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Fiscal Year 2023 Agency Financial Report UNITED STATES NUCLEAR REGULATORY COMMISSION
AVAILABILITY OF REFERENCE MATERIALS IN NRC PUBLICATIONS NRC Reference Material Non-NRC Reference Material As of November 1999, you may electronically access Documents available from public and special technical NUREG-series publications and other NRC records at the libraries include all open literature items, such as books, NRCs Library at www.nrc.gov/reading-rm.html. Publicly journal articles, transactions, Federal Register notices, released records include, to name a few, NUREG-series Federal and State legislation, and congressional reports.
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information notices; inspection and investigative reports; licensee event reports; and Commission papers and their Copies of industry codes and standards used in a attachments. substantive manner in the NRC regulatory process are maintained at NRC publications in the NUREG series, NRC regulations, The NRC Technical Library and Title 10, Energy, in the Code of Federal Regulations Two White Flint North may also be purchased from one of these two sources.
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- 1. The Superintendent of Documents U.S. Government Publishing Office These standards are available in the library for reference Washington, DC 20402-0001 use by the public. Codes and standards are usually Internet: https://bookstore.gpo.gov/
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Address: U.S. Nuclear Regulatory Commission Office of Administration The NUREG series comprises (1) technical and administrative Digital Communication and Administrative reports and books prepared by the staff (NUREG-XXXX) or Services Branch agency contractors (NUREG/CR-XXXX),
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and (5) compilations of legal decisions and orders of the Commission and Atomic and Safety Licensing Boards and Some publications in the NUREG series that are posted at the NRCs Web site address www.nrc.gov/reading-rm/ of Directors decisions under Section 2. 206 of the NRCs doc-collections/nuregs are updated periodically and may regulations (NUREG-0750) (6) Knowledge Management differ from the last printed version. Although references to prepared by NRC staff or agency contractors (NUREG/KM-material found on a Web site bear the date the material XXXX)..
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Neither the U.S. Government nor any agency thereof, nor any employee, makes any warranty, expressed or implied, or assumes any legal liability or responsibility for any third partys use, or the results of such use, of any information, apparatus, product, or process disclosed in this publication, or represents that its use by such third party would not infringe privately owned rights.
About This Report The Agency Financial Report (AFR) for the U.S. Nuclear Regulatory Commission (NRC) provides financial and summary performance information in accordance with Office of Management and Budget Circular A-136, Financial Reporting Requirements. This AFR is an account of the agencys stewardship of its resources during fiscal year (FY) 2023, which covers the period from October 1, 2022, to September 30, 2023. The report is organized into the following three chapters:
- Chapter 1: Managements Discussion and Analysis This chapter provides an overview of the NRC financial information and summary-level program performance information. It includes an overview of program performance, current status of systems, internal controls, financial management, and the FY 2023 financial statement analysis.
- Chapter 2: Financial Statements and Auditors Report This chapter contains details on the NRCs finances for FY 2023. It includes a message from the Chief Financial Officer, the financial statements, and accompanying notes, required supplementary information, and the independent auditors report.
- Chapter 3: Other Information This chapter provides the Office of the Inspector Generals discussion of management and performance challenges, a summary of the financial statement audit, information on payment integrity and fraud, details on space occupancy, a glossary of acronyms, and other information.
NRC Reports on the Agency Web Site:
- The Annual Performance Plan is reflected in the NRCs FY 2024 Congressional Budget Justification and is posted on the NRCs Web site at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1100/.
- Since FY 2017, AFRs are located at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr2220/
- Before publication of the AFR, the NRC prepared Performance and Accountability Reports, which are located at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1542/.
Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid Office of Management and Budget control number.
The document NUREG-2220, Volume 7, has been reproduced from the best available copy.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment iii
Table of Contents The Commission ........................................................................................................................... vi A Message from the Chair ......................................................................................................... vii Chapter 1: Managements Discussion and Analysis ........................................................... 1 Mission - Vision - Principles of Good Regulation.....2 About the NRC .......................................................................................................................................... 3 The NRCs Organizational Structure...................................................................................................... 4 The NRCs Regulatory Activities...5 The Nuclear Industry..6 Future Challenges10 Program Performance Overview.12 Source of Funds. ......................................................................................................................................21 Analysis of the Financial Statements .................................................................................................... .22 Analysis of Systems, Controls, and Legal Compliance....27 Chapter 2: Financial Statements and Auditors Report .................................................... .35 A Message from the Chief Financial Officer..36 Financial Statements............................................................................................................................... .37 Notes to the Financial Statements .........................................................................................................41 Required Supplementary Information ....................................................................................................62 Inspector Generals Letter Transmitting Independent Auditors Report ............................................67 Independent Auditors Report ................................................................................................................ .69 Managements Response to the Independent Auditors Report.75 Chapter 3: Other Information ................................................................................................... .77 Inspector Generals Assessment of the Most Serious Management and Performance Challenges Facing the NRC. .78 Summary of Financial Statement Audit and Management Assurances........................................ .105 Payment Integrity .................................................................................................................................. 107 Real Property ....................................................................................................................................... .108 Civil Monetary Penalty Adjustment for Inflation ................................................................................ .109 Grants Oversight and New Efficiency Act Requirements ................................................................ .110 Climate-Related Financial Risk ...........110 Acronyms and Abbreviations.112 FY 2022 Agency Financial Report https://www.nrc.gov Protecting People and the Environment FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment v
v
The authority of the U.S. Nuclear Regulatory Commission is vested in a Commission of five members, with one member designated by the President of the United States to serve as Chair.
With the advice and consent of the Senate, the President appoints each member to serve a 5-year term. The Chair is the chief executive officer and official spokesperson for the Commission.
The Commission as a whole formulates policies and regulations governing the safety and security of nuclear reactors and materials, issues orders to licensees, and adjudicates legal matters brought before it. The Executive Director for Operations carries out program policies and decisions made by the Commission. At the end of FY 2023, one-of-the-five Commissioner positions was vacant.
Chair Christopher T. Hanson Commissioner David A. Wright Commissioner Annie Caputo Commissioner Bradley Crowell FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment vi
A Message from the Chair FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment vii
Chapter 1: Managements Discussion and Analysis Chapter 1 Managements Discussion and Analysis Mission The U.S. Nuclear Regulatory Commission (NRC) licenses and regulates the Nations civilian use of radioactive materials to provide reasonable assurance of adequate protection of public health and safety, and to promote the common defense and security, and to protect the environment.
Vision Demonstrate the Principles of Good Regulation in performing the agencys mission.
To be successful, the NRC must not only excel in carrying out its mission but must do so in a manner that engenders the trust of the public and stakeholders. The Principles of Good Regulation independence, openness, efficiency, clarity, and reliabilityguide the agency. They affect how the NRC reaches decisions on safety, security, and the environment; how the NRC performs administrative tasks; and how its employees interact with each other as well as with external stakeholders. By adhering to these principles, the NRC maintains its regulatory competence, conveys that competence to stakeholders, and promotes trust in the agency. The agency puts these principles into practice with effective, realistic, and timely actions.
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Chapter 1 Managements Discussion and Analysis About the NRC The U.S. Congress established the NRC on January 19, 1975, as an independent Federal agency regulating the commercial and institutional uses of nuclear materials. The Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, as amended, define the NRCs purpose. These acts provide the foundation for the NRCs mission to regulate the Nations civilian use of byproduct, source, and special nuclear materials to provide adequate protection of public health and safety, to promote the common defense and security, and to protect the environment.
The agency regulates civilian nuclear power plants and other nuclear facilities, as well as other uses of nuclear materials. These other uses include nuclear medicine programs at hospitals; academic activities at educational institutions; research work; industrial applications, such as gauges and testing equipment; and the transport, storage, and disposal of nuclear materials and wastes. Additional information about the NRC is available in the Information Digest at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1350/.
NRC Headquarters is located in Rockville, MD. The agency Operations Center in the headquarters building coordinates communications with NRC licensees, State agencies, and other Federal agencies. This center is the focal point for assessing and responding to operating events in the industry. NRC operations officers staff the Operations Center 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day, 7 days a week. The agency also has four regional offices located in King of Prussia, PA; Atlanta, GA; Lisle, IL; and Arlington, TX. The regional offices allow the agency to work closely with the agencys licensees to ensure safety. The NRC also employs at least two resident inspectors at each of the Nations nuclear power reactor, new reactor, and fuel fabrication sites.
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Chapter 1 Managements Discussion and Analysis The NRCs Organizational Structure FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 4
Chapter 1 Managements Discussion and Analysis The NRCs Regulatory Activities The NRC performs five principal regulatory functions: developing regulations and guidance for applicants and licensees; licensing or certifying applicants to use nuclear materials, operate nuclear facilities, construct new nuclear facilities, and decommission facilities; inspecting and assessing licensee operations and facilities to verify that licensees are complying with NRC requirements and taking appropriate follow-up or enforcement actions when necessary; evaluating operational experience of license facilities and activities; and conducting research, holding hearings, and obtaining independent reviews to support regulatory decisions (see Figure 1).
The standards and regulations established by the agency set the rules that users of radioactive materials must follow. Drawing on the knowledge and experience of the agencys scientists and engineers, these rules are the basis for protecting workers and the general public from the potential hazards associated with the use of radioactive materials.
With a few exceptions, any organization or individual intending to have or use radioactive materials must obtain a license. A license identifies the type and amount of radioactive material that may be held and used. NRC scientists and engineers Figure 1 How the NRC Regulates evaluate the license application to ensure that the potential licensees use of nuclear materials meets the agencys safety and security requirements.
The NRC regulates 92 commercial nuclear power reactors operating in 28 states at 54 sites; 31 research and test reactors as part of nonpower production and utilization facilities; 25 nuclear reactors in various stages of decommissioning; 84 independent spent fuel storage installations; 9 licensed active fuel cycle facilities; 3 uranium recovery sites; and more than 2,100 licenses for medical, academic, industrial, and general uses of nuclear materials. The agency conducts approximately 600 to 800 safety and security inspections of its nuclear materials licensees annually.
Under the NRCs Agreement State program, 39 states have assumed primary regulatory responsibility for the industrial, medical, and other users of nuclear materials within their states, accounting for nearly 16,000 licenses. The NRC works closely with these states to assist them in maintaining public safety through acceptable licensing and inspection procedures.
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Chapter 1 Managements Discussion and Analysis The Nuclear Industry The civilian nuclear industry can best be described by examining the nuclear fuel cycle (see Figure 2). The nuclear material cycle begins with the mining and production of nuclear fuel or the use of nuclear materials for medical, industrial, and other applications, continues with the use of nuclear fuel to power the Nations nuclear power plants, and ends with the safe transportation and storage of spent nuclear fuel and other nuclear waste. The NRCs regulatory programs provide reasonable assurance that radioactive materials are used safely and securely at every stage in the nuclear material cycle. To address safety and security issues, the NRC has developed regulatory practices, knowledge, and expertise specific to each activity in the nuclear fuel cycle beginning with the processing of uranium ore.
Fuel Cycle Facilities The production of nuclear fuel begins at uranium mines where milled uranium ore is used to produce a uranium concentrate called yellowcake. At a special facility, the yellowcake is converted into uranium hexafluoride (UF6) gas and loaded into cylinders. The cylinders are sent to a uranium enrichment facility, where the concentration of the isotope uranium-235 is increased for use as reactor fuel. The enriched uranium is then converted into oxide powder, fabricated into fuel pellets (each about the size of a fingertip), loaded into metal fuel rods about 14 feet (4.3 meters) long Figure 2 The Nuclear Fuel Cycle and bundled into the reactor fuel fabrication assemblies. The assemblies are then transported to nuclear power plants, non-power research reactor facilities, and naval propulsion reactors for use as fuel (see Figure 3). The NRC licenses all commercial uranium conversion, enrichment, and fuel fabrication facilities in the United States. Because they handle extremely hazardous material, these facilities take special precautions to prevent theft, diversion, and dangerous exposures.
Figure 3 Simplified Fuel Fabrication Process FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 6
Chapter 1 Managements Discussion and Analysis Reactors Nuclear power reactors licensed by the NRC generate approximately 19 percent of the U.S. gross electricity needs, or about 778 billion kilowatt hours annually. To generate electricity, power plants change one form of energy into another. Electrical generating plants convert heat energy, the kinetic energy of wind or falling water, or solar energy into electricity. Other types of heat-conversion plants burn coal, oil, or gas to produce heat energy that is then used to produce electricity. Nuclear energy cannot be seen. Heat energy is not produced by the burning of fuel in the usual sense. Rather, energy is given off by the nuclear fuel as certain types of atoms split in a process called nuclear fission. This energy is in the form of fast-moving particles and radiation.
As the particles and radiation move through the fuel and surrounding water, the energy is converted into heat, which generates electricity. The radiation energy can be hazardous, and facilities take special precautions at nuclear power plants to protect people and the environment from these hazards (see Figures 4 and 5).
Because the fission reaction produces potentially hazardous radioactive materials, nuclear power plants are equipped with safety systems to protect workers, the public, and the environment.
Radioactive materials require careful use because they produce radiation, a form of energy that can damage human cells. Depending on the amount and duration of the exposure, radiation can potentially cause cancer. In a nuclear reactor, most hazardous radioactive substances, called fission byproducts, are trapped in the fuel pellets or in the sealed metal tubes holding the fuel.
However, small amounts of these radioactive fission byproducts, principally gases, become mixed with the water passing through the reactor. Other impurities in the water also become radioactive as they pass through the reactor. The facility processes and filters the water to remove these radioactive impurities and then returns the water to the reactor cooling system.
Figure 4 The Boiling-Water Reactor Figure 5 The Pressurized-Water Reactor FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 7
Chapter 1 Managements Discussion and Analysis Materials Users The medical, academic, and industrial fields all use nuclear materials. For example, about one-third of all patients admitted to U.S. hospitals are diagnosed or treated using radioisotopes.
Most major hospitals have specific departments dedicated to nuclear medicine. Of the nuclear medicine or radiation therapy procedures performed annually, the vast majority are used in diagnoses. Radioactive materials used as a diagnostic tool can identify the status of a disease and minimize the need for surgery. Radioisotopes give doctors the ability to look inside the body and observe soft tissues and organs, in a manner similar to the way x-rays provide images of bones. Radioisotopes carried in the blood also allow doctors to detect clogged arteries or check the functioning of the circulatory system.
The same property that makes radiation hazardous can also make it useful in treating certain diseases like cancer. When living tissue is exposed to high levels of radiation, cells can be destroyed or damaged. Doctors can selectively expose cancerous cells (cells that are dividing uncontrollably) to radiation to either destroy or damage these cells.
Many of todays industrial processes also use nuclear materials. Technologically advanced methods that ensure the quality of manufactured products often rely on radiation generated by radioisotopes. To determine whether a well drilled deep into the ground has the potential for producing oil, geologists use nuclear well-logging, a technique that employs radiation from a radioisotope inside the well, to detect the presence of different materials. Radioisotopes are also used to sterilize instruments, find flaws in critical steel parts and welds that go into automobiles and modern buildings, authenticate valuable works of art, and solve crimes by spotting trace elements of poison. Radioisotopes can also eliminate dust from film and compact discs and reduce static electricity (which may create a fire hazard) from can labels. In manufacturing, radiation can change the characteristics of materials, often giving them features that are highly desirable. For example, wood and plastic composites treated with gamma radiation resist abrasion and require low maintenance. As a result, they are used for some flooring in high-traffic areas of department stores, airports, hotels, and churches.
Waste Disposal During normal operations, a nuclear power plant generates both high level radioactive waste, which consists of used fuel (usually called spent fuel), and low-level radioactive waste, which includes contaminated equipment, filters, maintenance materials, and resins used in purifying water for the reactor cooling system. Other users of radioactive materials also generate low level waste.
Nuclear power plants handle each type of radioactive waste differently. They must use special procedures in the handling of the spent fuel because it contains the highly radioactive fission byproducts created while the reactor was operating. The spent fuel from nuclear power plants can be stored in water-filled pools at each reactor site. The water in the spent fuel storage pool provides cooling and adequately shields and protects workers from the radiation. Nuclear power plants also use dry casks to store spent fuel. These large metal or concrete casks rest on concrete pads adjacent to the reactor facility. The thick layers of concrete and steel in these casks shield workers and the public from radiation.
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Chapter 1 Managements Discussion and Analysis Currently, most spent fuel in the United States remains stored at individual plants. Permanent disposal of spent fuel from nuclear power plants will require a disposal facility that can provide reasonable assurance that the waste will remain isolated for thousands of years.
Licensees often store low-level waste on site until its radioactivity has decayed and the waste can be disposed of as ordinary trash, or until amounts are large enough for shipment to a low-level waste disposal site in containers approved by the U. S. Department of Transportation.
The NRC has developed a waste classification system for low-level radioactive waste based on its potential hazards and has specified disposal and waste form requirements for Class A, Class B, and Class C waste. Generally, Class A waste contains lower concentrations of radioactive material than Class B and Class C wastes. The three disposal facilities that accept a broad range of low-level wastes are located in Barnwell, SC, Richland, WA, and Andrews, TX.
Spent Fuel Dry Cask Storage FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 9
Chapter 1 Managements Discussion and Analysis Future Challenges Many challenges and external factors influence the NRCs ability to achieve its strategic goals and associated objectives. The most significant challenges include industry operating experience, national priorities, a potential significant incident at a domestic or non-U.S. nuclear facility, the security and threat environment, legislation, Federal court litigation, market forces, new technologies, and resource availability. The NRC strives to respond promptly to shifts in agency priorities necessitated by these challenges. The nuclear industry has maintained an excellent safety record at nuclear power plants over decades as both the nuclear industry and the NRC have gained substantial experience in the operation and maintenance of nuclear power facilities. Maintaining this excellent safety record requires that the agency take proactive measures to ensure the accomplishment of its mission. The sections below highlight the key challenges the agency faces.
Market Forces Many market forces affect the nuclear industry. These can affect the business operations of facility operators and license applicants subject to NRC jurisdiction and therefore the workload before the agency. The NRC must be prepared with the regulatory infrastructure to continue to provide reasonable assurance of the safety and security of operating facilities, support areas such as decommissioning of nuclear power plants, changes in exports and imports, and licensing of new technologies and facilities.
Globalization and Development of Nuclear Technology Technological changes may affect the development of advanced nuclear systems and support infrastructure, resulting in impacts to the industry activities subject to NRC jurisdiction. Increased globalization of nuclear technology, including small modular reactors and advanced reactor designs, could increase competition in the nuclear supply chain and, therefore, could affect industry operating costs and increase the complexity of regulatory oversight due to the need to encompass foreign vendors. In addition to operating and regulatory impacts on the domestic nuclear industry, globalization increases the value of the NRCs enhanced cooperation with international organizations for licensing activities, training, development and implementation of codes and standards, and conventions and treaties to ensure safe and secure use of nuclear technology.
Incidents The U.S. national security landscape will continue to be dynamic, encompassing a full range of threats and incidents, including the identification of and protection against, cyber and physical security threats. As a result, the regulatory approach needed to ensure the safety and security of nuclear materials and infrastructure may need to evolve in response to such incidents and threats. A significant incident at a nuclear facility, whether caused by adversaries, natural disaster, or other factors, could prompt the agency to reassess its safety and security requirements and could impact the agencys focus. The NRC must anticipate and be prepared for an operational and regulatory response to threats and incidents involving nuclear infrastructure. An incident at a non-U.S. facility could also cause the NRC to reassess its safety and security requirements.
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Chapter 1 Managements Discussion and Analysis Legislative and Executive Branch Actions Congressional or Executive Branch actions may affect the NRCs regulatory responsibilities, and strategies to comply with new direction would need to be developed.
International Treaties and Conventions The ratification by the United States of international instruments related to the safety of nuclear facilities or radioactive materials could potentially impose binding provisions on the Nation that can affect responsible governmental agencies, such as the NRC.
Strategies to comply with new provisions would need to be developed.
Workforce Dynamics The agencys most valuable resource is its staff, and its ability to recruit, hire, train, motivate, and retain qualified staff in a competitive job market is critical to meeting its strategic goals. The agency must also maintain a high-performing, diverse, engaged, and flexible workforce supported by a healthy organizational culture with a focus on safety, security, and continuous improvement to meet mission needs. This will require the NRC to better understand and meet the needs of its employees and become a more flexible and agile organization.
Information Technology Advances Information technology developments in an increasingly mobile society will impact the agencys operations. The NRC will need to take advantage of technology to enable an effective and efficient work environment. It is essential to maintain a reasonable balance between the need to maximize technological innovation to perform the agencys mission and the secure use and protection of sensitive and proprietary information. The NRC needs to be aware of the heightened risk that sensitive information held by the agency, or its licensees could be lost, misplaced, or intercepted and obtained by unauthorized users. The agency will need to develop and maintain a knowledgeable workforce capable of addressing both these technology and security challenges.
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Chapter 1 Managements Discussion and Analysis Program Performance Overview The NRCs mission is to license and regulate the Nations civilian use of radioactive materials to provide reasonable assurance of adequate protection of public health and safety, to promote the common defense and security and to protect the environment.
Therefore, the trends for progress on the agencys strategic goals and objectives are to be at either zero or very low levels. The agency works to prevent or minimize the outcomes tracked by the safety and security performance indicators.
The NRC carries out its safety and security activities through two major programs: Nuclear Reactor Safety, consisting of the Operating Reactors and New Reactors business lines; and, Nuclear Materials and Waste Safety, consisting of the Fuel Facilities, Nuclear Materials Users, Decommissioning and Low-Level Waste, and Spent Fuel Storage and Transportation business lines. The agency accomplishes its mission to provide reasonable assurance of adequate protection for public health and safety through regulatory activities that include licensing, oversight, and rulemaking. The NRC oversees licensees through inspection, assessment, investigation, and enforcement actions. Investigations and enforcement actions are a subset of oversight in cases of suspected or proven instances of noncompliance with safety or security regulations. The NRCs event response activities prepare for and respond to emergencies involving radioactive materials. The following narrative highlights the agencys progress during FY 2023 in achieving its Safety and Security goals.
Strategic Goals and Objectives The NRCs FY 2022-2026 Strategic Plan describes the agencys mission, goals, and strategies and can be found at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1614/v8/. Each strategic goal has supporting objectives and strategies that reflect the desired outcome and the NRCs role in achieving it. The NRC has established three strategic goals that are supported by eight strategic objectives. The Annual Performance Plan and Report is expected to be published around February annually. It will be posted to NRCs Our Plans, Budget, and Performance webpage.
STRATEGIC GOAL 1: ENSURE THE SAFE AND SECURE USE OF RADIOACTIVE MATERIALS Safety and Security Provide quality licensing and oversight of nuclear facilities and Objective 1.1: radioactive materials.
Safety and Security Ensure regulatory requirements adequately support the safe and Objective 1.2: secure use of radioactive materials.
Safety and Security Maintain emergency preparedness and response capabilities for Objective 1.3: NRC and NRC-licensed facilities.
STRATEGIC GOAL 2: CONTINUE TO FOSTER A HEALTHY ORGANIZATION Organizational Health Foster an organizational culture in which the workforce is Objective 2.1: engaged, adaptable, receptive to change, and makes data-driven and evidence-based decisions.
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Chapter 1 Managements Discussion and Analysis Organizational Health Enable the workforce to carry out the agencys mission by Objective 2.2: leveraging modern technology, innovation, and knowledge management to support data-driven decisions in an evolving regulatory landscape.
Organizational Health Attract, develop, and maintain a high-performing, diverse, Objective 2.3: engaged, and flexible workforce with the skills needed to carry out the NRCs mission now and in the future.
STRATEGIC GOAL 3: INSPIRE STAKEHOLDER CONFIDENCE IN THE NRC Stakeholder Confidence Engage stakeholders in NRC activities in an effective and Objective 3.1: transparent manner.
Stakeholder Confidence Uphold an NRC decision-making process that is data-driven and Objective 3.2: evidence-based while ensuring information is available and accessible to interested stakeholders.
Strategic Goals and Performance Measures In conjunction with the development of the agencys Strategic Plan for FYs 2022-2026, the NRC developed performance goals and indicators for each strategic objective. Performance goals and indicators for Strategic Goal 1, which focus on safety and security, are output based and describe the level of product or activity that will be provided over time. The NRC works to prevent or minimize the outcomes tracked by the safety and security performance indicators. Therefore, performance indicators demonstrating progress on meeting the agencys strategic goal and objectives for safety and security are to be at either zero or very low levels. Strategic Goals 2 and 3 focus on organizational health and stakeholder confidence, respectively. These goals use outcome-based performance indicators, which describe the progress toward achieving the intended result.
The memorandum Formation of the Programmatic Senior Assessment Team, dated March 31, 2016 (Agencywide Documents Access and Management System Accession No. ML16067A159),
discusses output-based performance indicators that are out of standard to ensure mitigating strategies and determines whether the outcome-based performance indicators are achieving progress toward the intended results. The Programmatic Senior Assessment Team will make this determination during the agencys Quarterly Performance Review or Strategic Alignment Meetings. Outcome-based performance indicators use targets of heading in the right direction and can also produce results of opportunity for improvement or heading in the wrong direction.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 13
Chapter 1 Managements Discussion and Analysis In FY 2023, the NRC achieved its Safety goal strategic objective. The NRC uses five performance indicators to determine whether it has met its Safety goal. The agency met all five performance indicator targets in FY 2023. Table 1 shows the outcomes for the last 5 years (FY 2019-FY 2023).
Safety Performance Indicators: FY 2019-2023 Table 1 Goal-Safety: Ensure the Safe Use of Radioactive Materials
- 1. Prevent radiation exposures that significantly exceed regulatory limits.
Business Line FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Target Actual Target Actual Target Actual Target Actual Target Actual Operating Reactors 0 0 0 0 0 0 0 0 0 0 New Reactors 0 0 0 0 0 0 0 0 0 0 Fuel Facilities 0 0 0 0 0 0 0 0 0 0 Decommissioning 0 0 0 0 0 0 0 0 0 0 and Low-Level Spent Waste Fuel Storage 0 0 0 0 0 0 0 0 0 0 and Transportation Nuclear Materials 3 1 3 2 3 0 3 1³ 3 0 Users
- 2. Prevent releases of radioactive materials that significantly exceed regulatory limits.
Business Line FY 2019 FY 2020 FY 2023 FY 2022 FY 2023 Target Actual Target Actual Target Actual Target Actual Target Actual Operating Reactors 0 0 0 0 0 0 0 0 0 0 New Reactors 0 0 0 0 0 0 0 0 0 0 Fuel Facilities 0 0 0 0 0 0 0 0 0 0 Decommissioning 0 0 0 0 0 0 0 0 0 0 and Low-Level Spent Waste Fuel Storage 0 0 0 0 0 0 0 0 0 0 and Transportation Nuclear Materials 0 0 0 0 0 0 0 0 0 0 Users
- 3. Prevent the occurrence of any inadvertent criticality events.
Business Line FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Target Actual Target Actual Target Actual Target Actual Target Actual Operating Reactors 0 0 0 0 0 0 0 0 0 0 Fuel Facilities 0 0 0 0 0 0 0 0 0 0 Decommissioning 0 0 0 0 0 0 0 0 0 0 and Low-Level Waste
- 4. Prevent accident precursors and reductions of safety margins at commercial nuclear power plants (operating or under construction) that are of high safety significance.
Business Line FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Target Actual Target Actual Target Actual Target Actual Target Actual Operating Reactors 3 0 3 0 3 0 3 0 3 0 New Reactors 3 0 3 0 3 0 3 0 3 0
- 5. Prevent accident precursors and reductions of safety margins at nonreactor facilities or during transportation of nuclear materials that are of high safety significance.
Business Line FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Target Actual Target Actual Target Actual Target Actual Target Actual Fuel Facilities 0 0 0 0 0 0 0 0 0 0 Decommissioning 0 0 0 0 0 0 0 0 0 0 and Low-Level Spent Waste Fuel Storage 0 0 0 0 0 0 0 0 0 0 and Transportation Transportation FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 14
Chapter 1 Managements Discussion and Analysis Strategic Goal 1: Ensure the Safe Use of Radioactive Materials The NRC is tasked with providing reasonable assurance of adequate protection of public health and safety, promoting the common defense and security, and protecting the environment. The agency accomplishes this through day-to-day activities such as reviewing, issuing, and renewing power reactor licenses and amendments; overseeing the safety and security of power reactor facilities, including the storage and transportation of spent fuel; and licensing and regulating non-power uses of radioactive materials, such as industrial and medical applications of radionuclides. Although licensees and certificate holders have the primary responsibility for the safe and secure use of licensed radioactive material that they possess, the NRC establishes regulatory requirements, develops guidance, maintains continuing regulatory oversight, and, when necessary, enforces compliance with agency requirements throughout the license term.
Safety and Security Objective 1.1 Provide quality licensing and oversight of nuclear facilities and radioactive materials.
Summary of FY 2023 Progress The NRC continues to provide quality licensing and oversight of nuclear facilities and radioactive materials in a manner that protects public health and safety, promotes the common defense and security, and protects the environment.
Performance Measures Performance Goal 1.1.1: Prevent radiation exposures that significantly exceed regulatory limits.
Performance Indicator: Number of radiation exposures that meet or exceed Abnormal Occurrence (AO) Criteria I.A.1 (unintended radiation exposure to an adult), I.A.2 (unintended radiation exposure to a minor), or I.A.3 (radiation exposure that has resulted in unintended permanent functional damage to an organ or physiological system).
Performance Goal 1.1.2: Prevent releases of radioactive materials that significantly exceed regulatory limits.
Performance Indicator: Number of releases of radioactive materials that meet or exceed AO Criterion 1.B (discharge or dispersal of radioactive material from its intended place of confinement).
Performance Goal 1.1.3: Prevent the occurrence of any inadvertent criticality events.
Performance Indicator: Number of instances of unintended nuclear chain reactions involving NRC-licensed radioactive materials.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 15
Chapter 1 Managements Discussion and Analysis Safety and Security Objective 1.2 Ensure regulatory requirements adequately support the safe and secure use of radioactive materials.
Summary of FY 2023 Progress The NRC continues to ensure that the agencys regulatory requirements adequately support the safe and secure use of radioactive materials. The NRCs regulations impose requirements that licensees must meet to obtain or retain a license or certificate to use nuclear materials or operate a nuclear facility. These regulations govern the use of materials at such nuclear facilities as power plants, research reactors, uranium mills, fuel facilities, and waste repositories; the use of materials for medical, industrial, and academic purposes; and the transportation of materials.
Performance Measures Performance Goal 1.2.1: Prevent accident precursors and reductions of safety margins at commercial nuclear power plants that are of high safety significance.
Performance Indicator: Number of malfunctions, deficiencies, events, or conditions at commercial nuclear power plants (operating or under construction) that meet or exceed AO Criteria II.A-II.E (commercial nuclear power plant licensees).
Performance Goal 1.2.2: Prevent accident precursors and reductions of safety margins at nonreactor facilities or during transportation of nuclear materials that are of high safety significance.
Performance Indicator: Number of malfunctions, deficiencies, events, or conditions at nonreactor facilities or during transportation of nuclear materials that meet or exceed AO Criteria III.A or III.B (events at facilities other than nuclear power plants and all transportation events).
Performance Goal 1.2.3: Prevent sabotage, theft, diversion, or loss of risk-significant quantities of radioactive material.
Performance Indicator: Number of instances of sabotage, theft, diversion, or loss of risk-significant quantities of radioactive material that meet or exceed AO Criteria I.C.1 (stolen, abandoned, or unrecovered lost), I.C.2 (radiological sabotage), or I.C.3 (substantiated case of actual theft, diversion, or loss of a formula quantity of SNM or inventory discrepancy).
Safety and Security Objective 1.3 Maintain emergency preparedness and response capabilities for NRC and NRC-licensed facilities.
Summary of FY 2023 Progress The NRC continues to maintain an incident response program that oversees required FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 16
Chapter 1 Managements Discussion and Analysis emergency response activities for the NRC, NRC-licensed facilities, and radioactive materials licensees. The NRCs incident response program relies on the agencys Headquarters Operations Center (Rockville, Maryland) and four Regional Incident Response Centers (Region I in King of Prussia, Pennsylvania; Region II in Atlanta, Georgia; Region III in Lisle, Illinois; and Region IV in Arlington, Texas). The agency's response provides expert consultation, support, and assistance to State and local public safety officials responding to an event.
Activating the NRC incident response program brings teams of specialists, as needed, to the Headquarters Operations Center and Regional Incident Response Centers. These teams obtain and evaluate event information, assessing the event's potential impact on public health and safety and the environment. The NRC staff and management at the Headquarters Operations Center coordinate with the NRC Chair, Commission, Office of Public Affairs, and Office of Congressional Affairs any needed communications with the news media, State government, Federal agencies, members of Congress, and the White House.
Performance Measures Performance Goal 1.3.1: Prevent substantial breakdowns of physical security, cybersecurity, or material control and accountability.
Performance Indicator: Number of substantial breakdowns of physical security, cybersecurity, or material control and accountability that meet or exceed AO Criteria I.C.4 (substantial breakdown in physical security, cybersecurity, or material control and accountability) or I.C.3 (substantiated case of actual theft, diversion, or loss of a formula quantity of SNM or an inventory discrepancy).
Strategic Goal 2: Continue to Foster a Healthy Organization The health of an organization is a vital factor that can affect its capacity and capability to continuously improve. Focusing on organizational health provides opportunities to strengthen the workforce, culture, technology, and decision-making, which in turn enhances performance.
Organizational Health Objective 2.1 Foster an organizational culture in which the workforce is engaged, adaptable, and receptive to change and makes data-driven and evidence-based decisions.
Summary of FY 2023 Progress The NRC strives for a successful outcome of this goal by facilitating continuous learning and innovation, knowledge management, diversity, and inclusion; promoting and sustaining a strong safety culture; fostering creativity and innovation; connecting vision with action; and continuously adapting and striving to be a healthy organization. The NRC continued implementing the agencys culture improvement strategy with a focus on coaching and empowerment, recognizing and sharing different viewpoints, taking innovative approaches and discussing risk, showing mutual support and shared responsibility, and bringing the whole self to work.
Performance Measures Performance Goal 2.1.1: Foster an organizational culture that represents shared values, assumptions, beliefs, and behaviors.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 17
Chapter 1 Managements Discussion and Analysis Performance Indicator: Measures, milestones, or deliverables established on an annual basis to foster a desired organizational culture.
Performance Goal 2.1.2: Empowering decision-making across the agency.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis that empower staff decision-making.
Organizational Health Objective 2.2 Enable the workforce to carry out the agencys mission by leveraging modern technology, innovation, and knowledge management to support data-driven decisions in an evolving regulatory landscape.
Summary of FY 2023 Progress The NRC continues to carry out the agencys mission by leveraging modern technology, innovation, and knowledge management to support data-driven decisions in an evolving regulatory landscape. The NRCs approach focuses on modernizing IT tools and systems, improving business processes, enhancing access to data for more risk-informed decision-making, modernizing the agencys network, and improving stakeholder experience.
Performance Measures Performance Goal 2.2.1: Enhance innovation, knowledge management, and data-driven and evidence-based decision-making.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis for the development, modernization, and enhancement of agency operational and information technologies to support the mission.
Organizational Health Objective 2.3 Attract, develop, and maintain a high-performing, diverse, engaged, and flexible workforce with the skills needed to carry out the NRCs mission now and in the future.
Summary of FY 2023 Progress The NRC continues to promote strong employee engagement and to attract, develop, and maintain a high-performing, diverse, engaged, and flexible workplace with the skills needed to carry out the NRCs mission. The NRC is also taking steps to implement recommendations to strengthen the hybrid work environment and ensure that its workforce has the tools and resources to affectively achieve its mission.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 18
Chapter 1 Managements Discussion and Analysis Performance Measures Performance Goal 2.3.1: Develop and maintain a high performing workforce.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis to maintain an adaptable and skilled workforce through workforce planning and staff training and development.
Performance Goal 2.3.2: Enhance the agencys decision-making through knowledge management.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis to enhance knowledge management through the identification and capturing of critical information and leveraging the agencys investments in modern information management and technology.
Strategic Goal 3: Inspire Stakeholder Confidence in the NRC The NRC values building confidence with all stakeholders. Confidence is forward looking and reflects stakeholder belief in the integrity of future agency actions and decisions. To gain stakeholder confidence and trust, the agency must engage in a transparent, open, and independent manner and make data-driven and evidence-based decisions.
Stakeholder Confidence Objective 3.1 Engage stakeholders in NRC activities in an effective and transparent manner.
Summary of FY 2023 Progress The NRC continues to engage stakeholders in the agencys activities in an effective and transparent manner. To achieve this goal, the NRC promotes transparency, openness, and independence in its regulatory activities by fostering engagement and providing multiple ways for members of the public to be informed and participate in the agencys regulatory activities.
The NRC continues to publish and provide information to stakeholders through its website (www.nrc.gov); operates the agencys Public Document Room at its headquarters in Rockville, Maryland; and holds public meetings virtually and in person throughout the country.
Performance Measures Performance Goal 3.1.1: Enhance the effectiveness and transparency of stakeholder engagement.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis to build stakeholder confidence through effective communication, by providing multiple ways stakeholders can provide feedback and input, and by ensuring the NRC staff is communicating clearly and openly.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 19
Chapter 1 Managements Discussion and Analysis Stakeholder Confidence Objective 3.2 Uphold an NRC decision-making process that is data driven and evidence based while ensuring information is available and accessible to interested stakeholders.
Summary of FY 2023 Progress The NRC continues to uphold a data-driven and evidence-based decision-making process while ensuring information is available and accessible to interested stakeholders to build stakeholder confidence and foster engagement.
Performance Measures Performance Goal 3.2.1: Employ and incorporate high-quality data and information to support agency decision-making processes.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis that identify and disseminate data and evidence used to facilitate programmatic and organizational decision-making and policymaking.
Performance Goal 3.2.2: Provide the public timely access to information to ensure transparency and inclusiveness of the agencys decision-making process.
Performance Indicator: Measures, milestones, or deliverables established on an annual basis to enhance timeliness and access to discoverable and usable high-quality data sets and information.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 20
Chapter 1 Managements Discussion and Analysis Source of Funds Appropriations The NRC receives two appropriations: (1) Salaries and Expenses and (2) the Office of the Inspector General (OIG). For FY 2023, the NRC received total appropriations of
$927.2 million, which included $911.4 million for the Salaries and Expenses appropriation and
$15.8 million for the OIG. The NRCs Salaries and Expenses appropriation increased $35.5 million compared to the prior year. The appropriation for the OIG increased by $2.0 million.
The Salaries and Expenses appropriation is available until expended. This includes a provision that not more than $9.5 million be made available for the Office of the Commission; these funds are available for obligation for two years. After that date, the remaining funds that have not been obligated for the Office of the Commission are available until expended as part of the Salaries and Expenses appropriation. On May 21, 2022, NRC received additional appropriation of $2 million to NRCs Salaries and Expenses account for the specific purpose of providing regulatory and technical support related to the situation in Ukraine, available until expended.
The OIG receives a 2-year appropriation which includes $1.5 million in funding for Inspector General services provided to the Defense Nuclear Facilities Safety Board (DNFSB).
Total Budget Authority The total budget authority Table 2 Total Budget Authority (In Millions) available for the NRC to For the fiscal years ended expend in FY 2023 was 2023 2022 Inc/(Dec)
September 30,
$1,087.4 million and included Appropriations
$927.2 million for current year Salaries and Expenses $911.4 $875.9 $35.5 appropriations, $133.9 Office of the Inspector General 15.8 13.8 2.0 million from prior year appropriations, $19.1 Total Appropriations 927.2 889.7 37.5 million from recoveries of Other Budget Authority prior-year obligations, and Unobligated balance from
$7.2 million spending authority prior-year budget authority, 133.9 100.7 33.2 from offsetting collections. brought forward October 1 Recoveries of prior-year Funds available in FY 2023 19.1 24.1 (5.0) obligations increased from the FY 2022 Spending Authority from amount of $1,019.9 million by 7.2 5.4 1.8 Offsetting Collections
$67.5 million, primarily as a Total Other Budget Authority 160.2 130.2 30.0 result of an increase of $37.5 million in current year Total NRC Budget Authority $1,087.4 $1,019.9 $67.5 appropriations and an increase of $33.2 million in unobligated balances from prior-year budget authority.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 21
Chapter 1 Managements Discussion and Analysis Fee Collection Offset of Appropriations The Nuclear Energy Innovation Table 3 Sources of Funds for Appropriations (In Millions) and Modernization Act For the fiscal years ended 2023 2022 Inc/(Dec)
(NEIMA), requires the NRC to September 30, recover, to the maximum extent Reactor Fees Collected $706.4 $670.9 $35.5 practicable, approximately 100 Materials Fees Collected 75.3 66.4 8.9 percent of its annual budget less Nuclear Waste Fund 0.0 0.0 0.0 certain amounts excluded from Treasury General Fund 145.5 152.4 (6.9) this fee recovery requirement.
Total Sources of Funds $927.2 $889.7 $37.5 Funds equal to fees collected are transferred to the NRCs two appropriations, and the U.S. Department of the Treasury (Treasury) issues a negative warrant in the amount of the fee transfer to reduce the NRCs appropriations.
In FY 2023, the NRC collected $781.7 million, and the net received from the Treasury general fund was $145.5 million (see Table 3). The fees collected during FY 2022 and transferred to the Treasury totaled $737.3 million.
Analysis of the Financial Statements Chapter 2 presents the NRCs financial statements, accompanying notes, and required supplementary information. The independent auditors issued an unmodified opinion on the financial statements and an unmodified opinion on internal controls over financial reporting for the FY ended 2023. Additionally, the independent auditors found no reportable instances of noncompliance with laws and regulations.
The principal financial statements are prepared to report the financial position and results of operations of the NRC, pursuant to the requirements of 31 United States Code (U.S.C.) § 3515(b). The statements are prepared from the books and records of the NRC in accordance with Federal generally accepted accounting principles (GAAP) and the formats prescribed by the Office of Management and Budget (OMB). Reports used to monitor and control budgetary resources are prepared from the same books and records. The financial statements should be read with the realization that they are for a component of the U.S. Government.
We present the following analysis of the financial statements and significant changes (see Table 4).
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 22
Chapter 1 Managements Discussion and Analysis Table 4 Key Measures (In Millions)
For the fiscal years ended FY 2023 FY 2022 Inc/(Dec) %
September 30, Assets:
Fund Balance with Treasury $412.6 $384.3 $28.3 7.4%
Accounts Receivable, Net 63.0 58.1 4.9 8.4%
Advances and Prepayments 5.0 4.3 0.7 16.3%
Property & Equipment, Net 29.7 32.3 (2.6) (8.0%)
Total Assets $510.3 $479.0 $31.3 6.5%
Liabilities:
Accounts Payable $26.6 $31.7 $(5.1) (16.1%)
Federal Employee Benefits 52.4 50.5 9 1.9 3.8%
Other Liabilities 29.5 26.3 3.2 12.2%
Total Liabilities $108.5 $108.5 $0.0 0%
Net Position (Assets minus Liabilities) $401.8 $370.5 $31.3 8.4%
COST BY PROGRAMS Nuclear Reactor Safety $735.7 $699.1 $36.6 5.2%
Nuclear Materials and Waste Safety 206.0 196.6 9.4 4.8%
LESS: Earned Revenue (License Fees) 783.1 737.3 45.8 6.2%
Net Cost of Operations $158.6 $158.4 $0.2 0.1%
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 23
Chapter 1 Managements Discussion and Analysis Analysis of the Balance Sheet Assets. The NRCs total assets were $510.3 million as of September 30, 2023, representing an increase of $31.3 million from the fiscal year ended September 30, 2022. Changes in major categories include increases of $28.3 million in the Fund Balance with Treasury, $0.7 million in Advances and Prepayments and $4.9 million in Accounts Receivable net, and a decrease of
$2.6 million in Property and Equipment, Net.
The Fund Balance with Treasury was $412.6 million as of September 30, 2023, which accounts for 81 percent of total assets. This account consists of cash or cash equivalents from appropriated funds, license fee collections, and other funds maintained at the U.S. Treasury to pay current liabilities and to finance authorized purchase commitments.
The Fund Balance with Treasury can vary largely due to timing of disbursing payments and receiving collections as well as changes in the appropriations.
Accounts Receivable, Net consists mainly of amounts that other Federal agencies and the public owe to the NRC for license fees. As of September 30, 2023, Accounts Receivable, Net was $63.0 million, which includes an offsetting allowance for doubtful accounts of $2.4 million.
This represents a net increase in Accounts Receivable, Net of $4.9 million from the FY 2022 amount of $58.1 million. The increase is primarily due to a growth in unbilled fees receivable of $4.7 million, miscellaneous receivables with the public of $1.8 million and intragovernmental billed fees receivable of $0.5 million, and a decrease in billed fees receivable of $1.8 million.
In addition, there was an increase in the allowance of doubtful accounts of $0.4 million which is an offset to accounts receivable.
Property and Equipment, Net consists primarily of office equipment, leasehold improvements, nuclear reactor simulators, and computer hardware and software. The NRC has no real property.
The land and buildings in which the NRC operates are leased from the U.S. General Services Administration (GSA). At the end of FY 2023, Property and Equipment, Net was $29.7 million, a
$2.6 million decrease from the FY 2022 amount of $32.3 million. The decrease primarily results from the amortization/depreciation expense of $7.5 million recognized across multiple property categories and the disposition of $5.8 million of leasehold improvements; offset by an increase in capitalized acquisitions of $10.9 million.
Liabilities. Total Liabilities were $108.5 million as of September 30, 2023, representing no change from the FY 2022 balance of $108.5 million. Liabilities consist primarily of accounts payable to other Federal agencies and the public, grants payable, accrued salaries and benefits, and other accrued employee benefits.
Total Liabilities include liabilities not covered by budgetary resources, which represent expenses recognized in the financial statements that will be paid from future appropriations. The liabilities not covered by budgetary resources were $57.9 million for FY 2023, compared to $57.1 million for end of FY 2022, a $0.8 million increase. For FY 2023, the liabilities not covered by budgetary resources represent 53.4 percent of Total Liabilities and mainly encompasses $48.9 million in unfunded accrued annual leave that has been earned but not yet taken, $3.1 million as an actuarial estimate of accrued future workers compensation expenses included in Federal employee benefits, $0.8 million in accrued workers compensation included in Other Liabilities, and a $4.6 million accrual to GSA for future annual rent increases on the rent of NRC office buildings.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 24
Chapter 1 Managements Discussion and Analysis Net Position. The difference between Total Assets and Total Liabilities, Net Position, was
$401.8 million as of September 30, 2023, an increase of $31.3 million from the FY 2022 year end balance. Net Position comprises two components: Unexpended Appropriations and Cumulative Results of Operations which is the cumulative excess of financing sources over expenses. The analysis of the Statement of Changes in Net Position provides additional information on the significant changes to Net Position for FY 2023 year-end.
Analysis of the Statement of Net Cost The Statement of Net Cost presents the gross cost of the NRCs two major programs (Nuclear Reactor Safety and Nuclear Materials and Waste Safety) as identified in the NRC Annual Performance Plan, offset by earned revenue. The purpose of this statement is to link program performance to the cost of programs. The NRCs net cost of operations for the year ended September 30, 2023, was $158.6 million, representing an increase of $0.2 million compared to the FY 2022 net cost of $158.4 million. This represents an increase in gross costs of $46.0 million less an increase in earned revenue of $45.8 million.
Gross Cost. The NRCs total gross costs were $941.7 million for FY 2023, an increase of
$46 million from the prior-year amount of $895.7 million. The gross costs in FY 2023 for the Nuclear Reactor Safety program were $735.7 million compared to FY 2022 gross costs of
$699.1 million, an increase of $36.6 million. The gross costs in FY 2023 for the Nuclear Materials and Waste Safety program were $206.0 million compared to FY 2022 gross costs of
$196.6 million, an increase of $9.4 million. Thus, the gross cost of both programs increased a total of $46.0 million. The increase primarily results from the Nuclear Reactor Safety Program and Nuclear Materials and Waste Safety Programs other than intragovernmental gross costs increase of $35.4 million and $7.3 million respectively, as well as an increase in the Nuclear Reactor Safety Program and Nuclear Materials and Waste Safety Programs intragovernmental costs of $1.2 million and $2.1 million respectively.
Earned Revenue. Total earned revenue for FY 2023 was $783.1 million, an increase of
$45.8 million from the FY 2022 earned revenue of $737.3 million. Revenue for the Nuclear Reactor Safety program in FY 2023 was $708.3 million compared to $670.9 million in FY 2022, an increase of $37.4 million. Revenue from the Nuclear Materials and Waste Safety program in FY 2023 was $74.8 million compared to $66.4 million in FY 2022, an increase of $8.4 million.
The increase in earned revenue is primarily a result of the fee base, that is, the amount of the appropriated budget that Congress directs the NRC to recover in license fees.
The NRC is required to collect approximately 100 percent of its annual budget, less certain amounts excluded from this fee recovery requirement, through license fee billing. The agency collects fees for reactor and materials licensing and inspections in accordance with Title 10 of the Code of Federal Regulations (10 CFR) Part 170, Fees for Facilities, Materials, Import and Export Licenses, and Other Regulatory Services under the Atomic Energy Act of 1954, as amended, at https://www.nrc.gov/reading-rm/doc-collections/cfr/part170/, and 10 CFR Part 171, Annual Fees for Reactor Licenses and Fuel Cycle Licenses and Materials Licenses, Including Holders of Certificates of Compliance, Registrations, and Quality Assurance Program Approvals and Government Agencies Licensed by the NRC, at https://www.nrc.gov/reading-rm/doc-collections/cfr/part171/.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 25
Chapter 1 Managements Discussion and Analysis Analysis of the Statement of Changes in Net Position The Statement of Changes in Net Position reports the change in net position for the reporting period. Net position is affected by the changes in two components: (1) Cumulative Results of Operations and (2) Unexpended Appropriations. In FY 2023, the NRC had an increase in Net Position of $31.3 million resulting from an increase of $31.7 million in Unexpended Appropriations and a decrease in Cumulative Results of Operations of $0.4 million.
The increase in FY 2023 Unexpended Appropriations of $31.7 million resulted from an increase in the beginning balance of $23.5 million and an increase of $2.8 million appropriations received, offset by Other adjustments, and Appropriations used to finance the NRC operations totaling
$5.4 million. The increase in appropriations received, net of license fees collected, resulted from appropriations received for FY 2023 of $927.2 million, reduced by current year license fee collections of $773.8 million, as compared to appropriations received in FY 2022 of $889.7 million, reduced by FY 2022 license fee collections of $739.1 million.
Analysis of the Statement of Budgetary Resources The Statement of Budgetary Resources (SBR) provides information on budgetary resources available to the NRC and their status at the end of the period. In FY 2023, the Total Budgetary Resources available were $1,068.3 million. This was $72.6 million more than the $995.7 million available in FY 2022. The following categories contributed to this change: Salaries and Expenses, increase of $35.5 million, Office of the Inspector General, (OIG), increase of $2.0 million, Unobligated balance from prior-year authority, brought forward October 1, increase of $33.2 million, and Spending Authority from Offsetting Collections, increase of $1.8 million.
The SBR accounts for operational activities funded by NRCs budgetary resources during the fiscal year. The NRCs obligations for FY 2023 were $946.8 million, an increase of $56.1 million from the prior-year amount of $890.7 million. The following categories contributed to this change: Salaries and Expenses, increase of $56.6 million, and a decrease in the Office of the Inspector General, (OIG) of $0.5 million.
The SBR also accounts for the funds that were not obligated and used for operations during the fiscal year. The balance of unobligated budgetary resources at the end of FY 2023 was $121.5 million, compared to $105.0 million for the prior year. The following categories contributed to this change: Salaries and Expenses, increase of $14.1 million, and an increase in the Office of the Inspector General, (OIG) of $2.4 million.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 26
Chapter 1 Managements Discussion and Analysis Analysis of Systems, Controls, and Legal Compliance Federal Managers Financial Integrity Act of 1982 The Federal Managers Financial Integrity Act of 1982 (FMFIA or Integrity Act) requires that Federal agencies establish effective internal control and provide reasonable assurance that the following objectives are being met:
- Program Management - Programs are achieving their intended results, and are protected from waste, fraud, abuse, and mismanagement;
- Resource Management - Resources are being used consistently with the agencys mission;
- IT Systems - Information systems are authorized and appropriately secured;
- Laws and Regulations - Laws and regulations are followed; and
- Communication - Reliable and timely information is obtained, maintained, reported, and used for sound decision-making.
The agencys program, operational, and administrative areas, as well as accounting and financial management, are covered by the Integrity Act. The Act also requires the NRC Chair to provide an assurance statement on the adequacy of internal controls and on the conformance of financial systems with Government-wide standards.
Enterprise Risk Management and Programmatic Internal Control Enterprise Risk Management (ERM) provides an enterprise-wide portfolio view of organizational challenges that provides better insight about how to most effectively prioritize resource allocations to ensure successful mission delivery. A principal component of ERM is Internal Control, which the U.S. Government Accountability Office in GAO-14-704G, Standards for Internal Control in the Federal Government, defines as a process effected by an entitys oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved.
OMB Circular A-123, Managements Responsibility for Enterprise Risk Management and Internal Control, provides Federal agencies guidance on how to comply with the Integrity Act and requires Federal managers to effectively manage risks that may impact agencies in meeting their strategic objectives. Each year NRC has continually matured its ERM Framework. The NRCs ERM Framework meets OMB requirements.
In FY 2021, the OIG conducted an audit of the NRCs implementation of the ERM Process.
The report was issued in September 2021 and included eight recommendations to improve the overall alignment of the NRCs ERM to the guidance provided in OMB Circular A-123.
As of September 30, 2023, all the audit recommendations have either been deemed resolved by the OIG or are actively being implemented by the NRC.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 27
Chapter 1 Managements Discussion and Analysis Under the NRCs FMFIA Governance Framework (see Figure 6), reading from right to left: the Chief Financial Officer (CFO) is responsible for ensuring that the agency complies with the Federal Financial Management Improvement Act of 1996 (Improvement Act), and Section 4 of the Integrity Act, Financial Systems.
The Senior Assessment Team (SAT),
chaired by the CFO, is responsible for ensuring that the agency complies with Appendix A of OMB Circular A-123, Management of Reporting and Data Figure 6 The NRCs Integrity Act Integrity Risk. The Executive Committee Governance Framework on Enterprise Risk Management (ECERM), co-chaired by the CFO and the Executive Director for Operations, is Figure 6 responsible for ensuring that the agencys The NRCs FMFIA Governance Framework internal control over programmatic operations complies with the Integrity Act.
The other members that comprise the ECERM are senior executives from the Office of the Executive Director for Operations and the Chief Information Officer. The agencys General Counsel, Inspector General, and the agencys Internal Control Team Leader serve as advisory members. The other members of the SAT Include senior executives from the Office of the Chief Financial Officer (OCFO) as well as senior officials from the agencys corporate support product lines, (i.e., the Chief Human Capital Officer, the Chief Information Officer, and the Director of the Office of Administration, who oversees the agencys Division of Acquisitions).
The ECERM assessed the agencys programmatic operations, financial systems, and internal control over reporting and found there is reasonable assurance that NRC internal control is achieving its intended results. The ECERM voted to recommend that the Chair sign the agencys Federal Managers Financial Integrity Act Statement (see Figure 7).
Integrity Act Results As required by Section 2 of the Integrity Act and under the guidance established in OMB Circular A-123, all NRC business line leads and corporate support product lines certified that, as of September 30, 2023, there was reasonable assurance that internal control was in place producing intended results. Based on managements certification of reasonable assurance, the NRC can provide a statement of assurance that its internal control met the objectives of the Integrity Act and conforms to Government-wide standards.
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Chapter 1 Managements Discussion and Analysis Figure 7 FY 2023 Federal Managers Financial Integrity Act Statement FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 29
Chapter 1 Managements Discussion and Analysis Office of Management and Budget Circular A-123, Managements Responsibility for Enterprise Risk Management and Internal Control Management of Reporting and Data Integrity Risk (Appendix A)
The NRC conducted its assessment of the effectiveness of internal control over reporting, which includes safeguarding of assets and compliance with applicable laws and regulations, in accordance with the requirements of Appendix A of OMB Circular A-123. Based on the results of the evaluation, the NRC can provide reasonable assurance that its internal control over reporting as of September 30, 2023, was operating effectively, and no material weaknesses were found in the design or operation of the internal control over reporting.
Risk Management Framework for Government Charge Card Programs (Appendix B)
The Government Charge Card Abuse Prevention Act (Charge Card Act) of 2012 establishes reporting and audit requirement responsibilities for executive branch agencies. NRCs Office of Administration (ADM) has procedures in place for use of purchase cards. ADM updated NRCs Purchase Card Management Plan in early October 2023. Also, NRCs Office of Chief Financial Officer (OCFO) has procedures in place for the use of the travel charge card. OCFO updated NRC's Travel Charge Card Management Plan in early October 2023. NRC has reviewed the Purchase Charge Card and Travel Card programs for compliance with the Charge Card Act and can provide reasonable assurance that appropriate policies and controls are in place to mitigate the risk of fraud and inappropriate charge card practices in accordance with OMB Circular A-123, Appendix B.
Requirements for Payment Integrity Improvement (Appendix C)
In accordance with the Payment Integrity Information Act of 2019 (PIIA), the NRC conducts a risk assessment to determine whether any programs were susceptible to making significant improper payments on a triennial basis. The NRC conducted the latest risk assessment in FY 2023.
The FY 2023 risk assessment did not identify any programs that were susceptible to making significant improper payments. Although the results of the FY 2023 risk assessment identified programs as low risk, the NRC continues to monitor its payment processes, in addition to conducting periodic reviews of key controls for PIIA programs if identified by management. The NRC will continue to conduct a risk assessment on a triennial basis, in accordance with PIIA and OMB guidance. The next NRC PIIA risk assessment will take place in FY 2026. In addition, the NRC will conduct additional risk assessments, as needed, if there are material changes in programs operations or if the NRC establishes new programs.
Chapter 3, Other Information, of this report presents additional information in the Payment Integrity section.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 30
Chapter 1 Managements Discussion and Analysis Federal Financial Management Improvement Act of 1996 The Federal Financial Management Improvement Act of 1996 (FFMIA or Improvement Act) requires each agency to implement and maintain systems that comply substantially with:
(1) Federal financial system requirements; (2) applicable Federal accounting standards; and, (3) the standard general ledger at the transaction level. FFMIA requires the Chair to determine whether the agencys financial management system complies with FFMIA and to develop remediation plans for systems that do not comply.
Improvement Act Results In September 2023, the CFO successfully completed an enhancement to fully automate the reimbursable agreement financial activity within the agencys core financial system, Financial Accounting and Integrated Management Information System (FAIMIS), to meet Treasurys G-Invoicing Phase II mandate.
The CFO also worked through the requirements, configuration, development and testing of four new socio-economic data fields from the GSA Federal Procurement Data System to the GSA SAM.gov/FAIMIS interface by the August 31, 2023, mandated deadline.
The CFO reviewed audit reports and other sources of information and, as of September 30, 2023, can provide reasonable assurance that NRCs financial systems substantially comply with applicable Federal accounting standards as required by the Improvement Act.
Digital Accountability and Transparency Act (DATA Act) of 2014 The DATA Act aims to establish Government-wide financial data standards and increase the availability, accuracy, and usefulness of Federal spending information. The DATA Act has the following purposes:
- Establish Government-wide data standards for financial data and provide consistent, reliable, and searchable Government-wide spending data that are accurately displayed.
- Expand accountability of the Federal Funding Accountability and Transparency Act of 2006 to disclose direct Federal Agency expenditures and link Federal contract, loan, and grant spending information to programs.
- Simplify reporting for entities receiving Federal funds by streamlining requirements and reducing compliance costs while improving transparency.
- Improve data quality submitted to USASpending.gov by holding Federal agencies accountable for the completeness and accuracy of the information submitted.
- Apply approaches developed by the Recovery Accountability and Transparency Board for spending across the Federal Government to increase spending transparency and reduce reporting burden.
- NRC continues to refine internal processes related to DATA Act to streamline the monthly and quarterly reviews of the DATA Act files. NRC submitted and published monthly files which were certified on a quarterly basis.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 31
Chapter 1 Managements Discussion and Analysis Financial Management Systems Strategies The OCFO continues to explore ways in which automation can result in increased efficiencies within the financial management business processes, specifically in the areas of transaction processing and data reconciliation. OCFO identified a key business process related to the movement of de-obligated prior year funds that utilized a heavily manual process and worked through developing a solution that automated a significant portion of the process.
In FY 2023, OCFO began the discovery phase of two additional automation initiatives, the configuration of automated general tie-point reconciliation within the core ledger system and automating the reconciliation of Central Accounting Reporting System (CARS) transactions with core ledger system transactions. The CARS automated reconciliation was implemented in March 2023 while the automated tie-point reconciliation is scheduled to complete before June 2024. The CARS automated reconciliation resulted in tangible benefits and business efficiencies.
In addition to focusing on areas ripe for automation, the OCFO has completed migrating of financial management systems from on-premises to FedRAMP based Cloud Infrastructure aligning with the agencys enterprise architecture strategy.
Prompt Payment The Prompt Payment Act of 1982, as amended, requires Federal agencies to make timely payments to vendors for supplies and services, to pay interest penalties when payments are made after the due date, and to take cash discounts when they are economically justified. In FY 2023, the NRC paid 98.3 percent of the 4,603 invoices subject to the Prompt Payment Act on time.
Debt Collection The Debt Collection Improvement Act of 1996 enhances the ability of the Federal Government to service and collect debts. The agencys goal is to maintain the level of delinquent debt owed to the NRC at year-end to less than 1 percent of its annual billings. The NRC met this goal. At the end of FY 2023, delinquent debt was $4.2 million or less than 1 percent of annual billings.
The NRC was able to refer 100 percent of all eligible debt over 180 days delinquent to the Treasury for collection and 100 percent over 120 days old in accordance with the DATA Act. In addition, the NRC met the collections requirements of NEIMA which requires the agency to recover through fees approximately 100 percent of its annual budget, less certain amounts excluded from this fee recovery requirement, in the current fiscal year.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 32
Chapter 1 Managements Discussion and Analysis Biennial Review of User Fees The Chief Financial Officers Act of 1990 requires agencies to conduct a biennial review of fees, royalties, rents, and other charges imposed by agencies and to revise fees as appropriate to recover program and administrative costs incurred. The NRC conducted the following reviews in FY 2023:
- Small Materials - Completed June 2023
- Import/Export Materials - Completed June 2023
- Information Access and Material Access Authorization Programs - Completed October 2023
- Criminal History Program - Completed October 2023
- Auditorium Fees - Completed August 2023
- Navy Porting Fees - Completed September 2023
- Freedom of Information Act - Completed June 2023
- Administrative Charges for Delinquent Debt - Completed August 2023 On June 15, 2023, the NRC issued a final rule in the Federal Register (FR) amending the licensing, inspection, special project, and annual fees charged to its applicants and licensees. These amendments are necessary to implement NEIMA, which requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its annual budget less certain amounts excluded from this fee-recovery requirement.
The FY 2023 rule can be found at https://www.federalregister.gov/documents/2023/06/15/2023-12696/revision-of-fee-schedules-fee-recovery-for-fiscal-year-2023 By law, the following appropriated amounts are excluded from the fee-recovery requirement: any type of fee-relief activity as identified by the Commission, generic homeland security activities, waste incidental to reprocessing activities, Nuclear Waste Fund (NWF) activities, advanced reactor regulatory infrastructure activities, Inspector General services for the Defense Nuclear Facilities Safety Board (DNFSB), research and development at universities in areas relevant to the NRCs mission, and a nuclear science and engineering grant program.
Based on the Consolidated Appropriations Act, 2023, the final rule reflects a budget authority in the amount of $927.2 million. After accounting for the fee-recovery exclusions and net billing adjustments, the NRC must recover approximately $790.6 million in fees in FY 2023.
Inspector General Act of 1978 The NRC has established and continues to maintain an excellent record in resolving and implementing OIG open audit recommendations. The status of these recommendations can be found at: https://www.nrc.gov/reading-rm/doc-collections/insp-gen.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 33
Chapter 1 Managements Discussion and Analysis Grey Water Pond at Palo Verde FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 34
Chapter 2: Financial Statements and Auditors Report Chapter 2 Financial Statements and Auditors Report A Message from the Chief Financial Officer FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 36
Chapter 2 Financial Statements and Auditors Report Financial Statements Consolidated Balance Sheets (In Thousands)
As of September 30, 2023 2022 Assets Intragovernmental assets:
Fund balance with Treasury (Note 2) $ 412,625 $ 384,244 Accounts receivable, net (Note 3) 4,982 4,482 Advances and prepayments 4,957 4,271 Total intragovernmental 422,564 392,997 Other than intragovernmental assets:
Accounts receivable, net (Note 3) 57,954 53,661 General Property and equipment, net (Note 4) 29,687 32,295 Advances and prepayments 52 55 Total other than intragovernmental assets 87,693 86,011 Total Assets $ 510,257 $ 479,008 Liabilities Intragovernmental liabilities:
Accounts payable $ 5,906 $ 12,152 Other liabilities (Note 5) 8,045 9,163 Total intragovernmental liabilities 13,951 21,315 Other than intragovernmental liabilities:
Accounts payable 20,714 19,524 Federal employee benefits payable (Note 6) 52,326 50,496 Other liabilities (Note 5) 21,479 17,175 Total other than intragovernmental liabilities 94,519 87,195 Total Liabilities 108,470 108,510 Net Position Unexpended appropriations 360,502 328,773 Cumulative results of operations 41,285 41,725 Total Net Position 401,787 370,498 Total Liabilities and Net Position $ 510,257 $ 479,008 The accompanying notes to the financial statements are an integral part of these statements.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 37
Chapter 2 Financial Statements and Auditors Report Consolidated Statements of Net Cost (In Thousands)
For the years ended September 30, 2023 2022 Nuclear Reactor Safety Gross costs $ 735,685 $ 699,128 Less: Earned revenue (Note 10) (708,348) (670,907)
Net Cost of Nuclear Reactor Safety (Note 9) 27,337 28,221 Nuclear Materials and Waste Safety Gross costs 205,996 196,573 Less: Earned revenue (Note 10) (74,734) (66,356)
Total Net Cost of Nuclear Materials and Waste Safety (Note 9) 131,262 130,217 Net Cost of Operations $ 158,599 $ 158,438 The accompanying notes to the financial statements are an integral part of these statements.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 38
Chapter 2 Financial Statements and Auditors Report Consolidated Statements of Changes in Net Position (In Thousands)
For the years ended September 30, 2023 2022 Unexpended Appropriations Beginning Balance $ 328,773 $ 305,238 Appropriations received 153,372 150,619 Other adjustments (629) (900)
Appropriations used (Note 11) (121,014) (126,184)
Net Change in Unexpended Appropriations 31,729 23,535 Total Unexpended Appropriations, ending balance 360,502 328,773 Cumulative Results of Operations Beginning Balance $ 41,725 $ 49,830 Beginning Balance, as adjusted $ 41,725 $ 49,830 Appropriations used (Note 11) 121,014 126,184 Non exchange revenue (Note 11) (240) 209 Imputed financing (Note 11) 37,145 24,149 Other 240 (209)
Net Cost of Operations (158,599) (158,438)
Net Change in Cumulative Results of Operations (440) (8,105)
Total Cumulative Results of Operations $ 41,285 $ 41,725 Net Position $ 401,787 $ 370,498 The accompanying notes to the financial statements are an integral part of these statements.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 39
Chapter 2 Financial Statements and Auditors Report Combined Statements of Budgetary Resources (In Thousands)
For the years ended September 30, 2023 2022 Budgetary Resources Unobligated balance from prior-year budget authority, net $ 133,924 $ 100,646 (discretionary and mandatory)
Appropriations (discretionary and mandatory) 927,153 889,700 Spending authority from offsetting collections 7,224 5,397 (discretionary and mandatory)
Total Budgetary Resources $ 1,068,301 $ 995,743 Status of Budgetary Resources New obligations and upward adjustments (total) Unobligated balance, $ 946,775 $ 890,682 end of year Apportioned, unexpired accounts 109,454 102,591 Exempt from apportionment, unexpired accounts 219 281 Unapportioned, unexpired accounts 9,922 301 Unexpired unobligated balance, end of year 119,595 103,173 Expired unobligated balance, end of year 1,931 1,888 Unobligated balance, end of year (total) 121,526 105,061 Total Budgetary Resources $ 1,068,301 $ 995,743 Outlays, Net, and Disbursements, Net Outlays, net (total) (discretionary and mandatory) 898,144 881,353 Distributed offsetting receipts (-) (773,781) (739,081)
Agency Outlays, net $ 124,363 $ 142,272 The accompanying notes to the financial statements are an integral part of these statements.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 40
Chapter 2 Financial Statements and Auditors Report Notes to the Financial Statements (All tables are presented in thousands)
Note 1 - Summary of Significant Accounting Policies A. Reporting Entity The U.S. Nuclear Regulatory Commission (NRC) is an independent regulatory agency of the U.S. Federal Government that the Congress created to regulate the Nations civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, to promote the common defense and security, and to protect the environment. Its purposes are defined by the Energy Reorganization Act of 1974, as amended, along with the Atomic Energy Act of 1954, as amended, which provide the foundation for regulating the Nations civilian use of nuclear materials.
The NRC operates through the execution of its congressionally approved appropriations for Salaries and Expenses (which includes funds derived from the Nuclear Waste Fund (NWF) and OIG.
The reporting entity is a component of the U.S. Government. For this reason, some of the assets and liabilities reported by the entity may be eliminated for Government-wide reporting because they are offset by assets and liabilities of another U.S. Government entity.
B. Basis of Presentation These financial statements for Fiscal Year (FY) 2023 and FY 2022 (prior-year) are presented on a comparative basis. They report the financial position and results of operations of the NRC as required by the Chief Financial Officers Act of 1990 and the Government Management Reform Act of 1994. These financial statements were prepared from the books and records of the NRC in conformance with generally accepted accounting principles (GAAP) for Federal entities of the United States and the form and content for entity financial statements specified in OMB Circular A-136. GAAP for Federal entities are the standards prescribed by the Federal Accounting Standards Advisory Board (FASAB). The FASAB has been recognized by the American Institute of Certified Public Accountants (AICPA) as the official accounting standard setting authority for the Federal government. These statements are different from the financial reports prepared by the NRC in compliance with OMB directives, which are used to monitor and control the NRC's use of budgetary resources.
Presentation of the budget accounts on the Combined Statement of Budgetary Resources shows columns for the no-year Salaries and Expenses appropriation, which includes funding for the Office of the Commission; no-year and 2-year funds aggregated for the OIG, and the Nuclear Facility Fees, which reflects the Distributed Offsetting receipts.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 41
Chapter 2 Financial Statements and Auditors Report The NRC collects miscellaneous receipts for information requests under the Freedom of Information Act; civil penalties; and interest, administrative, and penalty charges on delinquent debt. All miscellaneous receipts, when collected, are returned to the U.S.
Treasury. The NRC has not presented these amounts on a Statement of Custodial Activity as the amounts involved are immaterial and incidental to the agency's operations and mission.
C. Budgets and Budgetary Accounting Budgetary accounting measures appropriation and consumption of budget spending authority or other budgetary resources and facilitates compliance with legal constraints and controls over the use of Federal funds. Under budgetary reporting principles, budgetary resources are used at the time of purchase. Assets and liabilities, which do not use current budgetary resources, are not reported, and only those liabilities for which valid obligations have been established are considered to use budgetary resources.
Congress passed the Consolidated Appropriations Act, 2023 that funded the NRCs budget at a level of $911.4 million for FY 2023. Not more than $9.5 million of the appropriation was made available for the costs of the Office of the Commission until September 30, 2024. Congress also enacted a 2-year appropriation of $15.8 million for the OIG, which is available for obligation through September 30, 2024. Total funding for the NRC including OIG funding is $927.2 million for FY 2023.
Congress passed the Consolidated Appropriations Act, 2022 that funded the NRCs budget at a level of $873.9 million for FY 2022. Congress also enacted the Additional Ukraine Supplemental Appropriations Act, 2022, which added $2.0 million to NRCs budget for FY 2022. NRCs total Salaries and Expenses appropriation for FY 2022 is
$875.9 million. Not more than $9.5 million of the appropriation was made available for the costs of the Office of the Commission until September 30, 2023. Congress also enacted a two-year appropriation of $13.8 million for the OIG, which is available for obligation through September 30, 2023. Total funding for the NRC including the supplemental and OIG funding is $889.7 million for FY 2022.
D. Basis of Accounting These financial statements reflect both accrual and budgetary accounting transactions.
Under the accrual method, revenues are recognized when earned and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash.
Budgetary accounting is also used to record the obligation of funds prior to the accrual-based transaction. SBR presents total budgetary resources available to the NRC, the status of total budgetary resources, and net outlays for the year.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 42
Chapter 2 Financial Statements and Auditors Report E. Revenues and Other Financing Sources The NRC is required to offset its appropriations by revenue received during the FY from the assessment of fees. The NRC assesses two types of fees to recover its appropriation:
- 1. Fees assessed to recover the NRCs costs of providing individually identifiable services to specific applicants and licensees under 10 CFR Part 170, Fees for Facilities, Materials, Import and Export Licenses, and Other Regulatory Services under the Atomic Energy Act of 1954, as Amended, for licensing, inspection, and other services under the authority of the Independent Offices Appropriation Act of 1952.
- 2. Annual fees assessed for nuclear facilities and materials licensees under 10 CFR Part 171, Annual Fees for Reactor Licenses and Fuel Cycle Licenses and Materials Licenses.
Licensing revenues are recognized on a straight-line basis over the licensing period.
The annual licensing period for reactor and materials fees begins October 1 and ends September 30. Annual fees for reactors are invoiced in four quarterly installments, before the end of each quarter. The NRC invoices licensees for materials annual fees in the month the license is originally issued. Fees are recorded as revenues when the services are performed.
For accounting purposes, appropriations are recognized as a financing source (appropriations used) at the time goods and services are received. Periodically during the FY, appropriations recognized are reduced by the amount of assessed fees collected during the FY to the extent of new budget authority for the year. Collections that exceed 100 percent of the NRC's appropriation, excluding amounts appropriated for any fee-relief activity as identified by the Commission, generic homeland security activities, waste incidental to reprocessing activities, Nuclear Waste Fund activities, advanced reactor regulatory infrastructure activities, Inspector General services for the Defense Nuclear Facilities Safety Board, research and development at universities in areas relevant to the NRCs mission, and a nuclear science and engineering grant program, are held to offset subsequent years appropriations. The NRC recognizes appropriated expenses over the useful life of property and equipment as reflected by depreciation and amortization expense.
F. Fund Balance with Treasury The Treasury processes the NRCs cash receipts and disbursements. The Fund Balance with Treasury is primarily appropriated funds and license fee collections that are available to pay current liabilities and to finance authorized purchase commitments. The Fund Balance with Treasury represents the NRCs right to draw on the U.S. Treasury for allowable expenditures.
G. Accounts Receivable Accounts receivable consist of amounts that other Federal agencies and the public owe to the NRC. Amounts due from the public are presented net of an allowance for uncollectible accounts. The allowance is determined based on the age of the receivable and allowance FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 43
Chapter 2 Financial Statements and Auditors Report rates established from historical experience. Receivables from Federal agencies are expected to be collected; therefore, there is no allowance for uncollectible accounts for Federal agencies. An allowance for Federal agencies is considered based on FASAB Technical Bulletin 2020-01, but the NRC deems the Federal accounts receivable to be receivable based on historical experience.
H. Non-Entity Activity Non-entity activity consist of miscellaneous fees assessed for Freedom of Information Act requests; civil penalties; and interest, administrative charges, and penalties assessed on delinquent debt due from the public. Once collected, the funds are transferred to the U.S. Treasury.
I. Property and Equipment Property and equipment consist primarily of typical office furnishings, leasehold improvements, nuclear reactor simulators, and computer hardware and software. The costs of internal use software include the full cost of salaries and benefits for agency personnel involved in software development. The NRC has no real property as the land and buildings in which the NRC operates are occupancy agreements through the GSA. The rent approximates the commercial rental rates for similar properties.
Property with a cost of $50,000 or more per unit and a useful life of 2 years or more is capitalized at cost and depreciated using the straight-line method over the useful life of the assets. Other property items are expensed when purchased. Normal repairs and maintenance are charged to expense as incurred.
J. Accounts Payable The NRC uses an estimation methodology to calculate the accounts payable balance, which represents costs for billed and unbilled goods and services received but unpaid before year-end. The NRC calculates the accounts payable amount using an average based on the historical trend of validated accruals. The estimation methodology is validated quarterly.
K. Liabilities Not Covered by Budgetary Resources Liabilities not Covered by Budgetary Resources represents the amount of future funding needed to pay the accrued unfunded expenses as of the end of the FY. These liabilities are not funded from current or prior-year appropriations and assessments, but instead they are funded from future appropriations and assessments.
Liabilities represent the number of monies or other resources that are likely to be paid by the NRC as a result of a transaction or event that has already occurred. The NRC cannot pay Liabilities without an appropriation. Liabilities for which an appropriation has not been enacted are classified as Liabilities Not Covered by Budgetary Resources" and fall into the following three categories:
- Intragovernmental. The NRC records a liability to the U.S. Department of Labor (DOL) for Federal Employees Compensation Act (FECA) benefits paid by the DOL on behalf of FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 44
Chapter 2 Financial Statements and Auditors Report the NRC. The NRC also accrued a liability to GSA for Broker Commission Credits received by the NRC and annual step rent increases on the occupancy agreements for rent of NRC office space. The NRC amortizes the liability on a straight-line basis and pays GSA over the life of the occupancy agreements.
- Federal Employee Benefits. Federal employee benefits represent the actuarial liability for estimated future FECA disability benefits. The DOL generates the future workers' compensation estimate from an application of actuarial procedures developed to estimate the liability for FECA, which includes the expected liability for death, disability, medical, and miscellaneous costs for approved compensation cases.
- Other. This category includes the amount of accrued annual leave earned by the NRC employees, but not yet taken; and contingent liabilities which have the probable likelihood of an adverse outcome.
L. Contingencies Contingent liabilities are those for which the existence or amount of the liability cannot be determined with certainty pending the outcome of future events. The uncertainty should ultimately be resolved when one or more future events occur or fail to occur.
Accounting treatment of the contingency depends on if the likely outcome is considered probable, reasonably possible, or remote.
A contingency is considered probable when the future confirming event or events are more likely than not to occur, with the exception of pending or threatened litigation and unasserted claims. This type of contingency is recorded in the financial statements as a contingent liability (included in Other Liabilities) and as an expense. It should be recorded when a past event or exchange transaction has occurred, a future outflow or other sacrifice of resources is probable, and the future outflow or sacrifice of resources is measurable.
A contingency is considered reasonably possible when the chance of the future confirming event or events occurring is more than remote but less than probable. This type of contingency is disclosed in the notes to the financial statements (Note 8) if any of the conditions for liability recognition are not met and there is at least a reasonable possibility that a loss or an additional loss may have been incurred.
A contingency is considered remote when the chance of the future event or events occurring is slight. This type of contingency is not recognized as a liability and as an expense in the financial statements, nor is it disclosed in the notes when the chance of the future event or events occurring is remote.
M. Annual, Sick, and Other Leave Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken.
Each year, the balance in the accrued annual leave liability account is adjusted to reflect current pay rates. To the extent that current or prior-year funding is not available to cover annual leave earned but not taken, funding will be obtained from future financing sources.
Sick leave and other types of non-vested leave are expensed as taken.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 45
Chapter 2 Financial Statements and Auditors Report N. Retirement Plans The NRC employees belong to either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS).
The NRC does not report on its financial statements FERS and CSRS assets, accumulated plan benefits, or unfunded liabilities, if any, applicable to its employees.
Reporting such amounts is the responsibility of the U.S. Office of Personnel Management (OPM). The portion of the current and estimated future outlays for FERS and CSRS not paid by the NRC is included in NRCs financial statements as an imputed financing source in the Statement of Changes in Net Position and as program costs on the Statement of Net Cost.
NRC employees make mandatory contributions to their federal retirement plans through payroll deductions as required by law. Employees who entered federal service before 1987 are covered under the Civil Service Retirement System (CSRS). The NRC withholds 7 percent of base pay earnings from CSRS participants, and the NRC matches this 7 percent contribution. Employees who entered federal service on and after January 1, 1987, but before January 1, 2013, are covered under the Federal Employee Retirement System (FERS). Under FERS, the NRC withholds 0.8 percent of base pay earnings and made employer contributions of 18.4 percent in 2023 and 17.3 percent in 2022 for FERS participants. In accordance with Public Law 112-96, Section 5001 of the Middle Class Tax Relief and Job Creation Act of 2012, employees who entered federal service on and after January 1, 2013 but before January 1, 2014 are covered under the Federal Employee Retirement System - Revised Annuity Employees (FERS-RAE). Under FERS-RAE, the NRC withholds 3.1 percent of base pay earnings and made employer contributions of 16.6 percent in 2023 and 15.5 percent in 2022. Employees who entered federal service on and after January 1, 2014, are covered under the Federal Employee Retirement System -
Further Revised Annuity Employees (FERS-FRAE). Under FERS-FRAE, the NRC withholds 4.4 percent of base pay earnings and made employer contributions of 16.6 percent in 2023 and 15.5 percent in 2022.
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for employees belonging to either FERS or CSRS. The maximum percentage of base pay that an employee participating in FERS or CSRS may contribute is unlimited, but it is subject to the maximum contribution of $22,500 in 2023 and $20,500 in 2022. For employees participating in FERS, the NRC automatically contributes 1 percent of base pay to the employee's account and matches contributions up to an additional 4 percent. For employees participating in CSRS, the NRC does not match the contribution. The sum of the employees and the NRCs contributions is transferred to the Federal Retirement Thrift Investment Board.
O. Leases The NRC has two types of leases: capital leases and operating leases (Note 7):
Capital leases: Capital leases are leases that transfer substantially all the benefits and risks of ownership to the lessee. Capital leases are reported in the Balance Sheet as an asset under Property and Equipment, Net and as a liability under Other Liabilities. If at its inception, a lease meets one or more of the following four criteria, the lessee should classify the lease as a capital lease:
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 46
Chapter 2 Financial Statements and Auditors Report
- 1. The lease transfers the ownership of the property to the lessee by the end of the lease term.
- 2. The lease contains an option to purchase the leased property at a bargain price.
- 3. The lease term is equal or greater than 75 percent of the estimated economic life of the leased property.
- 4. The present value of rental or other minimum lease payments, excluding that portion of the payments representing executor cost, equals or exceeds 90 percent of the fair value of the leased property.
The NRC's capital leases are for personal property consisting of reproduction equipment that is installed at the NRC Headquarters.
Operating leases: The FASAB defines an operating lease as a lease in which the Federal entity does not assume the risks of ownership of the property, plant, and equipment (PP&E). It is an agreement conveying the right to use property for a limited time in exchange for periodic rental payments.
Operating leases at the NRC consist of real property leases with the GSA. The NRC holds Occupancy Agreements with the GSA, which are not leases but are treated as leases for accounting purposes. The leases are for the NRCs Headquarters, regional offices, and Technical Training Center (TTC). The GSA charges the NRC lease rates that approximate commercial rates for comparable space.
P. Pricing Policy The NRC provides nuclear reactor and materials licensing and inspection services to the public and other Government entities. In accordance with OMB Circular A-25, Transmittal Memorandum #1, User Charges of 1993, and the Independent Offices Appropriation Act of 1952, the NRC assesses fees under 10 CFR Part 170 for licensing and inspection activities to recover the full cost of providing individually identifiable services.
The NRCs policy is to recover the full cost of goods and services provided to other Government entities where the services performed are not part of the agency's statutory mission and the NRC has not received appropriations for those services. Fees for reimbursable work are assessed at the 10 CFR Part 170 rate with minor exceptions for programs that are nominal activities of the NRC.
Q. Net Position The NRCs net position consists of unexpended appropriations and cumulative results of operations. Unexpended appropriations represent (1) appropriated spending authority that is unobligated and has not been withdrawn by the U.S. Treasury, and (2) unliquidated obligations and expenditures not yet disbursed. Cumulative results of operations represent the excess of financing sources over expenses since inception.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 47
Chapter 2 Financial Statements and Auditors Report R. Use of Management Estimates The preparation of the accompanying financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates.
S. Transfers In prior years, the NRC was a party to non-expenditure transfers of funds, as a receiving entity, from the U.S. Agency for International Development. The transfers were for the international development of nuclear safety and regulatory authorities in other countries. Transfers are legal delegations by one agency of its authority to obligate budget authority and outlay funds to another agency.
T. Statements of Net Cost The programs as presented on the Statement of Net Cost are based on the annual performance budget and are described as follows:
The Nuclear Reactor Safety program encompasses all the NRC efforts to ensure that civilian nuclear power reactor facilities and research and test reactors are licensed and operated in a manner that adequately protects public health and safety, and the environment, and protects against radiological sabotage and theft or diversion of special nuclear materials. The Nuclear Reactor Safety program consist of the following activities:
operating reactors and new reactors.
The Nuclear Materials and Waste Safety program encompasses all the NRC efforts to protect the public health and safety and the environment and ensures the secure use and management of radioactive materials. The Nuclear Materials and Waste Safety program consist of the following activities: fuel facilities, nuclear materials users, decommissioning and low-level waste, spent fuel storage and transportation, and a high-level waste repository.
For intragovernmental gross costs and revenue, the buyers and sellers are Federal entities. For earned revenues from the public, the buyers of the goods or services are non-Federal entities.
U. Classified Activities Accounting standards require all reporting entities to disclose that accounting standards allow certain presentations and disclosures to be modified, if needed, to prevent the disclosure of classified information.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 48
Chapter 2 Financial Statements and Auditors Report Note 2 - Fund Balance with Treasury As of September 30, 2023 2022 Status of Fund Balance with Treasury Unobligated balance Available - Appropriated funds $ 109,673 $ 102,872 Unavailable Unapportioned, unexpired accounts 9,922 301 Expired accounts 1,931 1,888 Obligated balance not yet disbursed 291,099 279,183 Total $ 412,625 $ 384,244 The Fund Balance with Treasury consists of the unobligated and obligated budgetary account balances, including NWF activity. The NWF unobligated balance was $0.2 million as of September 30, 2023, and $0.3 million as of September 30, 2022.
Other fund types in the Fund Balance with Treasury represent license fee collections used to offset the NRC current-year budget authority, miscellaneous collections, and adjustments that will offset revenue in the following FY.
Note 3 - Accounts Receivable As of September 30, 2023 2022 2020 Intragovernmental Fee receivables and reimbursements $ 4,982 $ 4,482 Receivables with the Public Materials and facilities fees-billed $ 2,953 $ 4,725 Materials and facilities fees-unbilled 53,595 48,849 Other 3,811 2,054 Total Receivables with the Public 60,359 55,628 Less: Allowance for uncollectible accounts (2,405) (1,967)
Total Receivables with the Public, Net $ 57,954 $ 53,661 Total Accounts Receivable $ 65,341 $ 60,110 Less: Allowance for uncollectible accounts (2,405) (1,967)
Total Accounts Receivable, Net $ 62,936 $ 58,143 Refer to Note 1G, Summary of Significant Accounting Policies, Accounts Receivable for more information.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 49
Chapter 2 Financial Statements and Auditors Report Note 4 - Property and Equipment, Net As of September 30, 2023 Accumulated Fixed Assets Class Service Acquisition Depreciation Net Book Years Value and Value Amortization Equipment 5 $ 15,343 $ (12,310) $ 3,033 Leased equipment 5 463 (463) -
IT software 5 62,955 (62,033) 923 IT software under development - 191 - 191 Leasehold improvements Life of 58,846 (37,475) 21,371 related lease Leasehold improvements in progress
- 4,169 - 4,169 Total $ 141,967 $ (112,281) $ 29,687 As of September 30, 2022 Accumulated Fixed Assets Class Service Acquisition Depreciation Net Book Years Value and Value Amortization Equipment 5 $ 14,549 $ (11,301) $ 3,248 Leased equipment 5 463 (463) -
IT software 5 62,607 (60,524) 2,082 IT software under development - 239 - 239 Leasehold improvements Life of 57,575 (34,257) 23,318 related lease Leasehold improvements in progress
- 3,408 - 3,408 Total $ 138,841 $ (106,545) 32,295 For the years ended September 30, 2023 2022 Balance beginning of year $ 32,295 $ 37,106 Capitalized acquisitions 10,899 7,150 Disposals (5,788) (2,753)
Depreciation & Amortization expense (7,480) (9,208)
Revaluations - -
Other (239) -
Balance at end of fiscal year $ 29,687 $ 32,295 In accordance with Statement of Federal Financial Accounting Standards (SFFAS) No. 44, "Accounting for Impairment of General Property, Plant, and Equipment Remaining in Use,"
the NRC repairs or replaces capital assets as required and does not recognize impairment losses. Refer to Note 1I, Summary of Significant Accounting Policies, Property and Equipment for more information.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 50
Chapter 2 Financial Statements and Auditors Report Note 5 - Other Liabilities As of September 30, 2023 2022 Intragovernmental Liability to the U.S. Treasury General Fund for misc. receipts $ 120 $ 360 Liability for advances from other agencies 18 17 Accrued workers' compensation 751 822 Accrued unemployment compensation 8 -
Employee benefit contributions 2,556 2,413 Other liabilities 4,592 5,551 Total Intragovernmental Other Liabilities $ 8,045 $ 9,163 With the Public Accrued salaries and benefits $ 8,019 $ 7,580 Contract holdbacks, advances, capital lease liability, and other 4,156 1,819 Contingent Liabilities 250 250 Grants Payable 9,054 7,526 Total With the Public Other Liabilities $ 21,479 $ 17,175 Total Intragovernmental and With the Public Other Liabilities $ 29,524 $ 26,338 Other Liabilities represents the accrual of broker commission credits (BCC) received by the NRC and the sum of annual step rent increases paid to GSA for rent of NRC office space. The credits received by the NRC and the step rent increases are amortized on a straight-line basis over the life of the occupancy agreements.
Other liabilities are current except for the $4.6 million accrual for BCC and annual step rent increases on the existing occupancy agreements with GSA.
Note 6 - Liabilities Not Covered by Budgetary Resources As of September 30, 2023 2022 Intragovernmental FECA paid by DOL $ 751 $ 822 Accrued unemployment compensation 8 -
Federal Employee Benefits Future FECA 3,058 3,552 Employer Contributions & Payroll Taxes Payable 377 351 Accrued annual leave 48,891 46,593 Other Contingent Liabilities 250 250 Other Liabilities 4,592 5,551 Total Liabilities Not Covered by Budgetary Resources 57,927 57,119 Total Liabilities Covered by Budgetary Resources 50,543 51,391 Total Liabilities $ 108,470 $ 108,510 Liabilities not Covered by Budgetary Resources represents the amount of future funding needed to pay the accrued unfunded expenses as of September 30, 2023, and 2022. These liabilities are not funded from current or prior-year appropriations and assessments, but rather they FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 51
Chapter 2 Financial Statements and Auditors Report should be funded from future appropriations and assessments. Accordingly, future funding requirements have been recognized for the expenses that will be paid from future appropriations.
The projected annual benefit payments for FECA are discounted to present value. For FY 2023, projected annual payments were discounted to present value based on the OMBs interest rate assumptions, which were interpolated to reflect the average duration in years for income payments and medical payments. The interest rate assumptions used for FY 2023 discounting were 2.3 percent in year 1 and year 2 for wage benefits, and 2.1 percent in year 1 and year 2 for medical benefits.
Note 7 - Leases As of September 30, 2023 2022 Assets Under Capital Leases:
Copiers and booklet maker $ 463 $ 463 Accumulated amortization (463) (463)
Net Assets Under Capital Leases $ - $ -
Future Lease Payments Due:
As of September 30, 2023 Fiscal Year Capital Operating Operating Non- Cancellable cancellable 2024 - 9,711 19,622 29,333 2025 - 9,759 16,387 26,146 2026 - 9,809 15,115 24,924 2027 - 9,236 15,025 24,261 2028 - 2,706 11,885 14,591 2029 and thereafter - 7,140 57,044 64,184 Total Lease Liability - 48,361 135,078 183,439 Subtract: Imputed Interest - - - -
Total Future Lease Payments $ - $ 48,361 $ 135,078 $ 183,439 As of September 30, 2022 Fiscal Year Capital Operating Operating Non- Cancellable cancellable 2023 - $ 9,201 $ 22,497 $ 31,698 2024 - 9,324 21,910 31,234 2025 - 9,371 19,104 28,475 2026 - 9,419 17,977 27,396 2027 - 9,511 17,211 26,722 2028 and thereafter - 5,430 95,935 $ 101,365 Total Lease Liability - 52,256 194,634 246,890 Subtract: Imputed Interest - - - -
Total Future Lease Payments - $ 52,256 $ 194,634 $ 246,890 FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 52
Chapter 2 Financial Statements and Auditors Report For Future Lease Payments, the NRC calculated the Capital Lease Liability as of September 30, 2023, and subtracted the imputed interest to arrive at the Total Future Lease Payments. The reproduction equipment is generally depreciated over 5 years using the straight-line method with no salvage value.
The NRC does not own or lease any real property. The land and buildings the NRC occupies and operates are leased by or owned by the General Services Administration (GSA) and are occupied via Occupancy Agreements (OA's) between the GSA and the NRC. The NRC Headquarters complex consists of three office buildings and a warehouse located in Rockville, MD. One of the headquarters office buildings (Three White Flint North) is jointly occupied with the U.S. Food and Drug Administration (FDA) and the National Institutes of Health (NIH), and another building, Two White Flint North is jointly occupied by NIH. The NRC has four regional offices that are located in King of Prussia, PA, Atlanta, GA, Lisle, IL, and Arlington, TX. In addition, the NRC operates and occupies a Technical Training Center (TTC) located in Chattanooga, TN. Table 5 summarizes the lease arrangements.
Table 5 Occupied Property List Lease Cancellable vs. Lease End Occupied Property List Begin Non-cancellable Date Date Headquarters - One White Flint Cancellable 03/01/2018 02/29/2028 Headquarters - Two White Flint Cancellable 01/01/2023 12/14/2033 Headquarters - Three White Flint Non-cancellable 10/01/2020 11/02/2027 Headquarters - Lot 4 Non-cancellable 11/12/2018 11/11/2028 Headquarters - Warehouse Cancellable 12/01/2020 12/14/2036 Region I: Allendale Rd, King of Prussia, PA Non-cancellable 08/1/2022 04/30/2032 Region II: Atlanta, GA Non-cancellable 12/01/2009 10/31/2022 Cancellable 11/01/2022 11/30/2024 Region III: Lisle, IL Cancellable 09/01/2022 06/30/2024 Region III: Naperville, IL Cancellable 08/01/2022 07/31/2037 Region IV: Arlington, TX Cancellable 08/01/2021 04/05/2026 TTC: Chattanooga, TN Non-cancellable 10/17/2016 10/16/2026 Cancellable 10/17/2026 10/16/2036 FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 53
Chapter 2 Financial Statements and Auditors Report In the Three White Flint North (3WFN) office building, the NRC occupies 24,889 usable square feet and the NRC is no longer the primary tenant. The NRC occupies the Data center (half of fourth floor) and the Operations center (floor B1). The FDA and NIH occupy the other floors and have backfilled all of the space released by NRC in 3WFN, however, due to the terms of the occupancy agreement between GSA and NRC, NRC pays the delta between what the backfill tenant pays, and the true rental costs which currently equates to approximately $5.1 million per year for the space occupied by FDA and NIH and approximately $1.5 million per year for the space occupied by NRC. NRC plans to vacate 3WFN entirely by moving the agency's remaining operations in 3WFN to OWFN by the lease expiration in November 2027. Therefore, NRC's annual rent and related costs are anticipated to reduce by $6.6 million beginning in FY 2028.
In the Two White Flint North (2WFN) office building, the NRC occupies 207,144 usable square feet, 515 structured parking spaces, and 14 surface parking spaces. In FY 2021, NRC released the tenth floor of 2WFN which was subsequently backfilled by NIH. The lease bill for 2WFN will be approximately $0.9 million less per year (not including the repayment of unearned rent abatement and broker commission credits of approximately $0.6 million repaid the first year). NRC released two additional floors (floors 8 & 9) effective in January 2023 which will reduce the lease bill by approximately $1.8 million (not including the repayment of unearned rent abatement and broker commission credits of approximately $1.0 million to be repaid over the first two years).
In FY 2021, the NRC signed a 10-year lease for the relocation of the Region I office for roughly half the size of the previous location. The NRC occupies 32,539 useable square feet. The new lease for Region I is approximately $1.9 million dollars less per year than the previous location.
The NRC leases for land and buildings do not have renewal options or contingent rental restrictions. The overall lease costs remain flat due to the elimination of the tenant improvement costs and lease escalations in some leases (e.g., TWFN AND 3WFN). No additional escalations are scheduled over the terms of the remainder of the Regional leases. The current leases for Regions 2, 3, and 4 expire in FY 2025, FY 2024, and FY 2026 respectively. We have a new lease for Region 3. An extension was signed for the existing location that expires 6/30/2024. Occupancy of the new location is not expected until FY 2024 and this lease period will be for 15 years with an expiration of 7/31/2037. Pending funding, GSA and NRC plan to solicit and negotiate new leases for each Region prior to the lease expirations listed above, for roughly half the current size of each location by incorporating a more contemporary design. By reducing the size of each Region by roughly half, the agency anticipates the regional rent and related costs to reduce by roughly half once the new leases are occupied. The lease for the headquarters warehouse has been executed and the lease expires in FY 2036.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 54
Chapter 2 Financial Statements and Auditors Report Note 8 - Contingencies The NRC is subject to potential liabilities in various administrative proceedings, legal actions, environmental suits, and claims brought against it. In the opinion of the NRC's management and legal counsel, the ultimate resolution of these proceedings, actions, suits, and claims will not materially affect the financial position or net costs of the NRC.
Probable Likelihood of an Adverse Outcome:
As of September 30, 2023, the NRC was involved in a case with the likelihood of an adverse outcome being probable. The NRC accrued a legal contingency of $250 thousand. The estimated range of loss is $250 thousand on the lower end to $350 thousand on the upper end. As of September 30, 2022, the NRC was involved in a case with the likelihood of an adverse outcome being probable. The NRC accrued a legal contingency of $250 thousand. The estimated range of loss is $250 thousand on the lower end to $350 thousand on the upper end.
Reasonably Possible Likelihood of an Adverse Outcome:
As of September 30, 2023, the NRC was involved in four reasonably possible cases that have an undetermined amount of potential loss. As of September 30, 2022, the NRC was involved in six reasonably possible cases that have an undetermined amount of potential loss.
Note 9 - Suborganization Program Costs For the fiscal years ended September 30, 2023 2022 Nuclear Reactor Safety:
Intragovernmental gross costs $ 202,076 $ 200,888 Less: Intragovernmental earned revenue (53,260) (48,412)
Intragovernmental net costs 148,816 152,476 Other than intragovernmental gross costs 533,609 498,240 Less: Other than intragovernmental earned revenues (655,088) (622,495)
Other than intragovernmental net costs (121,479) (124,255)
$ 27,337 $ 28,221 Total Net Cost of Nuclear Reactor Safety Nuclear Materials and Waste Safety:
Intragovernmental gross costs $ 59,255 $ 57,196 Less: Intragovernmental earned revenue (6,400) (4,931)
Intragovernmental net costs 52,855 52,265 Other than intragovernmental gross costs 146,741 139,377 Less: Other than intragovernmental earned revenues (68,334) (61,425)
Other than intragovernmental net costs 78,407 77,952 Total Net Cost of Nuclear Materials and Waste Safety $ 131,262 $ 130,217 Nuclear Reactor Safety and Nuclear Materials and Waste Safety represent the NRC's two major programs as identified in the NRC Strategic Plan.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 55
Chapter 2 Financial Statements and Auditors Report Note 10 - Exchange Revenues For the periods ended September 30, 2023 2022 Fees for licensing, inspection, and other services $ 776,425 $ 732,223 Revenue from reimbursable work 6,657 5,040 Total Exchange Revenues $ 783,082 $ 737,263 Earned revenues or exchange revenues arise when an entity provides goods and services to the public or another Government entity for a price. The NRCs revenues are primarily recorded at full cost for services provided for inspections, fees for licensing, and reimbursable work.
Note 11 - Financing Sources Other Than Exchange Revenue For the periods ended September 30, 2023 2022 Appropriations Used Collections are used to reduce the fiscal year's appropriations:
Funds consumed $ 894,857 $ 865,304 Less: Collection of fees assessed (773,781) (739,081)
Less: Nuclear Waste Fund Expense (62) (39)
$ 121,014 $ 126,184 Total Appropriations Used Funds consumed include $96.8 million and $66.5 million through September 30, 2023, and 2022, respectively, of available funds from prior years. Current year funds consumed were $798 million and $798.8 million through September 30, 2023, and 2022 respectively.
For the fiscal years ended September 30, 2023 2022 Non-Exchange Revenue Civil penalties $ 264 $ 621 Miscellaneous receipts (504) (412)
NonExchange Revenue (240) 209 Contra-Revenue 240 (209)
Total NonExchange Revenue, Net of Funds Returned to the U.S. Treasury $ - $ -
For the periods ended September 30, 2023 2022 Imputed Financing Civil Service Retirement System $ 2,173 $ 2,164 Federal Employees Retirement System 12,349 1,454 Federal Employee Health Benefit 22,432 20,454 Federal Employee Group Life Insurance 81 77 Judgments/Awards 110 -
Total Imputed Financing $ 37,145 $ 24,149 FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 56
Chapter 2 Financial Statements and Auditors Report Note 12 - Status of Budgetary Resources A. Net Adjustments to Unobligated Balance, Brought Forward, October 1 This budgetary resources line consists of unobligated balance, brought forward as of October 1, as increased or decreased by current fiscal year activity related to the unobligated balance brought forwardtypical items include recoveries of prior year unpaid obligations, cancellations of multi-year appropriations, and other changes including refunds collected for downward adjustments of prior year paid obligations, and remaining anticipated recoveries. The adjustments for FY 2023 and FY 2022 are described below.
For the years ended September 30, 2023 2022 Unobligated balance, Brought Forward, October 1 $ 105,061 $ 77,079 Actual Recoveries of Prior Year Unpaid Obligations $ 28,810 $ 23,442 Canceled Authority $ (628) $ (902)
Other Changes in Unobligated Balance, Net $ 681 $ 1,027 Unobligated Balance from Prior Year Budget Authority, net $ 133,924 $ 100,646 B. Explanation of Differences between the Statement of Budgetary Resources and the Budget of the U.S. Government SFFAS 7, Accounting for Revenue and Other Financing Sources and OMB Circular A-136 require the NRC to reconcile the budgetary resources reported on the SBR to the actual budgetary resources presented in the Presidents Budget and explain any material differences.
The NRC does not have any material differences between the budgetary resources reported on the SBR for FY 2022 and the FY 2022 actuals in the proposed President's Budget for FY 2024. The reconciliation was based on actual numbers for FY 2022 because the Budget of the United States (also known as the Presidents Budget) was not published at the time that these financial statements were issued.
The NRC reconciled the amounts of the FY 2022 column on the Combined Statement of Budgetary Resources to the actual amounts for FY 2022 from the Appendix in the FY 2024 Presidents Budget for budgetary resources, new obligations and upward adjustments, distributed offsetting receipts, and net outlays.
Budgetary New Obligations & Distributed Outlays (Net)
For the fiscal year ended September 30, 2022 Resources Upward Offsetting Adjustments Receipts Combined Statement of Budgetary Resources $ 995,743 $ 890,682 $ (739,081) $ 881,353 Spending authority from offsetting collections $ (5,397) - - -
Unobligated balance beginning of period $ (100,646) - - -
Budget of the U.S Government $ 889,700 $ 890,682 $ (739,081) $ 881,353 The FY 2023 actual budgetary resources numbers will be available in the FY 2025 Presidents Budget which is expected to be published in 2024, and will be available on the OMB Web site https://www.whitehouse.gov/omb/ and through the U.S. Government Publishing Office.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 57
Chapter 2 Financial Statements and Auditors Report Note 13 - Reconciliation of Net Costs and Net Outlays For the fiscal year ended September 30, 2023 Intragovernmental Other than Total Intragovernmental Net Cost $ 201,671 $ (43,072) $ 158,599 Components of the Net Cost That Are Not Part of Net Outlays Property, plant, and equipment depreciation - (7,480) (7,480)
Property, plant, and equipment disposal & - (5,788) (5,788) revaluation Increase/(decrease) in assets:
Accounts receivable, net 5,247 (453) 4,794 Other assets 686 (3) 683 (Increase)/decrease in liabilities:
Accounts payable 6,246 (1,190) 5,056 Salaries and benefits - 494 494 Other liabilities 877 (6,627) (5,750)
Other Financing sources:
Federal employee retirement benefit costs paid by -
(37,145) (37,145)
OPM and imputed to the agency Total Components of Net Cost That Are Not Part of Net Outlays $ (24,089) $ (21,047) $ (45,136)
Components of Net Outlays That Are Not Part of Net Cost Acquisition of capital assets - 10,899 10,899 Total Components of Net Outlays That Are Not Part
- 10,899 10,899 of Net Cost Misc. Items:
Distributed offsetting receipts (773,781) - (773,781)
Custodial/Non-exchange revenue - 240 240 Non-Entity Activity (236) - (236)
Appropriated Receipts for Trust/Special Funds 773,781 - 773,781 Other Reconciling Items (3) - (3)
Total Other Reconciling Items (239) 240 1 Net Outlays $ 177,343 $ (52,980) $ 124,363 FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 58
Chapter 2 Financial Statements and Auditors Report Note 14 - Financial Statements to Reclassified Financial Statements To prepare the Financial Report of the U.S. Government (Financial Report), the Department of the Treasury requires agencies to submit an adjusted trial balance, which is a listing of amounts by U.S. Standard General Ledger account that appear in the financial statements. Treasury uses the trial balance information reported in the Government-wide Treasury Account Symbol Adjusted Trial Balance System (GTAS) to develop a Reclassified Statement of Net Cost and a Reclassified Statement of Changes in Net Position for each agency, which are accessed using GTAS. Treasury eliminates all intragovernmental balances from the reclassified statements and aggregates lines with the same title to develop the Financial Report statements. This note shows the NRCs financial statements and the NRC's reclassified statements prior to elimination of intragovernmental balances and prior to aggregation of repeated Financial Report line items. A copy of the 2022 Financial Report can be found here: Bureau of the Fiscal Service - Reports, Statements & Publications (treasury.gov) and a copy of the 2023 Financial Report will be posted to this site as soon as it is released.
The term intragovernmental is used in this note to refer to amounts that result from other components of the Federal Government.
The term non-Federal is used in this note to refer to Federal Government amounts that result from transactions with non-Federal entities. These include transactions with individuals, businesses, non-profit entities, and State, local, and foreign governments.
Statement of Net Cost to Reclassified Statement of Net Cost For the period ended September 30, 2023 NRC SNC Line Items Used to Prepare the Government-wide SNC Financial Statement Line Amount Total Reclassified Financial Statement (Consolidated) Line Non-Federal Costs
$ 680,237 Non-Federal Gross Cost 680,237 Total Non-Federal Costs Intragovernmental Costs 102,299 Benefit Program Costs Gross Costs $ 941,681 37,146 Imputed Costs 92,952 Buy/Sell Costs 29,047 Other Expenses (w/o Reciprocals) 261,444 Total Intragovernmental Costs Total Gross Costs 941,681 941,681 Total Reclassified Gross Costs 723,422 Non-Federal Earned Revenue Intragovernmental Revenue Earned Revenue 783,082 59,660 Buy/Sell Revenue 59,660 Total Intragovernmental Earned Revenue Total Earned Revenue 783,082 783,082 Total Reclassified Earned Revenue Net Cost $ 158,599 $ 158,599 Net Cost FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 59
Chapter 2 Financial Statements and Auditors Report Statement of Changes in Net Position to Reclassified Statement of Changes in Net Position For the period ended September 30, 2023 Line Items Used to Prepare the Government-wide FY 2023 NRC SCNP SCNP Financial Statement Line Amount Total Reclassified Financial Statement Line Unexpended Appropriations Unexpended Appropriations, $ 328,773 $ 328,786 Unexpended Appropriations, Beginning Balance Beginning Balance Appropriations Received 152,743 152,744 Appropriations Received Appropriations Used (121,014)
(121,028) Appropriations Used Total Unexpended
$ 360,502 $ 360,502 Total Unexpended Appropriations Appropriations Cumulative Results of Operations Cumulative Results, Beginning $ 41,725 $ 41,711 Cumulative Results, Beginning Balance Balance as adjusted Non-Federal Non-Exchange Revenues Non-Exchange Revenues (240) (240) Miscellaneous Taxes and Receipts (240) Total Non-Federal Non-Exchange Revenues Total Non-Exchange Revenues (240) (240) Total Non-Exchange Revenues 236 Other 240 Other 4
Total Other 240 240 Total Other Imputed Financing 37,145 37,145 Imputed Financing Sources Net Cost of Operations (158,599) (158,599) Net Cost of Operations Ending Balance - Cumulative 41,285 41,711 Cumulative Results of Operations Results of Operations Total Net Position $ 401,787 $ 401,787 Net Position NRC does not have funds from dedicated collections.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 60
Chapter 2 Financial Statements and Auditors Report Note 15 - Nuclear Waste Fund For FY 2023 and FY 2022, the NRCs budget did not include funds from the Nuclear Waste Fund (NWF). The funding provided to the NRC before FY 2014 and carried forward to subsequent years was for the purpose of performing activities associated with the DOE's application for a high-level waste repository at Yucca Mountain, NV.
The SFFAS 43 "Funds from Dedicated Collections: Amending Statement of Federal Financial Accounting Standards 27, Identifying and Reporting Earmarked Funds,"
lists three defining criteria for funds from dedicated collections.
- 1. A statute committing the Federal government to use specifically identified revenues and/or other financing sources that are originally provided to the Federal government by non-federal sources only for designated activities, benefits or purposes;
- 2. Explicit authority for the fund to retain revenues and/or other financing sources not used in the current period for future use to finance the designated activities, benefits, or purposes; and
- 3. A requirement to account for and report on the receipt, use, and retention of the revenues and/or other financing sources that distinguishes the fund from the Federal governments general revenues.
In 1982, Congress passed the Nuclear Waste Policy Act of 1982 (Public Law 97-425) establishing the NWF to be administered by the DOE (42 U.S.C. 10222). For the NRC, the NWF transfer is a source of financing from other than non-Federal sources.
The NRC collects no revenue on behalf of the NWF and has no administrative control over it. Furthermore, the Treasury has no separate fund symbol for the NWF under the NRCs agency location code. The receipt and expenditure of NWF funding is reported to the U.S. Treasury under the NRCs primary Salaries and Expenses Treasury Account Symbol (X0200).
As a result, the NWF is not a fund from dedicated collections from the NRC's perspective. However, to provide additional information to the users of these financial statements, the summary below presents enhanced disclosure of the fund.
For the periods ended September 30, 2023 2022 Appropriations Received from NWF $ - $ -
Expended Appropriations $ 60 $ 39 Obligations Incurred $ 64 $ 19 Unobligated Balances (includes recoveries of prior year $ 219 $ 281 obligations)
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 61
Chapter 2 Financial Statements and Auditors Report Required Supplementary Information Deferred Maintenance and Repairs for General Property, Plant, and Equipment Information on deferred maintenance and repairs (DM&R) is required under SFFAS 42, "Deferred Maintenance and Repairs: Amending Statements of Federal Financial Accounting Standards 6, 14, 29, and 32."
SFFAS 42 defines DM&R as maintenance and repairs that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period."
Maintenance and repairs (M&R) are defined as activities directed toward keeping fixed assets in an acceptable condition. Activities include preventive maintenance, replacement of parts, systems, or components; and other activities needed to preserve or maintain the asset. M&R, as distinguished from capital improvements, excludes activities directed towards expanding the capacity of an asset or otherwise upgrading it to serve needs different from, or significantly greater than, its current use.
DM&R should include funded and unfunded M&R activities that have been delayed to a future period. DM&R on inactive or excess general property plant and equipment should be included to the extent that it is required to maintain those items in acceptable condition. The NRC evaluated DM&R activities for leased facilities, the multiple components of the agency information technology (IT) infrastructure, and individual capital asset purchases with a cost equal to or greater than $50,000. The NRC did not include noncapitalized PP&E with a cost of less than $50,000, which are deemed immaterial.
Deferred Maintenance and Repairs for the NRC Facilities, Other Structures, and Capital Equipment For the NRC leased facilities and capital equipment purchases, the NRC typically does not have any DM&R. The NRC had no DM&R for facilities, other structures, and capital equipment as of September 30, 2023, and 2022.
Defining and Implementing Maintenance and Repair Policies in Practice For the NRC Headquarters facilities, the agency uses the GSA guidelines for maintenance activities along with industry best practices to determine the preventive maintenance activities to perform and the schedule for those activities. For the building structures and systems, the maintenance contractor performs all required periodic maintenance to keep the systems and buildings in a good state of repair. The contractor is held to a 98 percent scheduled completion rate, with all the preventive maintenance completed within a reasonable time. When equipment reaches the end of its useful life, it is generally replaced with like-kind or upgraded equipment.
For any type of an emergent failure to facilities, the NRC would request additional funding, as needed, for repairs or replacement to structures and equipment.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 62
Chapter 2 Financial Statements and Auditors Report For the regional offices, the building management (lessor) is responsible for performing all required periodic maintenance to keep the systems and buildings in a good state of repair.
Generally, the regional leases contain the fixed assets, including equipment purchased to support the operations of the agency's leased space, such as diesel generators and chillers for the Incident Response Center, the local area network, and power cooling. Equipment requiring repair results in a service repair call. For those instances where equipment is purchased to support the NRC regional operations, maintenance contracts are put in place to provide periodic service and maintenance on the equipment. When equipment reaches the end of its useful life, it is generally replaced with like-kind or with upgraded equipment. For any type of an emergent failure, the NRC would request additional funding, as needed, for repairs or replacement of equipment.
The TTC facility and associated systems are leased and maintained by the lessor. This includes any emergent repairs that may occur, as well as any scheduled maintenance. Assets within the TTC are predominantly maintained by facilities personnel or in some cases, such as for simulator systems, contractor personnel perform all required emergent and periodic maintenance to keep the simulator systems in a good state of repair. When equipment reaches the end of its useful life, it is replaced with like-kind or upgraded equipment.
Ranking and Prioritization of Maintenance and Repair Activities Personnel safety is a top priority at the NRC leased facilities. Maintenance activity, such as for fire alarms and emergency exits, is given top priority. If a preventive maintenance activity must be deferred, which is typically only for 2 to 4 weeks, the impact to personnel safety and building functionality is considered during the maintenance review. Other M&R activities are executed as required so that there is no disruption to the NRC operations and the TTC training schedules.
Factors Considered in Determining Acceptable Condition The NRC's Facilities Management Branch at the headquarters facilities perform the daily inspections and maintenance of the buildings and major systems. The NRC internally reviews planned maintenance activity records and historical logs of M&R to monitor condition information for equipment. Based on the information gathered, the NRC will determine whether planning for replacement or upgrade is needed. Additionally, the GSA conducts onsite inspections every 3 to 5 years at the headquarters facilities to assess the overall condition of the buildings and to determine when major systems and components need to be scheduled for replacement. For the TTC and regional offices, the NRC has a Facilities Management staff person onsite to work with the GSA to manage the buildings with support from the lessors. As a result, the GSA performs more frequent onsite inspections of the facilities. The NRC works in close coordination with the GSA to ensure that M&R activities are performed on a timely basis for all NRC-occupied facilities.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 63
Chapter 2 Financial Statements and Auditors Report Deferred Maintenance and Repairs for Information Technology Infrastructure and Systems The NRC had no DM&R for IT Infrastructure and Systems as of September 30, 2023, and 2022.
The NRC IT infrastructure is a network of multiple equipment, software, and service components, taken as a whole, which provides the critical communication network that allows the NRC to accomplish its mission. The NRC IT infrastructure encompasses the following:
- End-user systems and support and end-user hardware includes desktop, laptop, and handheld devices; peripherals (local printers, shared printers); software (personal computer operating systems, office automation suites, messaging, and groupware), and hardware and software for help desks. Also included are network operations command centers, wire closets, and cable management. For regional offices, this includes regional end-user support similar to that provided by the Customer Support Center at the NRC Headquarters, which includes contract support and Federal full-time equivalent (FTE).
- Telecommunications services includes data networks and telecommunications (including wireless, multimedia, and local and long-distance telephone); hardware and software operations; licenses; maintenance; and backup, continuity of operations, and disaster recovery. For regional offices, this includes local telecommunications, which includes contract support and Federal FTE.
- Production operations include mainframes and servers (including Web hosting, but not Web content development and management); hardware and software operations; licenses; maintenance; and backup, continuity of operations, and disaster recovery.
Also included resources related to carrying out Homeland Security Presidential Directive-12, which requires all Federal Executive departments and agencies to implement a Government-wide standard for secure and reliable forms of identification for access to Federal facilities and information systems.
The NRC relies on the asset project and program managers to execute the maintenance budget and to establish and modify the M&R schedule as needed. Ranking factors that may impact the M&R schedule include personnel safety, age of the asset, scheduled replacement date, budget constraints, and unforeseen or unexpected events.
Additionally, for IT systems, whether computer-off-the-shelf or internally developed software, the NRC relies on the project and program managers to establish a M&R budget and schedule.
Minor repairs, enhancements, and upgrades are completed internally through the regular M&R operations process. For major upgrades and replacement systems, the project manager must submit a request to perform the work to the appropriate IT governance boards for their approval.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 64
Chapter 2 Financial Statements and Auditors Report Defining and Implementing Maintenance and Repair Policies in Practice All of the NRC IT infrastructure M&R activities are performed under various contracts which includes leasing of servers, computers, printers, and software and provides provisions for periodic monitoring, maintenance, and repairs. Replacement of miscellaneous equipment components and software is scheduled as needed when the equipment reaches the end of its useful life and before the equipment and software become obsolete. Desktops and laptops are upgraded on a 3-year rolling schedule so that they do not become obsolete.
Ranking and Prioritization of Maintenance and Repair Activities The NRC program managers determine the requirements for ranking, scheduling, and performing IT infrastructure M&R activities and include them in the contractor statement of work.
For the critical IT infrastructure and support services (ITISS) contract, the main ranking factor is the age of the asset (e.g., desktop, laptop, printer), followed by cost and budget constraints.
However, when applicable, personnel safety is considered and is the highest priority.
Factors Considered in Determining Acceptable Condition In determining acceptable condition, the NRC mainly considers the assets age, remaining useful life, and compatibility with current and required software.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 65
Chapter 2 Financial Statements and Auditors Report Combined Statement of Budgetary Resources (In Thousands)
Office of the Salaries and Inspector Nuclear For the fiscal year ended September 30, 2023 Expenses Facility Fees Total General Budgetary Resources:
Unobligated balance from prior-year budget authority, net $ 128,715 $ 5,209 $ - $ 133,924 (Note12)
Appropriations 911,384 15,769 - 927,153 Spending authority from offsetting collections 7,224 - - 7,224 Total Budgetary Resources $ 1,047,323 $ 20,978 $ - $ 1,068,301 Memorandum Entries:
Net adjustments to unobligated balance brought forward, Oct 1 $ 18,830 $ 257 - $ 19,087 Status of Budgetary Resources:
New obligations and upward adjustments (total) $ 933,494 $ 13,281 $ - $ 946,775 Unobligated balance, end of period:
Apportioned, unexpired accounts 104,492 4,962 - 109,454 Exempt from apportionment, unexpired accounts 219 - - 219 Unapportioned, unexpired accounts 9,000 922 - 9,922 Unexpired unobligated balance, end of year 113,711 5,884 - 119,595 Expired unobligated balance, end of year 118 1,813 - 1,931 Unobligated balance, end of year 113,829 7,697 - 121,526 Total Status of Budgetary Resources $ 1,047,323 $ 20,978 $ - $ 1,068,301 Outlays Net and Disbursements Net:
Outlays Net and Disbursements Net 885,131 13,013 - 898,144 Distributed offsetting receipts - - (773,781) (773,781)
Agency Outlays, Net $ 885,131 $ 13,013 $ (773,781) $ 124,363 Office of the Salaries and Inspector Nuclear For the fiscal year ended September 30, 2022 Expenses Facility Fees Total General Budgetary Resources:
Unobligated balance from prior-year budget authority, net $ 95,506 $ 5,141 $ - $ 100,646 Appropriations 875,901 13,799 - 889,700 Spending authority from offsetting collections 5,227 169 - 5,397 Total Budgetary Resources $ 976,634 $ 19,109 $ - $ 995,743 Memorandum Entries:
Net adjustments to unobligated balance brought forward, Oct 1 $ 24,055 $ 414 - $ 24,469 Status of Budgetary Resources:
New obligations and upward adjustments (total) $ 876,899 $ 13,783 $ - $ 890,682 Unobligated balance, end of period:
Apportioned, unexpired accounts 99,363 3,228 - 102,591 Exempt from apportionment, unexpired accounts 281 - - 281 Unapportioned, unexpired accounts - 301 - 301 Unexpired unobligated balance, end of year 99,644 3,529 - 103,173 Expired unobligated balance, end of year 92 1,796 - 1,888 Unobligated balance, end of year (total) 99,736 5,325 - 105,061 Total Status of Budgetary Resources $ 976,635 $ 19,108 $ - $ 995,743 Outlays Net and Disbursements Net:
Outlays Net and Disbursements Net 867,577 13,776 - 881,353 Distributed offsetting receipts - - (739,081) (739,081)
Agency Outlays, Net $ 867,577 $ 13,776 $ (739,081) $ 142,272 FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 66
Chapter 2 Financial Statements and Auditors Report Inspector Generals Letter Transmitting Independent Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 67
Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 68
Chapter 2 Financial Statements and Auditors Report Independent Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 69
Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 70
Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 71
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Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 73
Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 74
Chapter 2 Financial Statements and Auditors Report Managements Response to the Independent Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 75
Chapter 2 Financial Statements and Auditors Report FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 76
Chapter 3: Other Information 77
Chapter 3 Other Information Inspector Generals Assessment of the Most Serious Management and Performance Challenges Facing the NRC FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 78
Chapter 3 Other Information FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 79
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Chapter 3 Other Information Summary of Financial Statement Audit and Management Assurances Summary of Financial Statement Audit for FY 2023 Audit Opinion Unmodified Restatement No Beginning Ending Material Weaknesses Balance New Resolved Consolidated Balance Management Controls over Financial 0 0 0 0 0 Reporting Total Material Weaknesses 0 0 0 0 0 Summary of Management Assurances for FY 2023 Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)
Statement of Assurance Unmodified Beginning Ending Material Weaknesses New Resolved Consolidated Reassessed Balance Balance None 0 0 0 0 0 0 Total Material Weaknesses 0 0 0 0 0 0 Effectiveness of Internal Control over Operations (FMFIA § 2)
Statement of Assurance Unmodified Beginning Ending Material Weaknesses Balance New Resolved Consolidated Reassessed Balance None 0 0 0 0 0 0 Total Material Weaknesses 0 0 0 0 0 0 Conformance with Financial Management System Requirements (FMFIA § 4)
Statement of Assurance Federal systems conform to financial management system requirements Beginning Ending Non-conformances Balance New Resolved Consolidated Reassessed Balance None 0 0 0 0 0 0 Total Non-conformances 0 0 0 0 0 0 Compliance with Section 803 (a) of the Federal Financial Management Improvement Act (FFMIA)
Agency Auditor
- 1. Federal Financial Management Systems No Lack of Compliance Noted No Lack of Compliance Noted Requirements
- 2. Applicable Federal Accounting Standards No Lack of Compliance Noted No Lack of Compliance Noted
- 3. United States Standard General Ledger at the No Lack of Compliance Noted No Lack of Compliance Noted Transaction Level FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 105
Chapter 3 Other Information FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 106
Chapter 3 Other Information Payment Integrity Risk Assessment The NRC is required to complete risk assessments to determine whether any programs were susceptible to making significant improper payments in accordance with the Payment Information Integrity Act of 2019 (PIIA). At this time, only intragovernmental transactions are exempt from PIIA requirements.
The NRC performed a risk assessment as of September 30, 2023. Management identified commercial payments, grant payments, employee reimbursements, payroll, and Government charge cards as potential areas to include in the PIIA risk assessment. In FY 2023, the NRC reviewed FY 2022 disbursements of selected programs to determine the appropriate threshold to conduct a risk assessment and possible testing. For FY 2022, total commercial payments were
$181.4 million; total grants payments were $12.3 million; total employee reimbursements were
$10.5 million; total payroll payments were $442.7 million; total Government charge cards were
$1.6 million.
For the programs selected for testing, as part of the qualitative and quantitative risk assessment, the NRC used its best judgment to select samples from each program under review, based on the universe of payments, which were reconciled to the general ledger. This sample was not meant to be statistically valid, as testing was performed to support the risk assessment process versus conducting full improper payment testing for high-risk programs. The testing was further refined through the identification of select attributes for each program to determine whether the right recipient received the right payment amount for the right goods or services at the right time.
The results of the FY 2023 risk assessment did not identify any programs that were susceptible to making significant improper payments. Although the results of the FY 2023 risk assessment identified programs as low risk, the NRC continues to monitor its payment processes, in addition to conducting periodic reviews of key controls for PIIA programs identified by management. The NRC will continue to conduct risk assessments on a triennial basis, in accordance with the PIIA, as well as OMB guidance. The next PIIA risk assessment will take place in FY 2026. In addition, the NRC will conduct risk assessments, as needed, if there are material changes in the way programs operate or if the agency establishes new programs. More detailed information on improper payments can be found at https://paymentaccuracy.gov.
Recapture of Improper Payments Reporting As noted above, the NRC conducted a risk assessment in FY 2023 and discovered no significant improper payments. Based on no significant improper payments at the NRC, and the substantial cost of conducting recapture audits, the agency determined that recovery or recapture audits are not cost effective. The NRC conducts risk assessments every 3 years as required by PIIA.
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 107
Chapter 3 Other Information Agency Improvement of Payment Accuracy with the Do Not Pay Initiative The NRC uses the Treasurys Do Not Pay automated tools to monitor and reduce improper payments. This process has not resulted in the capture of any improper payments. Instead, the NRC captures improper payments through the agencys internal controls. The NRC uses the Federal Awardees Performance and Integrity Information System and other data systems such as the System for Award Management and financial reports to establish whether a contractor has the integrity and business ethics to receive a Federal contract and is otherwise responsible, which is consistent with applicable statutes and regulations.
To date, the NRC awards grants only to educational institutions and other entities, not individuals.
The NRC uses the System for Award Management and other data systems to ensure that only responsible and otherwise eligible applicants receive the NRC grants. The agency uses the same monitoring practices for both grantees and commercial vendors. The NRC reviews for debarments and suspensions as part of the pre-award risk review for eligibility and takes appropriate action internally to debar and suspend grant recipients, as appropriate. The NRC continues to follow the lead of the Office of Federal Procurement Policy on award recipients and continues to implement any changes directed by the policy. The NRC will also continue to use Do Not Pay to review and monitor improper payments.
Real Property The NRC does not own or lease real property. Each of the agencys occupancies are through agreements with the General Services Administration (GSA). At the end of fiscal year (FY) 2023, NRCs real property portfolio totaled approximately 837,730 usable square feet (USF), which represents a reduction of approximately 59,060 USF (by releasing two floors in Two White Flint North back to GSA) from the portfolio compared to the end of FY 2022. The agency planned to release another 29,083 USF square in June 2023 under a new lease for our Region 3 (Lisle, IL) location, however; the project was delayed due to a protest of GSAs lease award. NRC and GSA now anticipate the new space and associated reduction to be complete in late FY 2024. In FY 2025, the agency plans to release 78,000 USF by releasing an additional floor in TWFN, and reducing Region 2's (Atlanta, GA) space by half as a result of a new lease.
NRCs strategy is well underway to release a total of approximately 260,000 USF of office space between FY 2021 through FY 2025. The strategy is updated at least annually and reflects a total portfolio reduction from 0.991M USF at the beginning of FY 2021 to approximately 0.731M USF through FY 2025. This represents a reduction of 26% of the agencys real property portfolio over the five-year period of FY 2021 through FY 2025, and a 32% reduction of NRC's space as compared to FY 2020. Once complete, the reductions are projected to save the agency over $12M million in annual rent and related costs.
Reference:
Federal Real Property Public Data Set at https://www.gsa.gov/policy-regulations/policy/real-property-policy/asset-management/federal-real-property-profile-frpp/federal-real-property-public-data-set FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 108
Chapter 3 Other Information Civil Monetary Penalty Adjustment for Inflation On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act of 1990 was amended by the Federal Civil Penalties Inflation Adjustment and Improvements Act of 2015 (Sec.701, Pub.L.114-74, 129 Stat.599). This act requires that the head of each agency annually adjust for inflation the amounts of any civil monetary penalties assessed under statutes enforced by that agency.
As displayed below, the NRC annually adjusts two civil penalty amounts for inflation, most recently on January 13, 2023. With respect to civil penalties for violations of the Atomic Energy Act of 1954, as amended, the NRC codifies the maximum civil penalty amount at 10 CFR 2.205, Civil Penalties, although individual penalties are assessed based on the class of licensee and severity of violation in accordance with the NRC Enforcement Policy (available at https://www.nrc.gov/docs/ML2233/ML22336A179.pdf). With respect to monetary penalties under the Program Fraud Civil Remedies Act, the NRC codifies the maximum penalty amount at 10 CFR 13.3, Basis for Civil Penalties and Assessments.
Penalty (Name of Statutory Year Date of Current Location for Penalty) Authority Enacted Current Penalty Penalty Adjustment Level Update Details Maximum civil Atomic Energy 1980 January $351,424 Federal penalty for Act of 1954, as 2023 Register; violations of the amended 88 FR 2188 Atomic Energy Act (42 U.S.C. 2282) (January 13, 2023)
Fraudulent false Program Fraud 1986 January $13,508 Federal claims and Civil Remedies 2023 Register; statements Act (31 U.S.C. 88 FR 2188 3802) (January 13, 2023)
FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 109
Chapter 3 Other Information Grants Oversight and New Efficiency Act Requirements Category 2-3 Years >3-5 Years >5 Years Number of Grants/Cooperative Agreements with 24 8 13 Zero Dollar Balances Number of Grants/Cooperative Agreements with 33 23 13 Undisbursed Dollar Balances Total Amount of Undisbursed Balances $473,784.41 $781,283.32 $75,974.72 While the number of open grants has increased slightly from FY22, the value of the unliquidated obligations has decreased by approximately $785,000. NRC will continue to prioritize the closeout of grants to reduce the number of prior year open grants.
Climate-Related Financial Risk Protecting the environment is vital to the NRCs mission, as reflected in the agencys commitment to incorporating strategies that promote sustainability into its daily operations.
The NRC continues to comply with the goals stated in Executive Order 14008, Tackling the Climate Crisis at Home and Abroad, and views sustainability as an integral part of its business planning and decision-making.
The NRCs Chief Sustainability Officer (CSO) is the senior executive level manager responsible for promoting environmental and energy sustainability across the agency. The agencys CSO works with managers and employees to address the organization's approach to environmental responsibility and meeting the requirements in EO 14008.
The latest NRC Sustainability Report and Implementation Plan can be found at:
https://adamsxt.nrc.gov/navigator/AdamsXT/content/downloadContent.faces?objectStoreName=MainLibr ary&ForceBrowserDownloadMgrPrompt=false&vsId=%7b2CF91716-6991-CD14-86E0-894574A00000%7d FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 110
Chapter 3 Other Information FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 111
Chapter 3 Other Information Acronyms and Abbreviations Acronym Full Title 3WFN Three White Flint North 10 CFR Title 10 of the Code of Federal Regulations AFR Agency Financial Report AO abnormal occurrence BCC Broker Commission Credits CARS Central Accounting Reporting System CFO Chief Financial Officer Charge Card Act Government Charge Card Abuse Prevention Act of 2012 CSRS Civil Service Retirement System Data Act Digital Accountability and Transparency Act of 2014 DM&R Deferred maintenance and repairs DNFSB Defense Nuclear Facilities Safety Board DOL U.S. Department of Labor ECERM Executive Committee on Enterprise Risk Management ERM Enterprise Risk Management FAIMIS Financial Accounting and Integrated Management Information System FASAB Federal Accounting Standards Advisory Board FDA U.S. Food and Drug Administration FECA Federal Employees Compensation Act of 1993 FERS Federal Employees Retirement System FERS-FRAE Federal Employees Retirement System-Further Revised Annuity Employees FERS-RAE Federal Employees Retirement System-Revised Annuity Employees FFMIA Federal Financial Management Improvement Act of 1996 FMFIA Federal Managers Financial Integrity Act of 1982 FR Federal Register FTE full-time equivalent FY fiscal year GAAP generally accepted accounting principles GAO U.S. Government Accountability Office GSA U.S. General Services Administration GTAS Governmentwide Treasury Account Symbol Adjusted Trial Balance System IT information technology FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 112
Chapter 3 Other Information Acronym Full Title M&R maintenance and repairs NEIMA Nuclear Energy Innovation and Modernization Act NIH National Institutes of Health NRC U.S. Nuclear Regulatory Commission NUREG Nuclear Regulatory Commission document identifier NWF Nuclear Waste Fund OCFO Office of the Chief Financial Officer OIG Office of the Inspector General OMB Office of Management and Budget OPM Office of Personnel Management PIIA Payment Integrity Information Act of 2020 PP&E property, plant, and equipment SAT Senior Assessment Team SBR Statement of Budgetary Resources SFFAS Statement of Federal Financial Accounting Standards Treasury U.S. Department of the Treasury TTC Technical Training Center UF6 uranium hexafluoride UO2 uranium oxide U.S.C. United States Code USF usable square feet FY 2023 Agency Financial Report https://www.nrc.gov Protecting People and the Environment 113
NRC FORM 335 U.S. NUCLEAR REGULATORY COMMISSION 1. REPORT NUMBER (12-2010) (Assigned by NRC, Add Vol., Supp , Rev.
NRCMD 3. 7 , and Addendum Numbers, if any. )
BIBLIOGRAPHIC DATA SHEET (See instructions on the reverse)
NUREG-2220 Volume 7
- 2. TITLE AND SUBTITLE 3. DATE REPORT PUBLISHED U.S Nuclear Regulatory Commission MONTH YEAR Fiscal Year 2023 November 2023 Agency Financial Report 4. FIN OR GRANT NUMBER
- 5. AUTHOR(S) 6. TYPE OF REPORT Annual James Ekechuku, Rosalyn Jones, Susan Jones, et al
- 7. PERIOD COVERED (Inclusive Dates)
Fiscal Year 2023
- 8. PERFORMING ORGANIZATION - NAME AND ADDRESS (If NRC, provide Division, Office or Region, U.S. Nuclear Regulatory Commission, and mailing address; if contractor, provide name and mailing address.)
Division of the Comptroller Office of the Chief Financial Officer U.S Nuclear Regulatory Commission Washington, DC 20555-0001
- 9. SPONSORING ORGANIZATION - NAME AND ADDRESS (If NRC, type "Same as above", if contractor, provide NRC Division, Office or Region, U.S. Nuclear Regulatory Commission, and mailing address.)
Same as above
- 10. SUPPLEMENTARY NOTES
- 11. ABSTRACT (200 words or less)
The Fiscal Year 2023 Agency Financial Report (AFR) presents the agency's financial results of operations which includes the audited annual financial statements of the NRC.
The AFR also provides a summary of NRC program performance and cost. The information is presented in accordance with applicable statutes and OMB requirements in OMB Circular A-136, Financial Reporting Requirements.
- 12. KEY WORDS/DESCRIPTORS (List words or phrases that will assist researchers in locating the report.) 13. AVAILABILITY STATEMENT unlimited
- 14. SECURITY CLASSIFICATION Agency Financial Report (AFR) Fiscal Year 2023 (This Page) unclassified (This Report) unclassified
- 15. NUMBER OF PAGES
- 16. PRICE
United States Nuclear Regulatory Commission NUREG-2220, Volume 7 November 2023