of incentives for follow-on contracts; (2) review the validity of the 5 percent reserve and revise the amount held in reserve, as appropriate; (3) deobligate available balances on the 800 expked contracts. DCPM has completed actions on item 2 above. With respect to items 1 and 3, DCPM has closed 169 contracts and deobligated $3,225,730 since April 1, 1992. By January 29,1993, it plans to deobligate available balances on all expired con-tracts within 90 days after a contract becomee eligible for closecut. A backlog of no more than 300 contracts will t'e maintained after July 1994.
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STATISTICAL TABLE REVIEW The following tables reflect dollar values of recommendations contained in reports issued by the OlG. Table I presents the dollar value of disallowed costs determined through con-tract audits conducted by the Defense Contract Audit Agency (DCAA). These costs are also contained in reports subsequently issued by the OlG. Table ll presents the dol!ar value of recommendations for funds to be put to better use. These figures result from pre award contract audits conducted by DCAA and the OlG, as well as internal program audits per-formed by the OlG. The OlG was responsible for conducting the audits in Table ll, other than two contract audits that account for $72,020 in Category A of the table, threo contract audits and $117,611 in Categories B and C, and four contract audits and $62,840 in Cate-gory D. These contract audits were conducted by DCAA. It should be noted that the De-partment of Defense also takes credit for cost savings resulting from all DCAA audits in its semlannual report.
The OlG conducted an audit of the Center for Nuclear Waste Flegulatory Analysis cost pro-posal for the first five year renewal period. Potential savings of $3,494,758 were identified.-
Most of this amount ($3.4 ml:ilon) resulted from the OlG's recommendation to reduce the contractor's proposed overhead rate. The contractor subsequently submitted a revised proposal. When OlG's recommended rates were applied to the second proposal, the ac-tual amount of funds to be put to better use was recalculated at $1,067,254. This amount is included as one of the audits in Statistical Table 11, Category B.
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STATISTICAL TABLE I MANAGEMENT REPORT ON OFFICE OF INSPECTOR GENERAL AUDITS WITH DISALLOWED COSTS For th? Period April 1,1992 through September 30,1992 Number of Disallowed 1 Audit Reports Costs A. Audit reports with management l decisions on which final action had not been taken at the beginning of this ieporting period 7 $110,349*
B. Audit rcports on which management decisions were made during this reporting period l ,
. 2 762 C. Audit reports on which final action was taken during this reporting l period 9 111,111 (i) disallowed costs that were re-1 covered by management through collection, offset, property in lieu of cash, or otherwise 9 111,111 (ii) disallowed costs that were written off by management 0 0 l D. Reports on which no final action had g been taken by the end of the reporting g period 0 0 l
- This figt Te does not include an audit report for $272,415 in disallowed costs that was included in Category D in the last reporting period.
This report was superseded by a supplementary audit repo16ssued May 20,1992 for which a management decision is pending.
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STATISTICAL TABLE ll MANAGEMENT REPORT ON OFFICE OF INSPECTOR GENERAL AUDITS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE For the Period April 1,1992 through September 30,1992 Recommendations that funds be put to better use by manage-Number of ment agreed to in a Audit Reports management decision A. Audit reports on which final action has not been taken by the commencement of this reporting period 3 S 2,072,020 B. Audit reports on which manage-ment decisions were made during this reporting period 7 10,880,146 C. Audit reports on which final action was taken during this reporting period 6 3,380,146 (i) recommendations that were actually completed 6 3,380,146 (ii) recommendations that man-agement has subsequently concluded should not or could not be implemented or completed 0 0 D. Audit reports on which no final i action has been taken by the end of this reporting period 6 9,562,840 k 6
MANAGEMENT DECISIONS NOT WPLEMENTED WITHIN ONE YEAR Management decisions were mcde before September 1991 for the following five OlG audit i reports, but as of September 30,1992, final actions had not been taken. The title of each report is given below with the date it was issued and a description of related activities.
These reports do not contain any disallowed costs or recommendations that funds be put to better use.
USE OF LONG DISTANCE TELEPHONE 11/17/88 When the Office of the inspector and Auditor (preceded current OlG) issued this audit re-port, a telecommunications feature called automatic number identification (ANI) was avail-able from th provider of telephone services to the NRC. ANI provided complete informa-tion about long distance telephone calls, including the originating and terminating
, telephone numbers and the cost for the call. The report recomrnended that the urauthor-ized use of long distance telephone calls be determined and that the costs be recouped where it was cost effective to do so. After the report was issued, in the fall of 1989, the NRC
, was required to convert to the new Federal Telecommunications System, the FTS-2000.
The ANI feature was not available on the FTS-2000 network. From the implementation of 4
the FTS-2000 service in 1989 until June 1992, the NRC was unable to validate the large number of calls placed on FTS-2000, in June 1992, the General Services Administration started to provide ANI data for the agen-cy's headquarters sites to the NRC. The NRC began developing a computer program that would analyze the ANI data and select calls for validation. A prototype of this software was tested and modifications to the software requirements were identified. As a result, the soft-ware is being revised and the NRC continues to finalize procedures for validating and billing unauthorized calls. After experience is gained with the new system, an analysis will be per-formed to determine if its continued use will be cost beneficial. The NRC is scheduled to i
propose a recommendation by the end of January 1993.
REVIEW OF NRC MANAGEMENT OF REPORTING REQUIREMENTS UNDER 10 CFR PART 21 11/30/90 This OlG report contained five recommendations concerning NRC's management of re-porting requirements under 10 CFR Part 21. Final action has been taken on all but one of these recommendations. The outstanding item requires clarification of 10 CFR Part 21 compliance by materials licensees and vendors. To address this issue, management is developing a proposed rule to clarify that Part 21 requkements apply to all materials licen-sees. Under the proposed rule, major materials licensees (fuel cycle, waste disposal, large irradiator, medical therapy device, radiography, and spent fuel storage) will have to comply with all the current requirements of 10 CFR Part 21, including the development and imple-mentation of specific procedures for evaluating equipment defects. The proposed amend-ments would clarify the evaluation and reporting requirements and make them less bur-densome for many materials licensees. During the current reporting period, the language of the proposed rule has undergone extensive internal coordination and management re-view. Several revisions to the rule have been made and supporting supplementalinforma-tion sections have been added to make the requirements more clear. The proposed rule 7
t was discussed with the Agreement States on October 28,1992. Their comments will be taken into consideration when it is submitted to management in December.
REVIEW OF NRC'S NUCLEAR DOCUMENTS SYSTEM 1/16/91 This OlG report contained five recommeridations concerning improvements to NUDOCS.
NUDOCS is NRC's Nuclear Documents System and is the agency's centrahed stcrage and retrieval system for selected documents submitted to, or generated by, the NRC. One p 2
of two remaining recommendations was closed during the reporting period. A prototype design for a centralized microcomputer-based system with a NUDOCS interf ace was com-pleted in June 1992 ard a comprehensive finai report on the prototype system was issued in August 1992. The remaining open recommendation requires an update of an internal management directive describing policies in working with NUDOCS. Several policy issues involving public dissemination of NUDOCS information are being resolved, and a compre-hensive directive is anticipated for publication in November 1992.
REVIEW OF NRC'S EMERGENCY PLANNING REGULATIONS AND IMPLEMENTING GUIDANCE 1/16/91 This OlG report contained eight recommendations, five of which have been closed. The three recommendations remaining open entail changes to the 1985 Federal Emergency Management Agency (FEMA)-NRC memorandum of understanding (MOU) on radiologi-cal emergency planning and preparedness. The NRC met with FEMA in April 1992 to jointly draft the changes to the MOU. lne signing of a revised MOU was delayed pending further consideration of the role of exercises, it is anticipated the revised MOU will be submitted for Commission approval in early 1993. Once it is signe-i by both agencies, it will be published in the Federal Register.
REVIEW OF THE PROCUREMENT PRACTICES OF THE ADVISORY COMMITTEE ON REACTOR SAFEGUARDS (ACRS) 9/17/91 The OlG reviewed the procurement practices of the ACRS in dealing with the DOE laborato-ries. Two of four recommendations remain open. The open recommendations require oversight by DCPM for goods and services procured from the DOE laboratories and rec-ommend legal evaluation of NRC policies concerning ACRS members employed by DOE laboratories. DCPM developed a comprehensive management directive that outlines spe-cific DCPM responsibilities in the management of DOE laboratory projects and agency policies and procedures in placing work with the DOE laboratories. Because substantial coordination between NRC staff offices is necessary to implement these changes, it is an-ticipated that the directive will not be published until the end of January 1993. A letter was written to the Comptroller General requesting clarification of the Commission's arrange-ments for obtaining an individual's services from the laboratories. We are awaiting a re-
{ sponse from the Comptroller General.
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