Major Management Challenges and Performance Risks: Nuclear Regulatory
Commission (Letter Report, 01/01/2001, GAO/GAO-01-259).

This report, part of GAO's high risk series, discusses the major
management challenges and program risks facing the Nuclear Regulatory
Commission (NRC). GAO found that NRC must resolve issues related to its
risk-informed regulatory approach for commercial power plants. NRC
developed the Risk-Informed Regulation Implementation Plan to guide its
efforts to transition from its traditional regulatory approach to a
risk-informed approach. This Plan, however, is not as comprehensive as
it could be. GAO found that the plan lacked critical performance
measures and did not address activities that cut across agency
resources. NRC must also address the inherent difficulties in applying a
risk-informed approach to nuclear material licensees. Other challenges
facing NRC include strengthening its personnel management, developing an
effective cost accounting system, and resolving financial management
issues.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GAO-01-259
     TITLE:  Major Management Challenges and Performance Risks: Nuclear
	     Regulatory Commission
      DATE:  01/01/2001
   SUBJECT:  Risk management
	     Accountability
	     Strategic planning
	     Nuclear powerplants
	     Personnel management
	     Financial management
	     Performance measures
	     Information resources management
IDENTIFIER:  High Risk Series 2001
	     GAO High Risk Program

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GAO-01-259

Performance and Accountability Series

January 2001 Major Management Challenges and Performance Risks

Nuclear Regulatory Commission

GAO- 01- 259

Letter 3 Overview 6 Major

11 Performance and Accountability Challenges

Related GAO 26

Products Performance

27 and Accountability Series

Lett er

January 2001 The President of the Senate The Speaker of the House of
Representatives

This report addresses the major performance and accountability challenges
facing the Nuclear Regulatory Commission (NRC) as it seeks to ensure
adequate protection of public health and safety, promote common

defense and security, and protect the environment by regulating the nation's
civilian use of nuclear fuels and materials. It includes a summary of
actions that NRC has taken and that under way to address these challenges.
It also outlines further actions that GAO believes are

needed. This analysis should help the new Congress and administration carry
out their responsibilities and improve government for the benefit of the
American people.

This report is part of a special series, first issued in January 1999,
entitled the Performance and Accountability Series: Major Management
Challenges

and Program Risks. In that series, GAO advised the Congress that it planned
to reassess the methodologies and criteria used to determine which federal
government operations and functions should be highlighted and which should
be designated as “high risk.” GAO completed the assessment,
considered comments provided on a publicly available exposure draft, and
published its guidance document, Determining Performance and Accountability
Challenges and High Risks (GAO- 01- 159SP), in

November 2000. This 2001 Performance and Accountability Series contains
separate reports on 21 agencies- covering each cabinet department, most
major independent

agencies, and the U. S. Postal Service. The series also includes a
governmentwide perspective on performance and management challenges across
the federal government. As a companion volume to this series, GAO is issuing
an update on those government operations

and programs that its work identified as “high risk” because of
either their greater vulnerabilities to waste, fraud, abuse, and
mismanagement or major challenges associated with their economy, efficiency,
or effectiveness.

David M. Walker Comptroller General of the United States

Overview The Nuclear Regulatory Commission (NRC) is responsible for ensuring
that those who use radioactive material- in generating electricity, for
experiments in universities, and for such medical uses as treating cancer-
do so in a manner that protects the public, the environment, and workers.
NRC has issued licenses to 103 operating commercial nuclear power plants and
10 facilities that produce fuel for these plants. In addition, NRC, or the
32 states that have agreements with NRC, regulate almost 21,000 entities
that use nuclear materials (nuclear material licensees). 1 In the medical
field alone, licensees annually perform an estimated 10 million to 12
million diagnostic and therapeutic procedures involving radioactive
material.

NRC has been moving from its traditional regulatory approach, which was
largely developed without the benefit of quantitative estimates of risk,
toward more of a risk- informed, performance- based approach. Under this
approach, NRC will use risk assessment findings, engineering analysis, and
performance history to focus attention on the most important safety- related
activities, establish objective criteria to evaluate performance, develop
measures to assess licensee performance, and focus on results as the primary
basis for making regulatory decisions. Public interest group

representatives, the Nuclear Energy Institute, and others believe that risk-
informed and performance- based approaches would result in a more
transparent, predictable, nonredundant, and efficient regulatory
environment. 2 Successfully implementing these

approaches, however, will require NRC to reorient the 1 In addition, about
100,000 entities are authorized to use devices powered by radioactive
materials. 2 The Nuclear Energy Institute includes members from all
utilities licensed to operate commercial nuclear plants in the United
States, as well as nuclear plant designers, major architectural/ engineering
firms, fuel fabrication facilities, materials licensees, and other
organizations and individuals involved in the nuclear energy industry.

culture of its staff, which has a long history with and commitment to the
traditional regulatory approach.

GAO, the Nuclear Energy Institute, and others have doubts about NRC's
ability to bridge this cultural divide and effectively implement the new
approaches. NRC is aware of the complexities involved and the long- term
nature of these types of changes. It has initiated a number of activities to
address implementation issues, but it continues to face major performance
and accountability challenges in managing these fundamental changes. NRC's
performance in addressing these challenges will significantly shape its
ability to ensure that commercial nuclear power plants and other licensees
operate safely and, ultimately, that workers,

the public, and the environment are adequately protected.

Resolve numerous issues to implement a riskinformed regulatory approach for
commercial nuclear power plants

? Overcome inherent difficulties to apply a riskinformed approach to nuclear
material licensees

? Continue efforts to cope with significant human capital challenges,
resolve financial management issues, and effectively develop and implement
new information technology

Nuclear Power NRC faces numerous challenges to implement a riskinformed

Plants regulatory approach for commercial nuclear

power plants. In a March 1999 report, we concluded that whatever processes
NRC ultimately adopts must be consistent, visible, and clear. This becomes
even more important as the nation moves to a competitive electricity
environment because utilities will not always be able to pass the costs of
regulatory compliance on to consumers. Yet because of concerns about the
risks of catastrophic accidents, the public will continue to pressure NRC
and the industry to explain their actions.

As we recommended in March 1999, a clearly defined strategy would help both
NRC and the utilities address the public's concerns as it implements a risk-
informed regulatory approach. In response, NRC initially agreed on the need
for a

comprehensive strategy that would describe the activities it wanted to risk-
inform, the actions needed to make them so, and the schedule and resources
needed to accomplish the activities, but it has not done so.

Instead, NRC developed the Risk- Informed Regulation Implementation Plan,
which includes guidelines to identify, set priorities for, and implement
risk- informed changes to regulatory processes. However, the plan is not as
comprehensive as it needs to be because it does

not identify those items critical to achieving its objectives, activities
that cut across the agency, resources, performance measures, or the
relationships among these various activities. NRC has made a commitment to
having performance measures by the end of December 2000 and to including
them in its fiscal year 2002 performance plan.

As we reported in January 2000, NRC also needs to overcome the opposition of
its own staff and the public to a risk- informed approach. Both NRC staff
and the public have had a long history with the traditional approach and do
not fully understand the reasons for implementing a risk- informed approach
and the relationship of that approach to maintaining plant safety. Finally,
NRC needs to address several questionable

aspects of its relationship with the utilities it regulates. After
concluding that it could not demonstrate that a risk- informed approach
would be cost- beneficial to utilities, NRC decided that compliance with
such an approach would be voluntary. As we previously concluded, NRC will be
regulating with two different systems- one for those utilities that choose
to comply with a risk- informed approach and another for those that choose
to stay with the existing regulatory approach. Furthermore, NRC has not
decided whether to allow utilities to “pick and choose” among
the specific provisions of the regulations that it risk- informs, which
compounds the challenges in an already complex regulatory environment. If
NRC successfully addresses

these challenges, it will help ensure that commercial nuclear plants operate
safely and that it discharges its regulatory responsibilities effectively
and efficiently.

Nuclear Material NRC also needs to overcome the difficulties inherent in
Licensees

applying a risk- informed regulatory approach for nuclear material
licensees. Of most importance, the sheer number of licensees- almost 21,
000- and the diversity of activities they conduct- converting uranium,
transporting radioactive material, and using

radioactive material for industrial, medical, or academic purposes- increase
the complexity of developing a riskinformed regulatory approach for material
licensees. In addition, NRC will be challenged to define its role, including
the size and skill mix of staff both in headquarters and regional offices,
as an increasing number of states assume responsibility for regulating
nuclear material users within their borders. The decisions that NRC
ultimately makes could have budgetary and other implications for the agency.
Management Issues NRC needs to resolve a number of challenges to effectively
and efficiently manage the agency. For

example, by the end of fiscal year 2005, about 33 percent

of NRC staff will be eligible to retire. As a result, NRC needs to identify
the scientific, engineering, and technical core competencies as well as the
skills and

expertise that staff need to carry out NRC's mission and develop a plan to
replenish its workforce. NRC's Chairman has said that maintaining technical
competency may be the biggest challenge confronting the agency. NRC must
also ensure that staff hired to replace those who retire or leave the agency
receive the training needed to effectively and efficiently carry out their
responsibilities. In October 2000, we recommended

that NRC identify the skills needed for those who will replace its technical
training instructors and develop a succession plan to ensure that qualified
staff are available and trained to minimize the disruption of the technical
training provided. NRC's human capital problems can be seen as part of a
broader pattern of human capital shortcomings that have eroded mission
capabilities across the federal government. See our High- Risk Series: An
Update (GAO- 01- 263, January 2001) for a discussion of human capital as a
newly designated governmentwide high risk area.

Like most other federal agencies, NRC also needs to improve its financial
management by developing and implementing a cost accounting system. NRC's
Office of the Inspector General (OIG) identified the lack of a cost
accounting process as a material weakness constituting a substantial
noncompliance with the Federal Financial Management Improvement Act.
Finally, the problems NRC experienced with its new document capture and
retrieval system illustrate that the agency must ensure that its information
technology acquisitions are developed and implemented as intended to
minimize staff dissatisfaction and maximize its resources.

Major Performance and Accountability Challenges

NRC's primary mission is to ensure that those entities using radioactive
materials do so in a manner that protects the public, the environment, and
workers. Identifying safety problems and making sure that the licensees
correct them promptly are essential to NRC's safety mission. NRC faces a
number of challenges as it moves from its traditional regulatory approach,
which

was largely developed without the benefit of quantitative estimates of risk,
to an approach- termed risk- informed regulation- that considers relative
risk in conjunction with engineering analyses and operating experience. NRC
has also been moving to a performance- based regulatory approach. A
riskinformed,

performance- based approach uses risk assessment results and findings,
engineering analysis, and performance history to focus attention on the most
important activities, establish objective criteria to evaluate performance,
develop measures to assess

licensee performance, and focus on results as the primary basis for making
regulatory decisions. NRC also faces significant challenges in managing
these changes.

NRC Needs to Public interest group representatives, the Nuclear

Resolve Numerous Energy Institute, and others believe that risk- informed
Issues to and performance- based approaches would result in a Implement a
RiskInformed

more transparent, predictable, nonredundant, and efficient regulatory
environment. We previously Approach for concluded that whatever processes
NRC ultimately Commercial adopts must be consistent, visible, and clear. The
need Nuclear Power for clarity may be even more important today than it has
been in the past because in a competitive electricity Plants environment,
utilities will not always be able to pass the costs of regulatory compliance
on to consumers. Yet

because of concerns about the risks of catastrophic accidents, the public
will continue to pressure NRC and the industry to explain their actions. A
clearly defined

strategy would help both NRC and the utilities address the public's
concerns.

However, NRC does not have comprehensive plans to implement a risk- informed
regulatory approach or a performance- based approach. As early as 1996,
NRC's OIG recommended that the agency define the elements of a performance-
based approach and develop a plan to implement it. 1 NRC subsequently
identified the elements

and in September 2000 published “high- level” guidance for
identifying the regulations that could be performance based. NRC staff
tested the guidelines by applying them to two regulations. They concluded
that the test cases clearly support the utility of the guidelines, but to
maximize the performance- based potential, the guidelines need to be applied
to both the regulations selected and their implementing guidance to ensure
effective results. NRC staff plan to develop a management directive to
support agencywide implementation of the guidelines in ongoing and future
rulemakings and other regulatory activities. They also expect to develop a

communications plan to promote broader awareness of performance- based
approaches among external stakeholders. As a result, NRC staff do not
believe that a comprehensive strategy or plan to implement a performance-
based approach is needed. However, until it completes these efforts and
demonstrates the efficacy of the guidance, it is not clear whether NRC will
achieve its goals or whether it will need to resolve other challenges. In
March 1999, we recommended that NRC develop a

comprehensive strategy to guide the process of moving to a risk- informed
regulatory approach. In response, NRC initially agreed on the need for a
comprehensive 1 Better Definition and Planning Needed to Guide NRC's
Transition to a Risk- Informed, Performance- Based Regulatory System (OIG-
96E- 18, Oct. 4, 1996).

strategy that would describe the activities the agency wanted to risk-
inform, the actions needed to make them so, and the schedule and resources
needed to accomplish the activities, but it has not done so. As one NRC
Commissioner said in March 2000, “we really

are . . . inventing this as we go along [and] given how much things are
changing, it's very hard to plan even 4 months from now, let alone years
from now.” Instead, NRC developed the Risk- Informed Regulation
Implementation Plan, which includes guidelines to identify, set priorities
for, and implement risk- informed changes to regulatory processes. The plan
also identifies specific tasks and projected milestones.

The Risk- Informed Regulation Implementation Plan is not as comprehensive as
it needs to be because it does not identify performance measures, the items
that are critical to achieving its objectives, activities that cut across
its major offices, resources, or the relationships among the more than 40
separate activities (more than 20 pertain to nuclear power plant safety).
For example, risk- informing NRC's regulations will be a formidable task
because they are interrelated. Amending one regulation can potentially
affect other regulations governing other aspects of nuclear plant
operations.

NRC recognized this problem when, in developing a riskinformed approach for
one regulation, it identified over 20 regulations that would need to be made
consistent.

NRC expects that its efforts to change its regulations applicable to nuclear
power plants to focus more on relative risk will take 5 to 8 years. Another
example of the many challenges to implementing a risk- informed approach for
commercial nuclear power plants relates to the development and
implementation of risk- based performance indicators. NRC may need until at
least fiscal year 2005 to fully integrate risk- based indicators into its
new safety

oversight process for commercial nuclear power plants.

The risk- based indicators would supplement the performance indicators,
inspections, and risksignificance determination process of the new safety
oversight process. The Nuclear Energy Institute, public interest groups, and
one state official have raised a

number of issues about NRC's development of the indicators: the (1) scope
and source of the data for them, (2) resources required to develop them, (3)
need for risk assessments to reflect actual conditions at the plants, and
(4) impact on inspection coverage at the plants. For example, the nuclear
power industry has suggested that NRC could reduce its inspection coverage
after implementing the risk- based performance indicators. On the other
hand, the Union of Concerned Scientists and one state official oppose this
suggestion. The state official noted that NRC needs to conduct more
inspections than the few it does now. NRC staff expect to report in November
2001 on their efforts to develop reliable risk- based performance indicators
for safety equipment, fire protection, and industrywide trends and, in the
spring of 2003, on the feasibility of developing such indicators for
earthquakes and other external events. However, NRC has not determined
whether or when such indicators would be included in the new safety
oversight process.

According to staff, NRC intends the Risk- Informed Regulation Implementation
Plan to be a high- level plan, with other agency documents, such as
operating plans prepared by its major program offices, providing the

day- to- day linkages and interrelationships among the various activities.
NRC has made a commitment to define performance measures by the end of
December 2000 and to include them in its fiscal year 2002 performance plan.
It also expects to elicit both its staff's and the public's comments on the
plan. At a November 2000 briefing, several NRC Commissioners acknowledged
that the agency still “had a ways to go” to have a strategy to
guide its actions. Until the staff

complete these activities, NRC, the Congress, and other stakeholders cannot
determine whether the RiskInformed Regulation Implementation Plan will
provide the comprehensive roadmap that we recommended. Management NRC needs
to obtain staff “buy in” and ensure that the

Leadership Needed public is confident about its new regulatory approach. for
Staff to As we concluded in January 2000, a large number of Successfully

NRC staff did not believe that management was Implement, and the

effectively leading the change process or involving them Public to Accept,
in the changes being made. More important, only about NRC's New 25 percent
of the Office of Nuclear Reactor Regulation Direction

staff believed that a risk- informed approach had been accepted by NRC
staff. 2 With such limited staff acceptance, it will be difficult for NRC to
effectively implement its new regulatory approach. NRC recently began an
initiative to identify options to help staff accept and effectively
implement the agency's new direction and to ensure that they understand the
reasons for implementing a risk- informed approach and the relationship of
that approach to maintaining plant safety.

Because NRC started this initiative in October 2000, it is too early to
determine whether it would help the agency achieve greater staff buy- in.

NRC also needs to ensure that the public is confident that a risk- informed
approach would afford the same level of safety as its traditional regulatory
approach. For example, NRC has approved more than 100 license amendments for
nuclear power plants using a riskinformed approach. This approval was based
on interim guidance that NRC used to determine if utilities' risk
assessments adequately supported the proposed 2 The Office of Nuclear
Reactor Regulation is responsible for ensuring that commercial nuclear power
plants operate safely and do not endanger the public or the environment.

amendments. Risk assessments are one of the main tools to identify and focus
on those structures, systems, and components of nuclear plants that pose the
greatest risk to safety. NRC used the interim guidance because standards for
the quality and scope of risk assessments are currently under development by
the American Society of Mechanical Engineers, the American Nuclear

Society, and others. While NRC believes that most of these new standards
will be made final in 2001, this issue is far from being resolved because
NRC will have to adopt the standards

and obtain public comment on them. Furthermore, NRC will have to develop a
mechanism to make updated risk assessment results available to the public.
Currently, the public has access only to information that is 10 or more
years old. In October 2000, the Advisory Committee on Reactor Safeguards
noted that without ready access to updated assessment results, the public
may not have confidence in regulatory decisions that use risk

assessments. 3 Selective

Because NRC cannot demonstrate that a risk- informed Implementation of
approach would be cost- beneficial to utilities, it decided Regulations
Could

that compliance with such an approach will be Exacerbate an voluntary. As we
previously concluded, NRC will be Already Complex regulating with two
different systems- one for those Regulatory utilities that choose to comply
with a risk- informed Environment

approach and another for those that choose to stay with the existing
regulatory approach. In addition, NRC has not decided whether to allow
utilities to “pick and choose” among the specific provisions of
the regulations that it risk- informs (selective implementation). NRC has

3 The Advisory Committee on Reactor Safeguards is a statutory committee
established to advise NRC on the safety aspects of proposed and existing
nuclear facilities as well as to perform other duties as the Commission may
request.

not yet issued an agency policy on selective implementation or specified a
time frame for doing so.

We believe that selective implementation would compound the challenges in an
already complex regulatory environment. According to NRC staff, the agency
has had many years of experience in dealing with different nuclear plant
designs and different requirements. They also noted that with electricity
deregulation, the nuclear power industry is consolidating, which may resolve
some of the historic

regulatory complexities. This is because standardized policies and practices
could result from the consolidation and because NRC will have fewer
companies to oversee. NRC recently began to assess the impact of
deregulation and its consequences on the agency and the industry in such
areas as grid reliability, decommissioning funding, and regional
consistency. This assessment could identify other policy, programmatic, or
management challenges that NRC will need to address. NRC Needs to

NRC needs to overcome the difficulties inherent in Overcome applying a risk-
informed regulatory approach for Inherent nuclear material licensees. The
sheer number of Difficulties to

licensees- almost 21,000- and the diversity of the Apply a RiskInformed
activities they conduct- converting uranium, decommissioning nuclear plants,
transporting Approach to

radioactive materials, and using radioactive material for Nuclear Material

industrial, medical, or academic purposes- increase the complexity of
developing a risk- informed approach that Licensees would adequately cover
all types of licensees. For example, the diversity of licensees results in
varying levels of analytical sophistication; different experience in using
risk- informed methods, such as risk assessments and other methods; and
uneven knowledge about the analytical methods that would be useful to them.

Because material licensees will be using different riskinformed methods, NRC
has grouped them by the type of material used and the regulatory
requirements for that material. For example, licensees that manufacture

casks to store spent reactor fuel could be required to use formal analytical
methods, such as a risk assessment. Other licensees, such as those that use
nuclear material in industrial and medical applications, would not be
expected to conduct risk assessments. Rather, NRC staff said that they will
use other methods to determine those aspects of the licensees' operations
that have significant

risk, using an approach that considers the hazards (type, form, and quantity
of material) and the barriers or physical and administrative controls that
prevent or reduce exposure to these hazards. Another example of the
challenges in implementing a

risk- informed approach for material licensees is the proposal to implement
a new safety and safeguards oversight process for fuel cycle facilities.
Unlike commercial nuclear power plants, which have a number of design
similarities, most of the 10 fuel cycle facilities

perform separate and unique functions. For example, one facility converts
uranium to a gas for use in the enrichment process, two facilities enrich or
increase the amount of uranium- 235 in the gas, and five facilities
fabricate the uranium into fuel for commercial nuclear power plants. These
facilities possess large quantities of materials that are potentially
hazardous (i. e, explosive, radioactive, toxic, and/ or combustible) to
workers. Their diversity of activities makes it particularly challenging for
NRC to design a “one- size- fits- all” safety oversight process
and develop indicators and thresholds

of performance. NRC has yet to resolve such issues as the structure of the
problem identification, resolution, and corrective action program; the
mechanics of the risk- significance determination process; and the
regulatory responses that NRC would take when changes in performance occur.
NRC had planned to pilot- test the new oversight process for fuel cycle
facility

safety in fiscal year 2001, but staff told us that this schedule could slip.
NRC also faces challenges in redefining its role in a changing regulatory
environment. As the number of agreement states increases beyond the existing
32, NRC must continue to ensure the adequacy and consistency of the states'
programs as well as its own effectiveness

and efficiency in overseeing licensees that are not regulated by an
agreement state. NRC has been working with the Conference of Radiation
Control Program Directors (primarily state officials) and the Organization
of Agreement States to address these challenges. However, NRC has not yet
addressed such questions as the following: (1) Would NRC continue to need
staff in all four of its regional offices as the number of agreement states
increases? (2) What are the appropriate number, type, and skills needed for

headquarters staff? and (3) What should NRC's role be in the future? In June
2000, one NRC Commissioner noted that the agency has more expertise on the
use of nuclear material than any other agency in the world, and it would be
unfortunate to lose that expertise if NRC no longer had materials licensees
to regulate. In May 2001,

a NRC/ state working group expects to provide the Commission with various
options for the materials program of the future. NRC staff said that the
agency wants to be in a position to plan for needed changes because, in
2003, it anticipates that 35 states will have agreements with NRC and
oversee more than 85 percent of all material licensees.

NRC Needs to NRC needs to resolve a number of human capital, Address Human

financial management, and information technology Capital, Financial
challenges to effectively and efficiently manage itself.

Management, and Specifically, it needs to develop a succession plan for the

Information skills and expertise needed to replace its workforce, Technology
Issues

improve its financial management by developing and implementing a cost
accounting system, and ensure that it effectively and efficiently develops
and implements new information technologies.

NRC Faces Human As one NRC Commissioner said, “There is a crisis
Capital Challenges

looming in government” because an entire generation of employees is
going to retire or will be eligible to retire in the near future. In fiscal
year 2001, about 16 percent of NRC staff are eligible to retire and by the
end of fiscal year 2005, about 33 percent will be eligible. In its fiscal
year 2000 performance plan, NRC identified the need to maintain core
competencies and staff as an issue that could affect its ability to achieve
its performance goals.

NRC noted that maintaining the correct balance of knowledge, skills, and
abilities is critical to accomplishing its mission and is affected by
various factors. These factors include the labor market for experienced
professionals, the workload as projected by the nuclear industry, and the
declining university enrollment in nuclear engineering studies and other

fields related to nuclear safety. As we recently reported, in February 2000,
NRC's Commissioners directed the staff to develop a comprehensive plan that
links the abilities needed to carry out NRC's mission with the training
offered. According to NRC's senior managers, the lack of a computer system
that is tied to its personnel system has

hampered the staff's efforts to conduct the skills assessment. NRC wants to
collect the data for all staff and have a mechanism to automatically update
the data as warranted. The senior managers noted that without a

link to its personnel system, the skills assessment data will be of limited
use. They estimated that NRC could initiate the skills assessment sometime
in fiscal year 2001.

In addition, in October 2000, NRC's Chairman requested that, by the end of
January 2001, the staff have a plan to assess the scientific, engineering,
and technical core competencies NRC needs and propose specific strategies to
ensure that the agency maintains that competency. The Chairman noted that
maintaining technical competency may be the biggest challenge confronting
NRC. NRC also must ensure that staff hired to replace those who retire or
leave the agency receive the training needed to effectively and efficiently
carry out their responsibilities. In October 2000, we recommended that NRC
identify the skills needed for

those who will replace its technical training instructors and develop a
succession plan to ensure that qualified staff are available and trained to
minimize the disruption of the technical training provided. To help
alleviate these concerns, NRC requested funds for fiscal years 2001, 2002,
and 2003 to actively recruit

qualified college graduates and to provide not only specialized training but
also rotational assignments in various offices for them. It has established
a tuition assistance program, relocation bonuses, and other inducements to
encourage qualified individuals to accept and continue their employment with
the agency. NRC staff said that the agency is doing the best it can with the
tools available to hire and retain staff, but more needs to be done to
provide agencies with other tools to encourage acceptance of federal
employment.

NRC Needs to In its independent audit of financial statements for fiscal
Improve Its year 1999, NRC's OIG noted that the agency did not have
Financial a cost accounting system. Such a system, required by the
Management

Government Performance and Results Act of 1993, would provide managers with
information to support their responsibilities for planning and controlling
costs,

making decisions, and evaluating performance. NRC has experienced delays in
developing and implementing the cost accounting system because of problems
it encountered with the contractor initially selected to develop the core
system.

NRC's OIG concluded that the lack of a cost accounting process is a material
weakness constituting a substantial noncompliance with the Federal Financial
Management Improvement Act. Since then, NRC has contracted with a new vendor
and purchased a software package to develop the core system. NRC staff are
optimistic that by April 2001 the agency will have implemented a

substantial portion of the cost accounting system to provide managers with
time and labor charges by strategic arena, which they believe should resolve
the material weakness the OIG identified. Despite the Controls NRC's
information technology report describes the Instituted, NRC major systems
that it is developing, and its capital asset Experienced plan shows the
estimated funding required for each Problems system as well as the
justification, funding basis, Implementing a

benefits to be derived, and other information. NRC uses Major Information a
Capital Planning and Investment Control Process to Technology scrutinize
each information technology initiative, and its Initiative Executive Council
is responsible for reviewing

variances to the development of new computer systems and requiring
corrective action before the variances become significant. Despite these
controls, NRC has had problems implementing new information technologies,
such as the Agency Documents Access and Management System (ADAMS).

NRC has spent more than $24 million to develop, implement, and maintain
ADAMS. The system is intended to support document creation, capture, and
retrieval, including those documents that will be made available to the
public. ADAMS, which was implemented in April 2000, is NRC's “file
cabinet” as it strives to implement a more efficient and effective
work environment. However, NRC experienced a number of start- up problems
with the system as well as NRC staff

and public dissatisfaction with it. Some examples of the startup problems
include security issues with some non- NRC users and not recognizing that
staff needed additional training on using the system. In addition, the
public had complained about the unavailability of documents that were
supposed to be in ADAMS and the difficulty of accessing documents in the
system. A nuclear industry publication reported, for example, that Citizens
Awareness Network asked NRC to extend the time for filing a hearing request
and petition to intervene in a license transfer action because it was unable
to print needed documents from ADAMS. NRC's own staff identified hundreds of
problems in using the system. They noted, for example, that the system
overall is slow in performing the most basic tasks. Like the public, NRC
staff also experienced problems printing files stored in ADAMS: They noted
that it was time- consuming, cumbersome, and inefficient to print a
document. The Advisory Committee

on Reactor Safeguards noted that ADAMS diverts critical resources from the
timely performance of normal work processes. According to staff in the
Office of the Chief Information Officer, they were aware of these problems
and had identified solutions for them. These staff also noted that NRC staff
were asked to identify the problems during the time they were learning the
system and adapting to new agency guidance concerning the dissemination of
documents. They said that such problems typically arise when implementing
new information technology systems.

Nevertheless, in May 2000, NRC's Chairman directed the staff to evaluate the
problems that its major offices had encountered in using the system and
determine whether and when the agency can resolve them. In August 2000,
NRC's Chairman endorsed the staff's recommendations to address the problems
identified. The staff consolidated the problems into 10 challenges that will
take 12 to 18 months to complete, including improving

data integrity, the search and retrieval system, public access, training and
user support, and guidance on using the system. Of the numerous issues
identified, NRC staff said that about half will be resolved by the end of
calendar year 2000 by transferring document entry responsibilities to the
Office of the Chief Information Officer and by implementing a new software
package. According to a senior manager who worked with the staff, one of the
most significant findings was that NRC needed to standardize its business
practices, including the distribution of mail by its various offices.
Without such standardization, ADAMS may not achieve its full potential.
According to staff, ADAMS is providing NRC and external users with timely
information. For example, on average, NRC adds 1,900 documents each week to
the system, and during a typical day, about 285 NRC and 25 non- NRC users
concurrently access the system. Finally, NRC had taken weeks to make
documents publicly available but since the implementation of ADAMS, the
agency does so in 5 business days. Under its processes, NRC is required to
prepare a lessons learned analysis 6 months after implementing a new
information technology system. NRC staff expects to report on the lessons
learned for ADAMS by the end of December 2000. This report could identify
further changes that

NRC needs to make to, among other things, its Capital Planning and
Investment Control Process and internal guidance.

Key Contact Robert A. Robinson, Managing Director Natural Resources and
Environment (202) 512- 3841 robinsonr@ gao. gov

Related GAO Products Facility Relocation: NRC Based Its Decision to Move Its
Technical Training Center on Perceived Benefits, Not Costs (GAO- 01- 54,
Oct. 19, 2000).

Radiation Standards: Scientific Basis Inconclusive, and EPA and NRC
Disagreement Continues (GAO/ RCED- 00- 152, June 30, 2000). Observations on
the Nuclear Regulatory Commission's Fiscal Year 1999 Performance Report and
Fiscal Year 2001 Performance Plan (GAO/ RCED- 00- 200R, June 30, 2000). Fire
Protection: Barriers to Effective Implementation of NRC's Safety Oversight
Process (GAO/ RCED- 00- 39, Apr. 19, 2000).

Nuclear Regulation: Regulatory and Cultural Changes Challenge NRC (GAO/ T-
RCED- 00- 115, Mar. 9, 2000).

Nuclear Regulation: NRC Staff Have Not Fully Accepted Planned Changes (GAO/
RCED- 00- 29, Jan. 19, 2000). Nuclear Regulation: Better Oversight Needed to
Ensure Accumulation of Funds to Decommission Nuclear Power Plants (GAO/
RCED- 99- 75, May 3, 1999). Nuclear Regulation: Strategy Needed to Regulate
Safety Using Information on Risk (GAO/ RCED- 99- 95, Mar. 19, 1999).

Nuclear Regulatory Commission: Strategy Needed to Develop a Risk- Informed
Safety Approach (GAO/ T- RCED- 99- 71, Feb. 4, 1999).

Performance and Accountability Series

Major Management Challenges and Program Risks: A Governmentwide Perspective
(GAO- 01- 241)

Major Management Challenges and Program Risks: Department of Agriculture
(GAO- 01- 242)

Major Management Challenges and Program Risks: Department of Commerce (GAO-
01- 243)

Major Management Challenges and Program Risks: Department of Defense (GAO-
01- 244)

Major Management Challenges and Program Risks: Department of Education (GAO-
01- 245)

Major Management Challenges and Program Risks: Department of Energy (GAO-
01- 246)

Major Management Challenges and Program Risks: Department of Health and
Human Services (GAO- 01- 247)

Major Management Challenges and Program Risks: Department of Housing and
Urban Development (GAO- 01- 248)

Major Management Challenges and Program Risks: Department of the Interior
(GAO- 01- 249)

Major Management Challenges and Program Risks: Department of Justice (GAO-
01- 250)

Major Management Challenges and Program Risks: Department of Labor (GAO- 01-
251)

Major Management Challenges and Program Risks: Department of State (GAO- 01-
252)

Major Management Challenges and Program Risks: Department of Transportation
(GAO- 01- 253)

Major Management Challenges and Program Risks: Department of the Treasury
(GAO- 01- 254)

Major Management Challenges and Program Risks: Department of Veterans
Affairs (GAO- 01- 255)

Major Management Challenges and Program Risks: Agency for International
Development (GAO- 01- 256)

Major Management Challenges and Program Risks: Environmental Protection
Agency (GAO- 01- 257)

Major Management Challenges and Program Risks: National Aeronautics and
Space Administration (GAO- 01- 258)

Major Management Challenges and Program Risks: Nuclear Regulatory Commission
(GAO- 01- 259)

Major Management Challenges and Program Risks: Small Business Administration
(GAO- 01- 260)

Major Management Challenges and Program Risks: Social Security
Administration (GAO- 01- 261)

Major Management Challenges and Program Risks: U. S. Postal Service (GAO-
01- 262)

High- Risk Series: An Update (GAO- 01- 263)

GAO United States General Accounting Office

Page 1 GAO- 01- 259 NRC Challenges

Contents

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Comptroller General of the United States

Page 3 GAO- 01- 259 NRC Challenges United States General Accounting Office

Washington, D. C. 20548

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Overview Page 7 GAO- 01- 259 NRC Challenges

Overview Page 8 GAO- 01- 259 NRC Challenges

Overview Page 9 GAO- 01- 259 NRC Challenges

Overview Page 10 GAO- 01- 259 NRC Challenges

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Major Performance and Accountability Challenges Page 12 GAO- 01- 259 NRC
Challenges

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Challenges

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Challenges

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Challenges

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Challenges

Major Performance and Accountability Challenges Page 17 GAO- 01- 259 NRC
Challenges

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Challenges

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Challenges

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Challenges

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Challenges

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Challenges

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Challenges

Major Performance and Accountability Challenges Page 24 GAO- 01- 259 NRC
Challenges

Major Performance and Accountability Challenges Page 25 GAO- 01- 259 NRC
Challenges

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Performance and Accountability Series

Page 28 GAO- 01- 259 NRC Challenges

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