Audit of NRC’s

Regulatory Analysis Process

OIG-15-A-15

June 24, 2015

All publicly available OIG reports (including this report) 

are accessible through NRC’s Web site at

http://www.nrc.gov/reading-rm/doc-collections/insp-gen
UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

June 24, 2015

MEMORANDUM TO: Mark A. Satorius

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits

SUBJECT: AUDIT OF NRC’S REGULATORY ANALYSIS PROCESS

(OIG-15-A-15)

Attached is the Office of the Inspector General’s (OIG) audit report titled Audit of NRC’s 

Regulatory Analysis Process.

The report presents the results of the subject audit. Following the June 18, 2015, exit 

conference, agency staff indicated that they had no formal comments for inclusion in 

this report.

Please provide information on actions taken or planned on each of the 

recommendations within 30 days of the date of this memorandum. Actions taken or 

planned are subject to OIG followup as stated in Management Directive 6.1.

We appreciate the cooperation extended to us by members of your staff during the 

audit. If you have any questions or comments about our report, please contact me at 

(301) 415-5915 or Eric Rivera, Team Leader, at (301) 415-7032.

Attachment: As stated
Office of the Inspector General

U.S. Nuclear Regulatory Commission

Defense Nuclear Facilities Safety Board

Results in Brief

Audit of NRC’s Regulatory Analysis Process

What We Found

The agency’s knowledge management techniques for 

regulatory analysis need improvement. NRC has a limited 

number of staff with cost estimating experience in regulatory 

analysis. The Office of Nuclear Reactor Regulation and the 

Office of Nuclear Material Safety and Safeguards each have 

one experienced person. The agency may be vulnerable to 

errors, delays, wasted effort, and flawed decisionmaking 

because of the limited experience of its cost estimators. It 

also increases the potential to make less than optimal 

rulemaking decisions because the NRC Commission uses 

regulatory analysis to determine whether to move forward with 

rulemaking.

In addition, the agency does not consistently document 

stakeholder input prior to the proposed rule stage. Rules may 

take several years between initiation and publication of the final 

rule. The project manager who initiates the rule is generally 

not the project manager who oversees publication of the final 

rule. Accordingly, new project managers may not have all the 

information they need to complete their job, may duplicate 

efforts, and the agency may not be fully informed when making 

rulemaking decisions. 

What We Recommend

The report makes recommendations to improve the regulatory 

analysis process.

Why We Did This Review

The Atomic Energy Act of 

1954, as amended (42 U.S.C. 

2011), and Energy 

Reorganization Act of 1974, 

authorize the Nuclear 

Regulatory Commission (NRC) 

to develop regulations that 

licensees must follow to protect 

public health and safety and 

the environment, and to 

promote the common defense 

and security. 

NRC is authorized to establish 

by rule, regulation, or order, 

such standards and instructions 

to govern the possession and 

use of special nuclear, source, 

and byproduct material. NRC 

uses regulatory analyses to 

evaluate proposed rulemaking 

actions to protect public health 

and safety.

NRC does not have a statutory 

mandate to conduct regulatory 

analyses, but voluntarily began 

performing them in 1976 to 

help ensure that its decisions to 

impose regulatory burdens on 

licensees are based on 

adequate information.

The audit objective was to 

determine the adequacy of 

NRC’s regulatory analysis 

process.

OIG-15-A-15

June 24, 2015
Audit of NRC’s Regulatory Analysis Process

ABBREVIATIONS AND ACRONYMS .......................................................... i

I. BACKGROUND ................................................................................1

II. OBJECTIVE......................................................................................5

III. FINDINGS.........................................................................................5

A. Limited Experienced Cost Analysts (Estimators) ...................6

Recommendations ...............................................................10

B. Inconsistent Documentation ................................................11

Recommendation.................................................................13

IV. CONSOLIDATED LIST OF RECOMMENDATIONS.......................14

V. AGENCY COMMENTS...................................................................15

APPENDIXES 

A. OBJECTIVE, SCOPE, AND METHODOLOGY...............................16

B. Public Participation in NRC Meetings .............................................19

TO REPORT FRAUD, WASTE, OR ABUSE .............................................22

COMMENTS AND SUGGESTIONS..........................................................22

 TABLE OF CONTENTS
Audit of NRC’s Regulatory Analysis Process

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ADAMS Agencywide Documents Access and Management System 

CER Cumulative Effects of Regulation

FTE full-time equivalents

GAO U.S. Government Accountability Office

NMSS Office of Nuclear Material Safety and Safeguards

NRC Nuclear Regulatory Commission

NRR Office of Nuclear Reactor Regulation

OIG Office of the Inspector General

OMB Office of Management and Budget

SECY Office of the Secretary

 ABBREVIATIONS AND ACRONYMS
Audit of NRC’s Regulatory Analysis Process

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The Atomic Energy Act of 1954, as amended (42 U.S.C. 2011), and 

Energy Reorganization Act of 1974, authorize the Nuclear Regulatory 

Commission (NRC) to develop regulations that licensees1 must follow to 

protect public health and safety and the environment, and to promote the 

common defense and security. NRC is authorized to establish by rule, 

regulation, or order, such standards and instructions to govern the 

possession and use of special nuclear, source, and byproduct material. 

NRC uses regulatory analysis to evaluate proposed rulemaking actions to 

protect public health and safety. These evaluations support the staff and 

the Commission in (1) determining whether the proposed actions are 

needed, (2) providing adequate justification for the proposed action, and 

(3) documenting a clear explanation of why a particular action was 

recommended. NRC does not have a statutory mandate to conduct 

regulatory analyses but voluntarily began performing them in 1976 to help 

ensure that its decisions to impose regulatory burdens on licensees are

based on adequate information. 

Office of Management and Budget (OMB) Memorandum, Cumulative 

Effects of Regulations, dated March 20, 2012, was issued to improve 

regulation and regulatory review by ensuring that, to the extent permitted 

by law, agencies take into account the costs of cumulative regulations. 

 

1

A company, organization, institution, or other entity to which NRC or an Agreement State has granted a

general license or specific license to construct or operate a nuclear facility, or to receive, possess, use, 

transfer, or dispose of source material, byproduct material, or special nuclear material. 

 I. BACKGROUND
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While NRC is not required to comply with this guidance, the agency 

implemented the steps suggested in the guidance through existing NRC 

processes.

NRC Guidance

Management Directive 6.3, The Rulemaking Process, July 22, 2013, 

communicates NRC’s policy and commitment to develop high quality rules 

that are consistent with laws and regulatory requirements. This expresses 

NRC’s intent to conduct rulemakings using an effective, efficient process 

that is open to the public and affords an opportunity for meaningful 

stakeholder participation in rulemaking proceedings. It also contains 

general organizational responsibilities for NRC components concerning 

the rulemaking process.

The following agency documents also provide guidance on regulatory 

analysis:

1. NUREG/BR-0058, Revision 4, Regulatory Analysis Guidelines of the 

U.S. Nuclear Regulatory Commission, September 2004, establishes a 

framework for regulatory analysis. These guidelines convey the 

agency’s policy for the preparation and content of regulatory analyses, 

and contain a number of policy decisions that have broad implications 

for NRC, licensees, and the protection of public health and safety.

2. NUREG/BR-0184, Regulatory Analysis Technical Evaluation 

Handbook, January 1997, provides guidance for NRC regulatory 

analysts to promote preparation of quality regulatory analysis 

documents and to implement the policies of NUREG/BR-0058. It 

contains policy, concepts, and guidelines, and describes the six steps 

to preparing regulatory analyses. The Handbook also provides 

standardized methods for preparation and presentation of regulatory 

analyses. It states that NRC intends to periodically revise the 

Handbook as new and improved guidance, information, and methods 

become available.

Regulatory Analysis Process

NRC’s regulatory analysis process includes six steps (see Figure 1) to 

ensure that the agency bases its decisions on adequate information
Audit of NRC’s Regulatory Analysis Process

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derived through a systematic and disciplined process that is open and 

transparent. 

Figure 1: The Regulatory Analysis Process

Source: OIG generated

A regulatory analysis is not necessary for all rulemaking actions. For 

instance, regulatory analysis is not completed when staff initiate generic 

actions2including notices, policy statements, and generic letters that only 

transmit information and do not present new or revised staff positions, 

impose requirements, or recommend action. Regulatory analysis is also

unnecessary in response to a congressional statute requiring new 

regulatory requirements and administrative or direct final rules.3

Regulatory analysis occurs in each phase of the rulemaking process. A 

preliminary draft regulatory analysis is conducted during the regulatory 

basis phase,4a draft regulatory analysis during the proposed rule phase, 

and a final regulatory analysis during the final rule phase.

 

2

Those actions that affect all, several, or a class of licensees.

3

A rule that does not contain significant technical or policy issues and is considered to be noncontroversial. 

4

The Office of Nuclear Material Safety and Safeguards considers the analysis prior to the proposed rule 

stage a general cost/benefit analysis rather than a regulatory analysis.
Audit of NRC’s Regulatory Analysis Process

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Cumulative Effects of Regulation (CER) Enhancements 

On March 2, 2011, NRC’s Executive Director for Operations issued 

Consideration of the Cumulative Effects of Regulation in the Rulemaking 

Process (SECY-11-0032). The Office of the Secretary (SECY) paper’s5

purpose was to inform the Commission of the staff’s plans to enhance 

NRC’s rulemaking process to enable explicit consideration of CER. The 

staff proposed instituting rulemaking process enhancements to include 

increased interaction with external stakeholders during the regulatory 

analysis process, issuance of draft and final supporting guidance with 

proposed and final rulemakings, and explicit stakeholder requests for CER 

feedback. 

SECY-12-0137, Implementation of the Cumulative Effects of Regulation 

Process Changes, October 5, 2012, represents a followup to the 

Commission’s direction in response to SECY-11-0032. It describes 

interactions with stakeholders throughout all stages of the rulemaking 

process, the impact of CER implementation on other regulatory actions, 

and the staff’s considerations of the need to quantify cumulative impacts 

of regulation. Steps 1-3 in Figure 1 are the points at which NRC solicits 

stakeholder input during the regulatory analysis process.

 

5

Policy, rulemaking, and adjudicatory matters, as well as general information, are provided to the 

Commission for consideration in a document style and format established specifically for the purpose.
Audit of NRC’s Regulatory Analysis Process

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 III. FINDINGS

Programmatic Responsibilities

NRC’s Office of Nuclear Reactor Regulation (NRR) develops regulatory 

analyses for the operating reactors and new reactors rulemakings, while 

the Office of Nuclear Material Safety and Safeguards (NMSS) develops 

regulatory analyses for nuclear material, fuel facility, spent fuel storage 

and transportation, decommissioning and low-level waste rulemakings.

NRR’s Policy and Rulemaking Branch has a total of seven full-time 

equivalents (FTE) for its Regulatory Analysis Team, including five cost 

estimators and two project managers. Currently there are four cost 

estimator vacancies on that team and the agency is actively trying to fill 

those positions.

NMSS Rulemaking and Project Management Branch has 1 FTE dedicated 

to developing regulatory analyses. The staff member currently in this 

position has been in the position for over five years.

The audit objective was to determine the adequacy of NRC’s regulatory 

analysis process. Appendix A contains information on the audit scope and 

methodology.

NRC has initiated steps to improve the adequacy of the regulatory 

analysis process. Specifically, through implementation of CER processes, 

the agency solicits stakeholder input during the regulatory analysis 

process to help resolve issues that can lead to rulemaking implementation 

challenges. However, more needs to be done in the area of knowledge 

management. Specifically, 

 II. OBJECTIVE
Audit of NRC’s Regulatory Analysis Process

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A. There is a limited number of staff with cost estimating experience.

B. There is inconsistent documentation of stakeholder input.

A. Limited Experienced Cost Analysts (Estimators)

NRC has a limited number of staff with cost estimating experience in

regulatory analysis. This occurred because NRC (1) lacks a formal 

comprehensive cost estimator training/qualification program, (2) has not

implemented established knowledge management techniques, and (3) has 

outdated cost estimating guidance. Limited experienced cost estimators 

may result in increased vulnerability to errors, delays, wasted effort, and 

flawed decisionmaking. This could also challenge the agency in fulfilling 

its regulatory mission.

Federal and agency standards require that management train employees, 

employ knowledge management techniques, and document internal 

controls.

Federal Standards 

The U.S. Government Accountability Office (GAO) Standards for Internal 

Control in the Federal Government advises that management demonstrate 

a commitment to recruit, develop, train, and retain competent personnel to 

achieve an agency’s objectives. In addition, management should enable 

individuals to develop competencies appropriate for key roles, and tailor 

training based on the needs of the role. Targeted training can and does 

improve performance and productivity. Moreover, training demonstrates

to workers that their employer values them enough to invest in them, 

which improves loyalty and retention.

These standards also provide that management define succession plans 

for key roles, and chooses and trains succession candidates to assume 

key roles. These management responsibilities help the organization 

continue to achieve its objectives and mission. Most importantly, 

succession plans help to address the organization’s need to replace, on a 

timely basis, competent personnel over the long term.

What Is Required
Audit of NRC’s Regulatory Analysis Process

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GAO standards also state that documentation represents a necessary part 

of effective internal control and is required for the efficient implementation 

and operating effectiveness of an organization. Documenting policies and 

procedures helps organizations maintain knowledge and mitigate the risk 

of having that knowledge limited to only a few employees. Moreover, 

management should periodically review policies and procedures for 

continued relevance and effectiveness. When there is a significant 

change in the process, management should review this process in a timely 

manner after the change and document the change.

NRC Guidance 

NRC maintains a knowledge management Web site to improve 

information sharing and provides techniques that can be used within and 

outside the agency to capture relevant critical knowledge from existing 

staff and employees departing the agency. The site emphasizes that 

(1) where possible, the agency should recapture knowledge from former 

employees, and (2) throughout an NRC employee’s career, the employee 

should keep learning and pass knowledge and experience on to others. 

This site stresses that a loss of critical knowledge could challenge the 

agency and office in fulfilling its mission. Additionally, this site contains 

valuable established knowledge management techniques.

NRR Office Instruction ADM-504, Revision 3, Qualification Program,

effective February 16, 2015, states, “It is the policy of NRR that the 

qualification program shall be maintained to ensure the program reflects 

the skills needed for NRR to fulfill its mission.” This formal program 

includes some of the following NRR positions: Reliability and Risk 

Analysts, Rulemaking Project Managers, License Renewal Project 

Managers, and Operating Reactor Licensing Project Managers. The 

Office Instruction states it is NRR’s policy that employees possess the 

knowledge and skills necessary to effectively perform regulatory activities 

in their position. The guidance provides that one way the knowledge and 

skills for regulatory activities can be obtained is through formal training.

NMSS DILR SG 2, Division of Intergovernmental Liaison and Rulemaking 

Staff Guidance, Rulemaking Project Manager Training Plan provides the 

project manager with information to perform various policy and rulemaking 

activities. The plan includes sections on regulatory analysis, but it does 
Audit of NRC’s Regulatory Analysis Process

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not contain a separate training plan or qualification program for cost 

estimators.

NRC has a limited number of staff with cost estimating experience in

regulatory analysis. NRR’s Policy and Rulemaking Branch, Regulatory 

Analysis Team, currently comprises one experienced cost estimator who 

is eligible to retire (team leader), one experienced project manager, and 

one new project manager.

6

 This team is authorized seven FTE’s, and is

actively engaged in the hiring process. It is envisioned that after filling 

available vacancies, the composition of the Regulatory Analysis Team will 

be two project managers, four cost analysts, and the team leader (cost 

analyst) for a total of seven. NMSS has one FTE to conduct regulatory 

analysis cost estimates.

NRC has a limited number of staff with cost estimating experience 

because (1) the agency has no formal comprehensive cost estimator 

training/qualification program, (2) it does not implement or practice 

established knowledge management techniques, and (3) cost benefit 

guidance documents are outdated.

No Formal Comprehensive Training/Qualification Program 

NRC does not have a formal comprehensive training program for cost 

estimators. Although NRR Office Instruction ADM-504 describes a 

qualification program for various NRR positions, the positions do not 

include cost estimators working on regulatory analysis. 

NRR and NMSS staff and managers described several measures used for 

training cost estimators, but these measures do not constitute a formal or 

comprehensive approach. For example, the NRR regulatory analysis

team leader provides training for rulemaking and regulatory analysis. For 

 

6 During this audit, there was one new cost analyst who left the agency and one cost analyst who 

was on a 3-month rotation. The rotation ended March 6, 2015, and that employee did not stay in 

NRR. 

What We Found

Why This Occurred
Audit of NRC’s Regulatory Analysis Process

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study activities the team lead provides a scenario to the staff, then asks 

challenge questions to test their level of understanding. NRR has 

developed and maintained training videotapes on subjects such as writing 

regulations, a knowledge management strategy that has proven useful to 

staff. However, this practice stopped when NRR lost its one FTE 

dedicated to training because of the Transforming Assets into Business 

Solutions effort.

7

 After Office of the Inspector General (OIG) inquiries, 

NRR was able to locate some of the training tapes.

In addition, cost estimators maintain training journals or logs to record 

their reading assignments and other training; however, this is not practiced 

consistently. OIG reviewed the logs of two cost analysts and noted they 

were either blank or identified tasks but not the completion of tasks. 

NMSS currently has a training plan for rulemaking project managers. This 

plan includes some emphasis on regulatory analysis. However, NMSS 

and other NRC offices with regulatory analysis responsibilities would 

benefit from a more comprehensive regulatory analysis 

training/qualification program.

Established Knowledge Management Techniques Need Improvement

NRC knowledge management techniques could be improved for staff 

preparing regulatory analysis. In the past, NRC was able to hire

experienced experts directly from nuclear power plants and former 

licensees. These experts brought with them significant experience, which 

could be applied immediately to regulatory structures and thought 

processes used in rulemaking. These employees developed a core 

expertise for rulemaking and regulatory analysis within NRC; however, 

when these experienced employees retired, knowledge was not

transferred to other employees and knowledge management techniques 

were not employed. As a result, when new cost estimators are hired, 

there are only two senior staff members to mentor or pass on knowledge. 

 

7

The objectives of the Transforming Assets into Business Solutions effort were to (1) provide business 

solutions with a focus on enhancing performance while reducing overhead; (2) eliminate unnecessary 

duplication and increase centralization to improve the delivery of services; and (3) provide short- and 

long-term recommendations that would result in more efficient use of agency overhead resources.
Audit of NRC’s Regulatory Analysis Process

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Outdated Cost-Benefit Guidance Documents

The following NRC cost-benefit guidance documents related to regulatory 

analysis need to be updated: (1) NUREG/BR-0058, Revision 4, 

Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory 

Commission, September 2004, and (2) NUREG/BR-0184, Regulatory 

Analysis Technical Evaluation Handbook, January 1997. Both documents 

represent the cornerstone of NRC’s cost-benefit guidance. However, 

these documents do not reflect current methods and tools related to 

performing regulatory analyses.

On January 2, 2014, NRC staff issued SECY-14-0002, Plan for Updating 

the U.S. Nuclear Regulatory Commission’s Cost-Benefit Guidance. The 

staff recommendation is to implement a two-phased approach to revise 

these guidance documents. Phase 1 was scheduled for completion 

between January 2014 and August 2015, and Phase 2 between 

June 2014 and July 2018.8 One of the reasons this update was delayed, 

is because of limited resources. OIG was informed that Phase 1 might be 

completed by the end of fiscal year 2015.

The agency may be vulnerable to errors, delays, wasted effort, and flawed 

decisionmaking because of the limited experience of its cost estimators. 

It also increases the potential to make less than optimal rulemaking 

decisions because the NRC Commission uses regulatory analysis to 

determine whether to move forward with a given rulemaking.

Recommendations

OIG recommends that the Executive Director for Operations

1. Develop and implement a formal training/qualification program for 

cost estimators. This training/qualification program can be 

incorporated into the office instructions and procedures of the NRC 

offices with regulatory analysis responsibilities. 

 

8

SECY-14-0002 states that the milestone dates provided are estimates and may depend on availability of 

resources and Commission direction.

Why This Is Important
Audit of NRC’s Regulatory Analysis Process

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2. Implement established knowledge management techniques for the 

regulatory analysis program.

3. Update and implement the cost benefit guidance documents as 

planned in SECY-14-0002. Incorporate this guidance into office 

procedures by reference.

B. Inconsistent Documentation

The agency does not consistently document stakeholder input prior to the 

proposed rule stage. This occurs because NRC’s rulemaking office 

procedures that require stakeholder input prior to the proposed rule stage 

do not describe how to document that input. As a result, there is a 

potential for information gathered during the regulatory analysis process to 

be lost, duplicated, or not fully considered by agency staff.

Federal Standards

GAO’s Standards for Internal Control in the Federal Government convey 

that documentation is a means to retain organizational knowledge and 

mitigate the risk of having that knowledge limited to a few personnel. The 

standards also advise that management periodically review policies and 

procedures for continued relevance and effectiveness. If there is a 

significant change in the entity's process, management reviews this 

process in a timely manner after the change.

NRC Guidance

NRC’s newly created knowledge management Web site provides 

employees with established techniques so that knowledge can be 

transferred to employees who need it to successfully accomplish agency 

objectives. 

What Is Required
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Additionally, agency CER procedures require solicitation of stakeholder 

input prior to the proposed rule stage9and give staff the flexibility to 

determine how, and under what circumstances, it will interact with external 

stakeholders. 

The agency does not consistently document stakeholder input prior to the 

proposed rule stage. Rules may take several years between initiation and

the publication of the final rule. For example, the Performance Based 

Emergency Core Cooling Systems Acceptance Criteria (10 Code of 

Federal Regulations 50.46c Fuel Cladding)/Part 50 rule was initiated in 

August 2008, and the final rule is expected to be published in February 

2017.

The project manager who initiates the rule is generally not the project 

manager who oversees publication of the final rule. For example, the 

Containment Protection and Release Reduction Rule was initiated in 

2011. During the development of this rule, there were 2 different project 

managers who, together, conducted 13 public meetings. One of the 

meetings was classified as a Category 3 meeting10 and was transcribed. 

The other meetings were classified as either Category 1 or 2 and two were 

transcribed. Although a meeting summary was documented in all cases, 

meeting summaries may not include specific information regarding 

stakeholder input. 

Conversely, the Mitigation of Beyond-Design-Basis Events rulemaking

was initiated in 2012 and there has been one project manager. Out of 12 

public meetings, one Category 3 public meeting was conducted and 

transcribed. NRR also solicited stakeholder input via an Advanced Notice 

of Proposed Rulemaking.

11 NRC’s practice is to document all comments 

 

9

Per Federal regulations, all comments obtained during the proposed rule stage are retained and publicly 

available through NRC’s document management system or www.regulations.gov. Input obtained prior to 

the proposed rule stage is not required to be publicly available.

10 See Appendix B for a full description of Category 1, 2, and 3 meetings.

11 A formal method of soliciting early public involvement in the rulemaking process. 

What We Found
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received in response to an Advanced Notice of Proposed Rulemaking in 

both Regulations.gov and NRC’s document management system. 

Office procedures that require solicitation of stakeholder input prior to the 

proposed rule do not describe how to document that input. The 

procedures provide several means for staff to solicit stakeholder input 

such as conducting public meetings, posting the regulatory basis or

portions of it on regulations.gov, issuing Federal Register notices, or 

holding a Webinar or some equivalent electronic interaction. However, 

they do not state how to document the input received.

Many rules may take several years from initiation to final rule issuance. 

Because of this, project managers often change during the course of a 

rulemaking. If the staff does not document stakeholder input prior to the 

proposed rule stage, staff new to the project may not have all the 

information they need to complete their job and they may duplicate efforts. 

Further, knowledge that was gained may be lost and the agency may not 

be fully informed when making rulemaking decisions. 

Recommendation

OIG recommends that the Executive Director for Operations

4. Develop and implement procedures to consistently document 

stakeholder input prior to the proposed rule stage.

Why This Occurred

Why This Is Important
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 IV. CONSOLIDATED LIST OF RECOMMENDATIONS

OIG recommends that the Executive Director for Operations

1. Develop and implement a formal training/qualification program for cost 

estimators. This training/qualification program can be incorporated into 

the office instructions and procedures of the NRC offices with regulatory 

analysis responsibilities. 

2. Implement established knowledge management techniques for the 

regulatory analysis program.

3. Update and implement the cost benefit guidance documents as planned in 

SECY-14-0002. Incorporate this guidance into office procedures by 

reference.

4. Develop and implement procedures to consistently document stakeholder 

input prior to the proposed rule stage. 
Audit of NRC’s Regulatory Analysis Process

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An exit conference was held with the agency on June 18, 2015. Prior to 

this meeting, agency management reviewed a discussion draft and 

provided comments that have been incorporated into this report as 

appropriate. As a result, agency management opted not to provide formal 

comments for inclusion in this report.

 V. AGENCY COMMENTS
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Appendix A

Objective

The audit objective was to determine the adequacy of NRC’s regulatory 

analysis process.

Scope

This audit focused on assessing the adequacy of NRC’s regulatory 

analysis process, which involves estimation and evaluation of benefits and 

costs. During this audit, OIG did not calculate or recalculate any cost 

benefit analyses. OIG requested and analyzed information from the 

agency for specific rulemaking activities with specific timeframes. At the 

agency’s request, the audit scope was limited to regulatory analyses that 

started after implementation of the CER process, March 2, 2011. There 

were approximately seven regulatory analyses initiated after that date.

We conducted this performance audit at NRC headquarters in Rockville, 

Maryland, from October 2014 through April 2015. OIG reviewed and 

analyzed internal controls related to the audit objectives. Throughout the 

audit, auditors were aware of the possibility of fraud, waste, and abuse in 

the program.

Methodology

OIG reviewed relevant laws, regulations, and guidance, including OMB

Circular No. A-4, Regulatory Analysis; OMB Memorandum, Cumulative 

Effects of Regulation; the Atomic Energy Act of 1954, as amended; Public 

Law 83-703, Administrative Procedures Act; Unfunded Mandates Reform 

Act; Regulatory Flexibility Act; Congressional Review Act; National 

Environmental Policy Act; Paperwork Reduction Act; and the Energy 

Reorganization Act. We also reviewed the following Federal Executive 

Orders and NRC Management Directives for specific information:

 OBJECTIVE, SCOPE, AND METHODOLOGY
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Executive

Order Title

12866 Regulatory Planning and Review

13422 Further Amendment to Executive Order 12866

13563 Improving Regulation and Regulatory Review

Management

Directive Title

6.3 The Rulemaking Process

6.6 Regulatory Guides

8.4 Management of Facility-Specific Backfitting and Information 

Collection

OIG reviewed agency guidance and documents, including NRR Office 

Instruction No. LIC-300, Revision 4, Rulemaking Procedures; Office of 

Federal and State Materials and Environmental Management Program’s 

Policy and Procedure 6-10, Revision 2, FSME Procedures for Preparation 

and Review of Rulemaking Packages; NMSS DILR SG 2, Division of 

Intergovernmental Liaison and Rulemaking Staff Guidance, Rulemaking 

Project Manager Training Plan; NRR Office Instruction ADM-504, Revision 

3, Qualification Program; the Rulemaking Process Improvement Task 

Force Final Report to the Rulemaking Coordinating Committee; the 

2014-2015 Rulemaking Activity Plan; and NRC’s Public Meeting Policy. 

OIG reviewed NRC’s Rulemaker Web page and Knowledge Management 

Web sites. In addition, OIG reviewed the following NUREGs and SECY 

documents for specific information:

NUREG

Number Title

BR-0058 Regulatory Analysis Guidelines of the U.S. Nuclear 

Regulatory Commission

BR-0184 Regulatory Analysis Technical Evaluation Handbook

SECY

Number Title

14-0002 Plan for Updating the U.S. Nuclear Regulatory Commission’s 

Cost-Benefit Guidance

11-0032 Consideration of the Cumulative Effects of Regulation in the 

Rulemaking Process
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12-0137 Implementation of the Cumulative Effects of Regulation 

(CER) Process Changes

OIG reviewed the Nuclear Energy Institute’s Cumulative Impact Case 

Study Analysis and Recommendations that analyzed the costs of three 

NRC regulations that were estimated by the agency and compared to the 

actual costs spent by the industry. We also reviewed various guidance 

and audit reports for relevant information issued by GAO, the U.S.

Securities and Exchange Commission, and the Federal Deposit Insurance 

Corporation. OIG also attended four Advisory Committee on Reactor 

Safeguards meetings specific to the rulemaking process.

OIG interviewed staff from NRR, NMSS, SECY, Office of Administration, 

and the Office of the Chief Human Capital Officer. In addition, OIG 

interviewed Nuclear Energy Institute officials and an official from the 

nuclear industry.

OIG performed benchmarking exercises with Securities and Exchange 

Commission, the Environmental Protection Agency, and the Federal 

Energy Regulatory Commission to identify best practices and lessons 

learned. Following the exercises, OIG shared relevant information with 

the agency. 

The audit team participated in basic and advanced rulemaking courses 

presented by NRC staff. Following the training, and at OIG’s request, 

NRR, NMSS, Office of New Reactors, and Office of the Chief Financial 

Officer, provided an overview meeting and presentation to the audit team 

on NRC’s regulatory analysis program.

We conducted this performance audit in accordance with generally 

accepted Government auditing standards. Those standards require that 

we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our 

audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our audit 

objectives.

The audit was conducted by Eric Rivera, Team Leader; Kevin Nietmann, 

Senior Technical Advisor; Terri Cooper, Audit Manager; Gail Butler, Senior 

Auditor; and Michael Steinberg, Senior Auditor.
Audit of NRC’s Regulatory Analysis Process

19

Appendix B

Public Participation in NRC Meetings

Category Description Meeting Purpose ExamplesLevel of Public 

Participation

Types of 

Information 

Provided Followup

1 Typically held 

with one 

licensee, 

vendor, 

applicant, or

potential 

applicant to 

discuss 

particular 

regulatory 

issues. 

To discuss one 

particular facility or 

site, or certified 

system or device, 

with an applicant or 

licensee regarding, 

for example, 

technical issues in 

an application, 

licensee actions, or 

inspection results.

(At this type of 

meeting, NRC 

anticipates that the 

public would obtain 

factual information to 

assist in their 

understanding of the 

applicable regulatory 

issues and NRC 

actions.)

Annual public 

meetings to 

discuss such 

items as plant 

performance, 

regulatory, 

predecisional, or 

enforcement 

conferences, 

meetings held 

prior to a facility 

restarting, as well 

as meetings held 

on licensing 

actions (or 

applications).

The public is invited 

to observe the 

meeting consistent 

with past practice, 

and the public has

the opportunity to 

communicate with 

the NRC after the 

business portion of 

the meeting, but 

before the meeting 

is adjourned. This 

does not preclude 

the licensee from 

responding to 

questions if they 

choose to do so.

For meetings longer 

than 2 hours, one or 

more opportunities 

may be provided for 

the public to ask 

questions before the 

end of the meeting, 

if practicable.

At a minimum, an 

agenda or a list of 

items to be 

discussed will be 

entered into 

Agencywide 

Documents Access 

and Management 

System (ADAMS). 

The ADAMS 

document 

accession number 

would be provided 

in the meeting 

notice that is 

posted at NRC’s 

public Web site for 

access to any 

primary or 

background 

documents.

No formal followup will be 

provided beyond the normal 

period for questions. Informal 

followup (telephone or e-mail) 

may be appropriate for certain 

questions that cannot be 

answered at the meeting.

The public also has the option

of writing or emailing the staff 

about particular concerns. 

These concerns will be 

considered by the staff as it 

deliberates on the issue. 

Feedback forms would also 

be provided at this type of 

meeting, so that comments 

can be reviewed and offices 

can track any planned 

improvements or resulting 

actions in their operating 

plans, as appropriate. 

Meeting summaries and 

participant lists will be publicly 

available in ADAMS. 

Source: OIG generated based on information from NRC’s Public Meeting Web Site
Audit of NRC’s Regulatory Analysis Process

20

Category Description Meeting Purpose ExamplesLevel of Public 

Participation

Types of 

Information 

Provided Followup

2 Typically held 

with a group of 

industry 

representatives, 

licensees, 

vendors or nongovernmental 

organizations.

For NRC to obtain 

feedback from the 

regulated 

community and 

other external 

stakeholders on 

issues that could 

potentially affect 

more than one 

licensee. 

At this type of 

meeting, NRC 

anticipates that the 

public would obtain 

factual information 

and provide the 

agency with 

feedback on the 

analysis of the 

issues, alternatives 

and/or decisions.

Includes task 

force and industry 

groups (such as 

NEI or owners 

groups), or public 

interest and 

citizen group 

discussions that 

focus on issues 

that could apply to 

several facilities, 

such as plant 

system aging, 

license renewal, 

decommissioning, 

or spent fuel 

storage.

The public is invited 

to discuss regulatory

issues with the 

agency at 

designated points 

identified on the 

agenda. 

Generally, there will 

be more 

opportunities 

provided for the 

public to ask 

questions and 

provide comments 

at a meeting of this 

type than at a 

Category 1 meeting.

An agenda, names 

of participants, and 

background 

documents will be 

entered into 

ADAMS, and the 

accession number 

will be provided in 

the meeting notice. 

A Web page with 

links to other 

appropriate 

background 

information will be 

made available at 

NRC’s discretion. 

The ADAMS 

package and any 

link to a Web page 

will be at NRC’s 

public Web site.

Staff will provide answers to 

questions as appropriate 

during the meeting. Questions 

that cannot be answered at the 

meeting will be assigned to a 

designated staff person as an 

action item. Meeting 

summaries or any transcripts 

and participant lists would be 

provided in ADAMS and on the 

agency’s public Web site.

If a Web site is established,

feedback forms will be 

provided as they are in 

Category 1 meetings, so that 

comments can be reviewed 

and offices can track any 

planned improvements or 

resulting actions in their 

operating plans, as 

appropriate.

Source: OIG generated based on information from NRC’s Public Meeting Web Site
Audit of NRC’s Regulatory Analysis Process

21

Category Description Meeting Purpose ExamplesLevel of Public 

Participation

Types of 

Information 

Provided Followup

3 Typically held 

with 

representatives 

of nongovernment 

organizations, 

private citizens, 

interested 

parties, or 

various 

businesses or 

industries 

(other than 

those covered 

under 

Category 2) to 

fully engage 

them in a 

discussion on 

regulatory

issues.

To maximize 

discussions with 

the public to ensure 

that their issues 

and concerns are 

presented, 

understood and 

considered. NRC 

anticipates that the 

public would work 

with the agency to 

facilitate the widest 

exchange of 

information, views, 

concerns and 

suggestions with 

regard to licensespecific or generic 

regulatory issues.

Town hall or 

roundtable 

discussions, 

Environmental 

Impact Statement 

scoping meetings, 

workshops, the 

RIC, the Nuclear 

Safety Research 

Conference, or 

proposed 

rulemaking

meetings.

Public participation 

is actively sought at 

this type of meeting, 

which has the widest 

participation 

opportunities and is 

specifically tailored 

for the public to 

comment and ask 

questions 

throughout the 

meeting.

An agenda, names 

of participants, and 

background 

documents will be 

entered into 

ADAMS. A Web 

page will be 

created for all 

relevant documents 

and a link to the 

required Web page 

on the public Web 

site.

Staff followup is similar to 

Category 2, but meeting 

summaries or transcripts and 

participant lists will be 

provided in ADAMS and linked 

to the Web site. Feedback 

forms will also be provided at 

this level meeting.

Source: OIG generated based on information from NRC’s Public Meeting Web Site
Audit of NRC’s Regulatory Analysis Process

22

 TO REPORT FRAUD, WASTE, OR ABUSE

 COMMENTS AND SUGGESTIONS

Please Contact:

Email: Online Form

Telephone: 1-800-233-3497

TDD 1-800-270-2787

Address: U.S. Nuclear Regulatory Commission

Office of the Inspector General

Hotline Program

Mail Stop O5-E13

11555 Rockville Pike

Rockville, MD 20852

If you wish to provide comments on this report, please email OIG using this link.

In addition, if you have suggestions for future OIG audits, please provide them using 

this link.