AUDIT REPORT 

Audit of NRC’s Physical Security 

Inspection Program for Category I 

Fuel Cycle Facilities 

OIG-10-A-01 November 3, 2009 

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 

 November 3, 2009 

MEMORANDUM TO: R. William Borchardt 

Executive Director for Operations 

 

FROM: Stephen D. Dingbaum /RA/ 

Assistant Inspector General for Audits 

SUBJECT: AUDIT OF NRC’S PHYSICAL SECURITY INSPECTION 

PROGRAM FOR CATEGORY I FUEL 

CYCLE FACILITIES (OIG-10-A-01) 

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

Physical Security Inspection Program for Category I Fuel Cycle Facilities.

The report presents the results of the subject audit. Agency comments provided during 

and subsequent to an August 26, 2009, exit conference have been incorporated, as 

appropriate, into 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 

415-5915 or Beth Serepca, Team Leader, at 415-5911. 

Attachment: As stated 
Electronic Distribution

Edwin M. Hackett, Executive Director, Advisory Committee on Reactor 

 Safeguards 

E. Roy Hawkens, Chief Administrative Judge, Atomic Safety and 

 Licensing Board Panel 

Stephen G. Burns, General Counsel 

Brooke D. Poole, Jr., Director, Office of Commission Appellate Adjudication 

James E. Dyer, Chief Financial Officer 

Margaret M. Doane, Director, Office of International Programs 

Rebecca L. Schmidt, Director, Office of Congressional Affairs 

Eliot B. Brenner, Director, Office of Public Affairs 

Annette Vietti-Cook, Secretary of the Commission 

R. William Borchardt, Executive Director for Operations 

Bruce S. Mallett, Deputy Executive Director for Reactor 

 and Preparedness Programs, OEDO 

Martin J. Virgilio, Deputy Executive Director for Materials, Waste, Research, 

 State, Tribal, and Compliance Programs, OEDO 

Darren B. Ash, Deputy Executive Director for Corporate Management 

 and Chief Information Officer, OEDO 

Nader L. Mamish, Assistant for Operations, OEDO 

Kathryn O. Greene, Director, Office of Administration 

Patrick D. Howard, Director, Computer Security Officer 

Roy P. Zimmerman, Director, Office of Enforcement 

Charles L. Miller, Director, Office of Federal and State Materials 

 and Environmental Management Programs 

Cheryl A. McCrary, Director, Office of Investigations 

Thomas M. Boyce, Director, Office of Information Services 

James F. McDermott, Director, Office of Human Resources 

Michael R. Johnson, Director, Office of New Reactors 

Michael F. Weber, Director, Office of Nuclear Material Safety and Safeguards 

Eric J. Leeds, Director, Office of Nuclear Reactor Regulation 

Brian W. Sheron, Director, Office of Nuclear Regulatory Research 

Corenthis B. Kelley, Director, Office of Small Business and Civil Rights 

James T. Wiggins, Director, Office of Nuclear Security and Incident Response 

Samuel J. Collins, Regional Administrator, Region I 

Luis A. Reyes, Regional Administrator, Region II 

Mark A. Satorius, Regional Administrator, Region III 

Elmo E. Collins, Jr., Regional Administrator, Region IV 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

i 

EXECUTIVE SUMMARY 

BACKGROUND

 

The Nuclear Regulatory Commission (NRC) oversees security 

programs at facilities that manufacture fuel for nuclear reactors. 

These fuel cycle facilities use “special nuclear materials” in the 

manufacturing process. NRC classifies special nuclear materials 

and the facilities that possess them into three categories based 

upon the materials’ potential for use in nuclear weapons, or 

“strategic significance.” The three categories are: 

 Category I: High strategic significance. 

 Category II: Moderate strategic significance. 

 Category III: Low strategic significance. 

Two fuel cycle facilities in the United States process Category I 

materials into nuclear fuel for the Federal Government. The U.S. 

Navy, in particular, uses this fuel in nuclear powered ships and 

submarines. There are no Category II fuel cycle facilities operating 

in the United States as of June 2009, and Category III facilities are 

subject to a different NRC physical security inspection regime than 

Category I facilities because these materials present less risk to 

public safety and security. 

The main objective of NRC’s oversight program for Category I fuel 

cycle facilities is to ensure that these facilities operate safely and 

securely in accordance with NRC requirements. Since the terrorist 

attacks of September 11, 2001, NRC has issued licensees new 

requirements and guidance to enhance security at Category I fuel 

cycle facilities against sabotage and theft of nuclear materials. 

PURPOSE

The objective of this audit was to assess the effectiveness of the 

NRC’s physical security inspection program over the protection and 

control of special nuclear material at Category I fuel cycle facilities.
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

ii

RESULTS IN BRIEF

The Office of Nuclear Security and Incident Response fulfills its 

responsibility to conduct physical security inspections at Category I 

fuel cycle facilities. However, the inspection program faces the 

following two challenges: 

 Need to provide physical security training for supervisors 

without previous security experience to enhance 

management oversight of inspections. 

 Inspection guidance has not undergone periodic review to ensure 

that it aligns with current NRC security guidance and 

requirements. 

RECOMMENDATIONS 

This report makes two recommendations to improve the agency’s 

physical security inspection program at Category I fuel cycle 

facilities. A consolidated list of these recommendations appears in 

Section V of this report. 

AGENCY COMMENTS 

At an August 26, 2009, exit conference, agency senior executives 

agreed to provide suggested revisions to the discussion draft report 

for the Office of the Inspector General’s (OIG) consideration. On 

September 1, 2009, NRC provided suggested report revisions, 

which served as a basis for further discussions between the agency 

and OIG. This final report incorporates revisions made, where 

appropriate, as a result of the agency’s suggestions. 

On September 25, 2009, the Executive Director for Operations 

provided a formal response to this report (see Appendix B). No 

additional changes were made to the report based on the agency’s 

formal response. OIG’s response to the agency’s formal comments 

is presented in Appendix C. 

 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

iii

ABBREVIATIONS AND ACRONYMS 

 

NRC Nuclear Regulatory Commission 

 NSIR Office of Nuclear Security and Incident Response 

OIG Office of the Inspector General 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

iv

[Page intentionally left blank.] 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

v

TABLE OF CONTENTS

EXECUTIVE SUMMARY...........................................................................i 

ABBREVIATIONS AND ACRONYMS ..................................................... iii 

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

II. PURPOSE........................................................................................3 

III. FINDINGS........................................................................................4 

A. NEED TO PROVIDE SECURITY TRAINING TO ENHANCE 

MANAGEMENT OVERSIGHT .......................................................4 

B. NRC HAS NOT CONDUCTED TIMELY REVIEWS OF INSPECTION 

GUIDANCE...............................................................................7 

IV. AGENCY COMMENTS ..................................................................10 

V. CONSOLIDATED LIST OF RECOMMENDATIONS ......................11 

APPENDICES 

A. SCOPE AND METHODOLOGY.....................................................13 

B. FORMAL AGENCY COMMENTS.................................................15 

C. OIG REPSONSE TO FORMAL AGENCY COMMENTS...............17 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

vi

[Page intentionally left blank.] 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

1

 I. BACKGROUND 

Category I Fuel Cycle Facility Inspections 

The Nuclear Regulatory Commission (NRC) oversees security 

programs at facilities that manufacture fuel for nuclear reactors. 

These fuel cycle facilities use “special nuclear materials” in the 

manufacturing process. NRC classifies special nuclear materials 

and the facilities that possess them in three categories, based upon 

the materials’ potential for use in nuclear weapons, or “strategic 

significance. The three categories are: 

 Category I: High strategic significance. 

 Category II: Moderate strategic significance. 

 Category III: Low strategic significance. 

Two fuel cycle facilities in the United States process Category I 

materials into nuclear fuel for the Federal Government. The U.S. 

Navy, in particular, uses this fuel in nuclear powered ships and 

submarines. There were no Category II fuel cycle facilities 

operating in the United States as of June 2009, and Category III 

facilities are subject to a different NRC physical security inspection 

regime than Category I facilities because these materials present 

less risk to public safety and security. This report focuses on 

NRC’s oversight of Category I fuel cycle facilities. 

 

Figure 1: Fuel cycle facility personnel processing uranium. 

 

Source: Babcock and Wilcox Nuclear Operations Group
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

2

The main objective of NRC’s oversight program for Category I fuel 

cycle facilities is to ensure that these facilities operate safely and 

securely in accordance with NRC requirements. Since the terrorist 

attacks of September 11, 2001, NRC has issued new requirements 

and guidance to licensees to enhance security at Category I fuel 

cycle facilities against sabotage and theft of nuclear materials. 

NRC employs resident inspectors at each Category I fuel cycle 

facility for general day-to-day oversight, while NRC regional 

physical security inspectors conduct inspections during routine site 

visits. 

 Inspection Process

NRC’s physical security inspection 

program requires three areas to be 

reviewed annually at each Category I fuel 

cycle facility.1 These areas, arranged by 

inspection procedure groupings called 

“suites,” are (1) Access Controls (2) 

Alarms and Barriers and (3) Other Security 

Areas.2 The three suites are composed of 

34 separate inspection procedures, which 

NRC staff use as guidance for conducting 

physical security inspections at Category I 

fuel cycle facilities. Each inspection 

procedure suite prescribes a specific 

number of hours to be worked during each 

annual or triennial inspection cycle. For 

instance, NRC inspectors plan to spend 

40 hours over a 12-month period 

assessing access controls, while 

transportation security is allocated 8 hours 

of inspection work over a 36-month 

period. Inspections are intended to 

evaluate security and compliance, identify 

deficiencies and determine their 

 

1

 Category I fuel cycle facilities undergo a triennial transportation security inspection conducted 

by NRC with the assistance of local law enforcement. In addition, NRC conducts triennial forceon-force inspections at these facilities. This audit did not examine force-on-force inspections at 

Category I fuel cycle facilities. 

2

 This includes inspections of security plans and implementing procedures, and personnel training 

and qualifications. 

Figure 2: Armed security 

officers safeguard fuel 

cycle facilities and are 

trained according to 

standards specified in 

Federal Government 

regulations. 

Source: Babcock and 

Wilcox Nuclear Operations 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

3

significance, assess licensee corrective actions, and document 

results. NRC reports the results of Category I facility inspections to 

Congress on an annual basis in accordance with the 2005 Energy 

Policy Act, and the licensees are given a copy of each inspection 

report after the inspection has occurred. 

Program Staffing and Resource Requirements 

The Office of Nuclear Security and Incident Response (NSIR) 

manages the fuel cycle facility physical security inspection program 

and is primarily responsible for reviewing and developing inspection 

guidance. Staff based in NRC’s Region II office conduct 

inspections, with one branch chief supervising two physical security 

inspectors.3 Physical security inspections at Category I facilities 

averaged approximately 1,057 hours of work per calendar year 

from 2007 to 2009.4 

II. PURPOSE

The audit objective was to assess the effectiveness of the physical 

security inspection program over the protection and control of 

special nuclear materials at Category I fuel cycle facilities. 

Appendix A contains information on the audit scope and 

methodology. 

 

3

 Triennial force-on-force inspections are managed by headquarters-based NSIR staff. 

4

 The average was based on projections for the remainder of FY 2009. Time spent includes 

inspection preparation and documentation work, in addition to onsite inspection hours. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

4

III. FINDINGS 

NSIR fulfills its responsibility to conduct physical security 

inspections at Category I fuel cycle facilities. However, the 

inspection program faces the following two challenges: 

 Need to provide physical security training for supervisor 

without previous security experience to enhance 

management oversight of inspections, and 

 Inspection guidance has not undergone periodic review to 

ensure that it aligns with current NRC security guidance and 

requirements. 

A. Security Training Would Enhance Management Oversight 

Federal Government internal control guidance recommends that 

agencies staff positions with qualified personnel and provide 

appropriate training. NRC branch chiefs play an important role in 

overseeing inspection activities; however, the branch chiefs 

responsible for fuel cycle facility physical security inspections are 

not required to have background experience or undergo training in 

this area. NRC opens branch chief positions to generalists to 

increase the pool of potential job candidates, and staff said that 

branch chiefs can learn through on-the-job training and that branch 

chiefs rely on inspectors for technical expertise. In addition, NRC 

seeks candidates who exhibit leadership and supervisory skills, as 

well as programmatic and regulatory knowledge. 

Without providing job-specific training to branch chiefs, NRC faces 

increased risk that branch chiefs might not be able to fulfill duties 

such as training new inspectors and reviewing inspection reports. 

Branch Chiefs Should Have Working Knowledge of Physical 

Security 

As a best practice, branch chiefs should have a working knowledge 

of physical security that enables them to ensure effective 

performance of their branch. This includes a thorough 

understanding of security planning, procedures, and equipment, 

and the employment of security personnel in safeguarding 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

5

Category I fuel cycle facilities. Understanding these issues is 

essential for inspectors as well as their branch chief supervisors to 

uphold NRC’s physical security oversight role. 

 Physical Security Experience and Training Not Required of 

Branch Chiefs 

Although branch chiefs play an important supervisory role, branch 

chiefs who oversee physical security inspections at Category I fuel 

cycle facilities are not required to have security experience as a 

prerequisite or to undergo physical security training. According to 

the job description, branch chiefs are responsible for a range of 

tasks, including assessing employee performance, training new 

inspectors, reviewing and approving work products, and informing 

regional and division management of significant issues. In addition, 

branch chiefs are expected to manage the branch’s technical 

experts, endorse inspection findings, and make recommendations 

to senior management for dealing with compliance issues and for 

revising NRC rules, regulations, and procedures. The current 

branch chief is a qualified reactor inspector and has NRC 

experience in licensing and incident response but has not worked 

on or undergone training in physical security at NRC.5

 This branch 

chief relies on experienced senior staff, including the inspectors he 

supervises, for technical expertise. Senior staff said this is standard 

NRC practice, and that branch chiefs are selected primarily for their 

leadership and management skills, as well as their fluency in NRC’s 

regulatory process. 

 Human Resource Practices Do Not Emphasize Security 

Experience and Training for Managers 

The lack of security-specific experience and training required for 

fuel cycle facility security branch chiefs is attributable to NRC hiring 

and staff development practices. When soliciting vacancy 

announcements to fill open branch chief positions, NRC does not 

list experience or expertise in physical security as a prerequisite or 

recommended skill set. NRC reportedly does this, in part, to 

increase the number of potential job candidates and to emphasize 

branch chiefs’ primary supervisory responsibilities and duties. 

Once hired, branch chiefs responsible for fuel cycle facility security 

 

5

 The current branch chief’s predecessor also had extensive experience at NRC, but not in 

physical security. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

6

are not required to undergo physical security training unlike those 

at nuclear plants.6 Senior regional managers told auditors that this 

situation was not problematic because they rely on branch chiefs 

mainly for their leadership and management skills. In addition, one 

manager said the branch chiefs are primarily responsible for 

supervising and advising staff and, therefore, must be familiar with 

NRC’s regulatory processes. 

Security Training for Branch Chiefs Would Enhance 

Management Oversight 

Although OIG found no evidence that the branch chiefs’ lack of 

security related experience and training has compromised security 

inspections at fuel cycle facilities, this situation presents two 

potential internal control challenges. First, if branch chiefs rely on 

the inspectors they oversee for technical expertise, this raises 

questions about their capacity to evaluate inspector performance 

and independently review and approve inspection reports. Second, 

one senior regional manager cited knowledge management as a 

primary concern, stating that loss of the senior physical security 

inspector assigned to fuel cycle facilities would pose a significant 

problem. Third, branch chiefs cannot reasonably be expected to 

train and advise physical security inspectors without possessing 

some degree of job-specific skills and knowledge. Staff told 

auditors that that branch chiefs can develop security expertise 

through on-the-job training. However, personnel turnover trends 

militate against this; five individuals have held the branch chief 

position over the past 7 years,7

 and none of these individuals has 

served more than 22 months in the position. 

 

Recommendation

 

 OIG recommends that the Executive Director for Operations: 

1. Provide appropriate security training for non-security personnel 

who have management responsibilities for physical security 

inspections at fuel cycle facilities. 

 

6

 Branch chiefs responsible for security oversight at nuclear power plants are required to take 

courses in physical security. NRC adopted this policy in response to an OIG audit 

recommendation that NRC develop and provide a security training program for non-security 

personnel with security oversight responsibilities. See OIG-06-A-21, Audit of NRC’s Baseline 

Security and Safeguards Inspection Program. 

7

 From July 2002 to July 2009. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

7

B. NRC Has Not Conducted Timely Reviews of Inspection 

Guidance

NRC guidance requires staff to review inspection policies and 

procedures at least once every 3 years and to revise them as 

necessary. However, guidance for fuel cycle facility security 

inspections has not undergone routine review and has not been 

revised to ensure that it is up to date. Inspection guidance reviews 

and revisions have not occurred because NRC has not dedicated 

resources for this work and the agency has reportedly deferred 

some guidance revision pending an ongoing security rulemaking. 

As a consequence, NRC lacks assurance that physical security 

inspections are conducted in accordance with current regulations 

and requirements, which has the potential to compromise the 

agency’s oversight function. 

 Inspection Guidance Should Undergo Periodic Review 

NRC guidance advises staff to review inspection policies and 

procedures at least once every 3 years and to revise them as 

necessary. NSIR is the program office that manages security 

inspections at fuel cycle facilities and has primary responsibility for 

updating inspection guidance. Regional offices are to provide 

technical experts to help review and revise the guidance. 

 Inspection Guidance Not Routinely Reviewed and Updated 

Guidance for fuel cycle facility physical security inspections has not 

undergone routine review and has not been revised to ensure that 

the guidance is up to date. Physical security inspectors and 

headquarters-based NSIR staff said there have been some efforts 

to revise inspection guidance, but acknowledged that this has not 

occurred in a systematic way. For example, 9 of 34 of the 

applicable inspection procedures were issued before 1987 and 

have not been updated. 

Moreover, staff recommended that reviews should address content 

gaps and overlaps among some inspection manual chapters and 

inspection procedures applicable to the program. Figure 1 shows 

the number of applicable inspection procedures by year of 

issuance. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

8

 Figure 1: Physical Security Inspection Procedures Issued from 1984 to 2008.

 

Number of Physical Security Inspection 

Procedures for Fuel Cycle Facilities

 (by Year Issued)

4

1

4

16

9

Issued 1984

Issued 1985

Issued 1986

Issued 2007

Issued 2008

 

 Resource Constraints Hinder Guidance Review 

NRC’s efforts to review and update inspection guidance have been 

limited by resource constraints. Regional inspectors have reviewed 

some guidance as a collateral duty, but have little time to devote to 

this work apart from their inspection responsibilities. NRC has 

reportedly not committed more personnel to inspection guidance 

revision because of a pending rulemaking that could have a major 

impact on fuel cycle facility oversight. However, NSIR planned to 

commit one staff member to conduct a guidance review at the 

Region II office during summer 2009.8

No Assurance That Inspection Guidance Reflects Current NRC 

Standards 

Without updating and revising physical security inspection guidance 

for Category I fuel cycle facilities, NRC lacks assurance that its 

inspections are conducted in accordance with current regulations 

 

8

 According to NSIR staff, nearly all fuel cycle facility security inspection procedures have been 

updated as of September 1, 2009, and are undergoing administrative review prior to issuance. In 

addition, NRC has undertaken a broad-reaching revision of the Fuel Cycle Oversight Process, 

which will require a future update of security inspection guidance. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

9

and requirements. NRC has issued new guidance and security 

orders to licensees since the terrorist attacks of September 11, 

2001, to reflect changing security conditions. Relying on outdated 

inspection guidance for agency staff creates the potential that 

physical security inspectors might overlook deficiencies in 

licensees’ security programs or licensees’ failure to comply with 

current NRC regulations and requirements, thereby compromising 

the agency’s oversight function. 

Recommendation

OIG recommends that the Executive Director for Operations: 

2. Review physical security inspection guidance periodically, and 

revise as necessary with an emphasis on currency and 

consistency. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

10

IV. AGENCY COMMENTS

At an August 26, 2009, exit conference, agency senior executives 

agreed to provide suggested revisions to the discussion draft report 

for the Office of the Inspector General’s (OIG) consideration. On 

September 1, 2009, NRC provided suggested report revisions, 

which served as a basis for further discussions between the agency 

and OIG. This final report incorporates revisions made, where 

appropriate, as a result of the agency’s suggestions. 

On September 25, 2009, the Executive Director for Operations 

provided a formal response to this report (see Appendix B). No 

changes were made to the report based on the agency’s formal 

response. OIG’s response to the agency’s formal comments is 

presented in Appendix C. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

11

V. CONSOLIDATED LIST OF RECOMMENDATIONS 

 OIG recommends that the Executive Director for Operations: 

1. Provide appropriate security training for non-security personnel 

who have management responsibilities for physical security 

inspections at fuel cycle facilities. 

2. Review physical security inspection guidance periodically, and 

revise as necessary with an emphasis on currency and 

consistency. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

12

[Page intentionally left blank.] 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

13

Appendix A 

SCOPE AND METHODOLOGY 

The audit objective was to assess the effectiveness of NRC’s 

physical security inspection program over the protection and control 

of special nuclear material at Category I fuel cycle facilities. 

Auditors reviewed and analyzed pertinent laws, regulations, 

authoritative guidance, NRC policies and procedures, and prior 

relevant NRC OIG reports. Guidance reviewed included the 

following: 

 GAO Standards for Internal Control in the Federal 

Government. 

 Inspection Manual Chapter 2600. 

 Inspection Manual Chapter 2681. 

OIG interviewed headquarters NSIR staff and conducted interviews 

at Region II, both in person and over the telephone to gain an 

understanding about the qualifications of the inspectors and 

management staff over physical security inspections. 

OIG observed physical security inspections at two Category I fuel 

cycle facilities: Nuclear Fuel Services, in Erwin, TN, and B&W 

Nuclear Operations Group in Lynchburg, VA. OIG interviewed both 

security inspectors as part of the observations. 

OIG conducted this audit between January 2009 and August 2009 

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 objective. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our 

audit objectives. 

The work was conducted by Beth Serepca, Team Leader; 

Terri Cooper, Audit Manager; Paul Rades, Audit Manager; 

Rob Woodward, Senior Auditor; and James McGaughey, Senior 

Analyst. 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

14

[Page intentionally left blank.] 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

15

Appendix B 

FORMAL AGENCY COMMENTS 
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

16
Audit of NRC’s Physical Security Inspection Program for Category I Fuel Cycle Facilities 

17

Appendix C 

OIG RESPONSE TO FORMAL AGENCY COMMENTS 

OIG does not deny the importance of management skills in 

selecting management candidates, nor does the report recommend 

that managers be selected solely on the basis of technical skills. 

Rather, OIG asserts that it is reasonable to expect managers to 

have a working knowledge of job-specific subject matter, and that 

NRC should provide appropriate training to managers to enter a 

field having no prior professional experience or formal training in 

that field.