AUDIT REPORT

Audit of NRC’s Oversight of Master Materials Licensees

OIG-11-A-14 June 22, 2011

All publicly available OIG reports 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 22, 2011

MEMORANDUM TO: R. William Borchardt

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits

SUBJECT: AUDIT OF NRC’S OVERSIGHT OF MASTER MATERIALS 

LICENSEES (OIG-11-A-14)

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

Oversight of Master Materials Licensees. 

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

a May 2, 2011, exit conference and an additional meeting with staff from the Office of 

the General Counsel on May 5, 2011, 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 Sherri Miotla, Team Leader, Nuclear Materials & Waste Safety Audit Team, 

at 415-5914.

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, Director, Office of Commission Appellate Adjudication

James E. Dyer, Chief Financial Officer

Hubert T. Bell, Inspector General

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

Michael F. Weber, Deputy Executive Director for Materials, Waste,

 Research, State, Tribal, and Compliance Programs, OEDO

Darren B. Ash, Deputy Executive Director 

 for Corporate Management, OEDO

Martin J. Virgilio, Deputy Executive Director for Reactor

 and Preparedness Programs, OEDO

Nader L. Mamish, Assistant for Operations, OEDO

Kathryn O. Greene, Director, Office of Administration

Patrick D. Howard, Director, Computer Security Office

Roy P. Zimmerman, Director, Office of Enforcement

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

 and Environmental Management Programs

Cheryl L. 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

Catherine Haney, 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

Marc L. Dapas, Acting 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 Oversight of Master Materials Licensees

i

EXECUTIVE SUMMARY

BACKGROUND

The Nuclear Regulatory Commission’s (NRC) mission is to regulate the 

Nation’s civilian use of byproduct, source, and special nuclear materials to 

ensure adequate protection of public health and safety, promote the 

common defense and security, and protect the environment. NRC 

regulates medical, industrial, and academic uses of nuclear materials 

through a combination of regulatory requirements, including licensing, 

inspection, and enforcement. NRC also issues Master Materials Licenses 

(MMLs) to Federal agencies.

An MML is a materials license issued to a Federal agency authorizing use 

of material at multiple sites that fall under the jurisdiction of the Federal 

agency. The MML allows the Federal agency to conduct some activities 

as a regulator, such as issuing permits for radioactive materials use at the 

sites that use materials (referred to as permittees), conducting 

inspections, handling allegations, following up on incidents and events, 

and taking enforcement actions. NRC, in turn, provides oversight of MML 

licensees and permittees through various means.

MMLs incorporate by reference a Letter of Understanding (LOU) that 

defines the licensee’s responsibilities for the radiation control program and 

NRC’s role supporting the MML licensee. The MMLs also incorporate by 

reference ―tie downs,‖ which are documents such as MML licensee 

procedures for permitting and inspections that become license conditions 

and are considered part of the license. 

As of April 2011, NRC had issued MMLs to three Federal agencies: the 

Department of the Air Force, the Department of the Navy, and the 

Department of Veterans Affairs. For each MML, the responsible Federal 

agency has established a master radiation safety committee and an MML 

licensee staff organization that reports to the committee. The licensee 

staff organizations conduct the day-to-day management of the MML 

licensee’s program. The three MML licensee organizations vary based on 

the numbers and types of permits.
Audit of NRC’s Oversight of Master Materials Licensees

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Each MML licensee has a corresponding project manager in an NRC 

region assigned to monitor the MML licensee’s activities. NRC oversight 

of MML licensees is coordinated by the project managers and is 

conducted through biennial reviews of the MML licensee program, 

independent inspections of the MML permittees, accompaniments of MML 

licensee inspections of the permittees, enforcement, and allegations 

followup. 

PURPOSE

The audit objective was to determine whether NRC’s oversight of MML 

licensees adequately protects public health and safety and the 

environment. 

RESULTS IN BRIEF

Over the past decade, NRC has made some improvements to its oversight 

of MML licensees to facilitate adequate protection of public health and 

safety and the environment; however, opportunities exist for NRC to 

further strengthen its oversight of this unique type of materials licensee. 

NRC has developed guidance to oversee MML licensees, and the agency 

has taken steps to improve its implementation of its guidance. 

NRC management could strengthen MML licensee oversight by: 

Improving the guidance for NRC staff providing technical 

assistance and training to MML licensees. 

Improving the guidance for the selection of MML permittees for 

NRC independent inspection.

Clarifying MML licensee regulatory oversight roles, responsibilities, 

and accountabilities.

NRC Could Improve Guidance for NRC Staff Providing Technical 

Assistance and Training to MML Licensees

MML licensees have difficulty obtaining support they need to successfully 

implement their programs. The LOUs state that NRC will provide 

guidance and assistance in areas pertinent to the administration of the 
Audit of NRC’s Oversight of Master Materials Licensees

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MML license, including technical assistance and training where NRC has 

special capabilities. NRC management has not provided adequate 

guidance or a consistent process for supporting MML licensee staff. 

Without this support, MML licensee staff may lack the knowledge and 

skills necessary to effectively implement their oversight programs and, 

consequently, they might not adequately protect public health and safety 

and the environment.

Guidance on Selection of MML Permittees for Inspection Could Be 

Improved

NRC selection of MML permittees for independent inspection varies. NRC 

monitors MML licensees’ performance primarily through independent 

inspections of MML permittees, and NRC principles regarding regulatory 

transparency and predictability should guide these monitoring actions. 

Regional variation in selecting MML permittees for inspection is a result of 

unclear and vague guidance. Without a clear definition of inspection 

parameters, MML permittee inspections are at risk of becoming a lower 

priority than deadline-driven activities, which could impair the 

effectiveness of monitoring MML licensee and permittee performance.

NRC Should Clarify MML Licensee Regulatory Oversight Roles, 

Responsibilities, and Accountabilities

NRC’s regulatory oversight expectations for MML licensees are not 

enforced. To ensure adequate protection of public health and safety and 

the environment, NRC expects MML licensees to perform regulatory 

oversight functions. However, these expectations are not clearly defined 

or explicitly enumerated in NRC regulations, the MMLs, the LOUs, or 

licensee ―tie downs.‖ As a result, MML licensees and NRC may have 

different understandings of MML licensee staff and the master radiation 

safety committee accountabilities and regulatory oversight roles and 

responsibilities. Consequently, MML licensees may not fully perform 

these regulatory oversight functions in a manner NRC expects, which 

could result in inadequate protection of public health, safety, and the 

environment.
Audit of NRC’s Oversight of Master Materials Licensees

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RECOMMENDATIONS

This report makes five recommendations to help NRC improve its 

oversight of MML licensees. A consolidated list of these 

recommendations appears in Section IV of this report.

AGENCY COMMENTS

Agency comments provided during a May 2, 2011, exit conference and an 

additional meeting with staff from the Office of the General Counsel on 

May 5, 2011, have been incorporated, as appropriate, into this report. The 

agency declined to provide formal comments. 
Audit of NRC’s Oversight of Master Materials Licensees

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ABBREVIATIONS AND ACRONYMS 

ADAMS Agencywide Documents Access and Management System

CFR Code of Federal Regulations

DNMS Division of Nuclear Materials Safety

FSME Office of Federal and State Materials and Environmental 

Management Programs

FTE full-time equivalent

IMC Inspection Manual Chapter

IP Inspection Procedure

LOU Letter of Understanding

MML Master Materials License

NRC Nuclear Regulatory Commission

OIG Office of the Inspector General

TAR technical assistance request

TTC Technical Training Center
Audit of NRC’s Oversight of Master Materials Licensees

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TABLE OF CONTENTS 

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

ABBREVIATIONS AND ACRONYMS......................................... v

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

II. PURPOSE ...................................................................... 7

III. FINDINGS........................................................................ 7

A. NRC COULD IMPROVE GUIDANCE FOR NRC

STAFF PROVIDING TECHNICAL ASSISTANCE AND 

TRAINING TO MML LICENSEES ...................................... 8

B. GUIDANCE ON SELECTION OF MML PERMITTEES 

FOR INSPECTION COULD BE IMPROVED ........................ 14

C. NRC SHOULD CLARIFY MML LICENSEE REGULATORY

OVERSIGHT ROLES, RESPONSIBILITIES, AND 

ACCOUNTABILITIES...................................................... 20

IV. CONSOLIDATED LIST OF RECOMMENDATIONS ...... 26

V. AGENCY COMMENTS.................................................. 27

APPENDIX

SCOPE AND METHODOLOGY ............................................... 28
Audit of NRC’s Oversight of Master Materials Licensees

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I. BACKGROUND

The Nuclear Regulatory Commission’s (NRC) mission is to regulate the 

Nation’s civilian use of byproduct, source, and special nuclear materials1

to ensure adequate protection of public health and safety, promote the 

common defense and security, and protect the environment. NRC 

regulates medical, industrial, and academic uses of nuclear materials 

through a combination of regulatory requirements, including licensing, 

inspection, and enforcement. NRC also issues Master Materials Licenses 

(MMLs) to Federal agencies.

What is a Master Materials License?

An MML is a material (byproduct, source, and/or special nuclear material) 

license issued to a Federal agency authorizing use of material at multiple 

sites that fall under the jurisdiction of the Federal agency. The MML 

allows the Federal agency to conduct some activities as a regulator, such 

as issuing permits for radioactive materials use at the sites that use 

materials (referred to as permittees), conducting inspections, handling 

allegations, following up on incidents and events, and taking enforcement 

actions. NRC, in turn, provides oversight of MML licensees primarily 

through biennial reviews and permittees through independent inspections 

conducted by NRC staff. According to NRC managers, the issuance of 

MMLs saves NRC resources. For example, MMLs save NRC from having 

to monitor about 500 individual specific materials licenses. Also, MML 

licensee staff are closer to the users of the materials and can respond 

more quickly than NRC. MML licensees each pay an annual fee of 

$234,000 to NRC.

MMLs incorporate by reference a Letter of Understanding (LOU) that 

defines the licensee’s responsibilities for the radiation control program. 

The MMLs also incorporate by reference ―tie downs,‖ which are 

documents such as MML licensee procedures for permitting and 

inspections that become license conditions and are considered part of the 

 

1

Special nuclear material consists of uranium-233 or uranium-235, enriched uranium, or plutonium. 

Source material is natural uranium or thorium or depleted uranium that is not suitable for use as reactor 

fuel. Byproduct material includes, but is not limited to, nuclear material (other than special nuclear 

material) that is produced or made radioactive in a nuclear reactor, discrete sources of radium-226, and 

accelerator produced radioactive material that is produced, extracted, or converted after extraction for a 

commercial, medical, or research activity.
Audit of NRC’s Oversight of Master Materials Licensees

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license. The LOUs lay out areas of separate and shared responsibility 

between NRC and the licensee. For example, the MML licensee assumes

responsibility for issuing permits for the use of nuclear materials and 

inspects those permittees. NRC reviews the permitting actions of the 

licensee, accompanies licensee inspections of a few permittees each 

year, and independently inspects the permittees. Enforcement is another

area of divided responsibility. The MML licensee identifies violations at 

permittee facilities and must report escalated enforcement to NRC.2 NRC 

reviews MML licensee escalated enforcement actions to determine 

whether the MML licensee made the correct determination as to the 

violation’s severity level. For escalated enforcement, NRC retains sole 

authority to issue civil penalties.

Three Current MMLs

As of April 2011, NRC had issued MMLs to three Federal agencies: the 

Department of the Air Force (Air Force), the Department of the Navy 

(Navy), and the Department of Veterans Affairs (Veterans Affairs). For 

each MML, the responsible Federal agency has established a master 

radiation safety committee and an MML licensee staff organization that 

reports to the committee. The licensee staff organizations conduct the 

day-to-day management of the MML licensee’s program. The MML 

licensee staff organization issues the permits for nuclear materials use, 

conducts the inspections of the permittees, and decommissions sites no 

longer needed for nuclear materials use. Each master radiation safety

committee holds its own quarterly meetings to discuss issues related to 

their respective MML licensee staff organization’s activities and the 

performance of the MML permittees. The current MML licensees and 

features of their oversight programs are outlined in Table 1. 

 

2 Under NRC’s Enforcement Policy there are three primary enforcement sanctions: orders, civil penalties, 

and violations. A violation formalizes how a regulatory requirement was violated and normally requires a 

written response. Violations are assigned a severity level, ranging from Severity Level IV, for those of 

more than minor concern, to Severity Level I for the most significant. Severity Level I, II, and III violations 

are considered to be ―escalated enforcement actions.‖
Audit of NRC’s Oversight of Master Materials Licensees

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Table 1: MML Licensees as of March 2011

Federal

Agency 

Licensee

Date of 

MML 

Issuance

Number of 

Permits

Master Radiation 

Safety 

Committee

MML Licensee Staff 

Organization(s)

MML Permitted 

Uses

Air Force June 1985 269 Radioisotope 

Committee

Radioisotope 

Committee 

Secretariat

Chemical agent 

monitors and 

detectors, nuclear 

medicine, waste 

disposal, 

decommissioning, 

among others

Navy March 1987 79 Naval Radiation 

Safety Committee

Radiological Affairs 

Support Office, and

Naval and Marine 

Corps Public Health 

Center

Radiography, 

nuclear medicine, 

research and 

development, 

decommissioning, 

among others

Veterans

Affairs March 2003 116 National Radiation 

Safety Committee

National Health 

Physics Program

Primarily nuclear 

medicine, also 

research and 

development

Source: OIG analysis of NRC and licensee documents. 

The three MML licensee organizations vary based on the numbers and 

types of permits. The Air Force has 269 permits, but more than half are 

for chemical agent detectors and portable gauges, which are normally 

considered low risk. Air Force permits also cover some research and 

development and medical activities. Although the Navy and Veterans 

Affairs have more comparable numbers of permits, the activities the 

permits cover differ. The Navy has 15 medical permits and the balance is 

for various industrial uses. The Navy also has a large number of existing 

and potential decommissioning sites for which permits will have to be 

issued. Additionally, the Navy maintains thousands of chemical agent 

detectors and monitors, but those are not tracked as individual permits. 

The permits issued under the Veterans Affairs MML are primarily for 

medical uses, but there are also some permits for research activities.
Audit of NRC’s Oversight of Master Materials Licensees

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Structure for MML Oversight

NRC oversight of MML licensees is outlined in NRC Inspection Manual 

Chapter (IMC) 2810, ―Master Material License Inspection Program.‖ Each 

MML licensee has a corresponding project manager in an NRC region. 

The project managers are the primary points-of-contact between the MML 

licensees and NRC. The project managers are located in branches within 

the Divisions of Nuclear Materials Safety (DNMS) in each region. Working 

with their responsible branch chief, the project managers coordinate NRC 

oversight of the MML licensee that their region is assigned to monitor. 

Table 2 shows the NRC regions and branches responsible for oversight of 

the MML licensees.

Table 2: NRC Regions, Divisions, and Branches Responsible for MML Oversight

Responsible NRC Region,

Division, and Branch Federal Agency Licensee

Region IV, DNMS,

Nuclear Materials Safety Branch B

Air Force

Region I, DNMS,

Decommissioning Branch Navy

Region III, DNMS,

Materials Licensing Branch Veterans Affairs

Source: OIG interviews with NRC staff. 

Additionally, there is an MML project manager at headquarters, in the 

Division of Materials Safety and State Agreements, Office of Federal and 

State Materials and Environment Management Programs (FSME). The 

headquarters project manager’s activities include communicating with all 

the regional project managers on a regular basis and distributing 

information to the MML licensees. NRC has allocated 1.5 full-time 

equivalents (FTE) for fiscal year 2011 for routine oversight of MML 

licensees as follows: FSME - 0.2 FTE, Region I - 0.4 FTE, Region III - 0.5

FTE, and Region IV - 0.4 FTE. Figure 1 shows the general oversight

relationship of NRC regions to the internal structure of the MML 

organizations. 
Audit of NRC’s Oversight of Master Materials Licensees

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Figure 1: Generic NRC Oversight of MML Licensees

Research and development permittee Decommissioning site permittee Waste disposal site permittee Industrial radiography permittee

Broad-scope medical permittee Hospital permittee MML Licensee Staff Organization

Master Radiation Safety Committee

MML permittees

Federal Agency Licensee

NRC Region

Source: OIG analysis of NRC and licensee documents and OIG interviews with NRC and licensee 

staff.
Audit of NRC’s Oversight of Master Materials Licensees

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NRC oversight of MML licensees is conducted through biennial reviews, 

independent inspections, accompaniment inspections, enforcement, and 

allegations followup.

Biennial reviews: Comprehensive NRC team reviews that focus on 

licensee and permittee compliance with NRC requirements and 

specific focus elements associated with the MML licensee’s 

management oversight, staffing, training, permitting, inspection, 

and response to events or allegations. 

Independent inspections: NRC inspections of MML licensees’ 

permittees, including both routine and any reactive inspections 

performed in response to incidents, events, or allegations. 

Violations identified by NRC during these independent inspections 

are issued in accordance with NRC’s Enforcement Policy. 

Accompaniment inspections: NRC’s observation of an MML 

licensee inspector conducting an inspection of a permittee to 

evaluate the performance of the MML inspector and the 

implementation of the MML licensee’s inspection program. 

Enforcement: If an MML licensee identifies a violation at a 

permittee location that leads to escalated enforcement, the region 

responsible for that MML will evaluate the MML licensee’s 

enforcement in accordance with NRC’s Enforcement Policy and 

issue violations and levy civil penalties as appropriate. 

Allegations followup: All allegations concerning the MML licensee 

brought to the attention of the regional NRC project manager and 

the regional allegations coordinator are processed according to

NRC Management Directive 8.8, Management of Allegations. The 

regional allegations review board may refer the allegation back to 

the MML licensee or recommend independent followup by NRC.
Audit of NRC’s Oversight of Master Materials Licensees

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II. PURPOSE

The audit objective was to determine whether NRC’s oversight of MML 

licensees adequately protects public health and safety and the 

environment.3The report appendix contains information on the audit 

scope and methodology.

III. FINDINGS

Over the past decade, NRC has made some improvements to its oversight 

of MML licensees to facilitate adequate protection of public health and 

safety and the environment; however, opportunities exist for NRC to 

further strengthen its oversight of this unique type of materials licensee. 

NRC has developed guidance to oversee MML licensees, and the agency 

has taken steps to improve its implementation of its guidance. For 

example, NRC — in response to issues associated with the Veterans 

Affairs MML licensee — established a lessons-learned task group to 

review NRC licensing and inspection policies, procedures, and practices 

related to prostate implant brachytherapy and NRC’s oversight of the 

MML. NRC is taking actions to implement recommendations from the task 

group’s final report. The agency has established counterpart meetings 

and working groups to better communicate with MML licensee staff. NRC 

has started to offer training in enforcement and allegations for MML 

licensee staff. Finally, NRC is revising its guidance for MML oversight, 

such as NUREG 1556, Volume 10, ―Program-Specific Guidance About 

Master Materials Licenses.‖

NRC management could strengthen MML licensee oversight by: 

Improving the guidance for NRC staff providing technical 

assistance and training to MML licensees. 

Improving the guidance for the selection of MML permittees for 

NRC independent inspection.

Clarifying MML licensee regulatory oversight roles, 

responsibilities, and accountabilities.

 

3

The original objective of this audit, as noted in OIG’s fiscal year 2011 Annual Plan, was to determine the 

extent to which NRC is providing effective oversight of MMLs. The objective was revised during fieldwork 

to tie the audit objective to NRC’s mission of protection of public health and safety and the environment.
Audit of NRC’s Oversight of Master Materials Licensees

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A. NRC Could Improve Guidance for NRC Staff Providing Technical 

Assistance and Training to MML Licensees

MML licensees have difficulty obtaining support they need to successfully 

implement their programs. The LOUs state that NRC will provide 

guidance and assistance in areas pertinent to the administration of the 

MML license, including technical assistance and training where NRC has 

special capabilities. NRC management has not provided adequate 

guidance or a consistent process for supporting MML licensee staff. 

Without this support, MML licensee staff may lack the knowledge and 

skills necessary to effectively implement their oversight programs and, 

consequently, they might not adequately protect public health and safety

and the environment.

NRC Obligations To Support Licensee Execution of MML

An LOU between NRC and an MML licensee is incorporated by reference 

in the MML and enumerates assurances and obligations of both NRC and 

the licensee. These letters also describe activities that NRC will 

undertake to assist the MML licensee in fully executing its regulatory 

responsibilities under the license to adequately protect public health and 

safety and the environment. Two important NRC obligations to MML 

licensees are (1) support the licensee by providing guidance and technical 

assistance and (2) make training available to licensee staff. Specifically, 

the LOU incorporated by reference in the Navy’s MML states the following 

in regard to NRC support: 

The NRC will provide guidance and assistance in areas 

pertinent to the administration of this license, to include 

technical assistance in those matters where the NRC has 

special capabilities and technical ability, or where the NRC 

determines that such assistance is in the best interests of its 

regulatory program or responsibility.

The Navy LOU also states the following in regard to NRC providing 

training to MML licensees:

The NRC and USN [Navy] will mutually arrange for Navy 

inspectors to attend appropriate NRC training courses....
Audit of NRC’s Oversight of Master Materials Licensees

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The Air Force and Veterans Affairs LOUs are similar to 

the Navy’s LOU. 

NRC’s Current Approach to MML Licensee Support Could Be 

Improved

MML licensees have difficulty obtaining the support they need to 

successfully implement their programs in accordance with their licenses. 

MML licensees often do not receive timely or clear responses to their 

requests for technical assistance. Additionally, the MML licensees have 

difficulty getting into NRC-sponsored training courses. 

MML Licensees Do Not Receive All the Support They Need From NRC

MML licensee staff rely on NRC staff to provide information on enforcing 

NRC regulations and for ensuring permittee compliance with regulations, 

but NRC staff do not always provide timely or clear answers. MML 

licensee requests pertain to topics such as increased controls4

requirements, decommissioning,5and the applicability of medical event6

reporting to prostate implant brachytherapy. Staff from all three MML 

licensees stated that NRC does not always respond to requests for 

guidance and technical assistance, and when NRC does respond, the 

response is not always timely or clear. Although the NRC MML regional 

project managers provide support by answering phone calls or e-mails,

responding to questions at meetings, and while accompanying or 

conducting inspections of permittees, some requests for technical 

 

4 NRC issued the ―Order Imposing Increased Controls‖ to NRC licensees, including MML licensees,

authorized to possess radioactive material in quantities of concern. The radionuclides and associated 

threshold quantities were based on the Category 1 and Category 2 quantities described in the 

International Atomic Energy Agency Code of Conduct on the Safety and Security of Radioactive Sources. 

The order requires licensees to implement enhanced security to control access to radioactive materials 

quantities of concern and to protect sensitive security-related information. The order was issued to 

applicable material licensees under the NRC’s public health and safety authority. 

5 Decommissioning is the process of safely closing a facility where nuclear materials are handled to retire 

it from service after its useful life has ended. This process primarily involves decontaminating the facility 

to reduce residual radioactivity and then releasing the property for unrestricted or (under certain 

conditions) restricted use. This often includes dismantling the facility or dedicating it to other purposes.

6

A ―medical event‖ occurs if one or more of several incidents occur such as the dose administered to a 

patient differs from the prescribed dose by at least 20 percent, either too high or too low; or the wrong 

radioactive drug is administered; and the difference between the dose administered and the prescribed 

dose exceeds one of the reporting limits contained in 10 Code of Federal Regulations (CFR) 35.3045. 
Audit of NRC’s Oversight of Master Materials Licensees

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assistance go unanswered. For example, an MML licensee official 

explained that when the licensee asks a question, the need for information 

is immediate, but the responses are delayed or never provided. This 

official added this is a special cause for concern because NRC expects 

the licensee to enforce NRC regulations and ensure permittees comply 

with regulations. 

NRC does not have controls in place to ensure that the MML licensee staff 

receive an official answer from NRC. For example, a particular project 

manager may be an expert in licensing but unable to provide an answer to 

an MML licensee staff question about NRC decommissioning 

requirements. As such, the project manager is not able to immediately 

respond to the MML licensee staff question. An NRC staff member 

acknowledged that MML licensees often receive either a quick response 

to their questions or none at all. An MML official said that it is difficult to 

get information from NRC and that the biggest issue is getting NRC to 

answer questions that would help the MML licensee perform its regulatory 

role. For example, when NRC issued the increased controls order, it 

established an e-mail address to take questions. An MML official sent an 

e-mail with 12 questions, but NRC never answered the questions. In 

another example, NRC staff told MML licensee staff that the licensee 

could not use permittee-owned radiation survey equipment for inspections. 

MML licensee staff asked for an explanation and requested that the 

requirement be put in writing, but NRC did not provide an answer. 

While a few of the MML licensee requests may be answered formally 

through NRC’s Technical Assistance Request (TAR)7process, MML 

licensee staff in all three regions expressed timeliness concerns with the 

TAR process. For example, MML licensee staff in one region made a 

request that was routed through the TAR process, and the licensee has 

been waiting well over a year for NRC’s response. 

MML licensee staff and NRC regional project managers also rely on the 

headquarters project manager for guidance and technical support. 

However, the level of support depends on the resources available and the 

 

7

A TAR response is a formal NRC document that NRC staff develop to address licensee requests for 

clarification. NRC’s goal for completing a TAR response, which includes coordination throughout NRC, is 

60 working days after the assigned branch has conducted an initial review. 
Audit of NRC’s Oversight of Master Materials Licensees

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individual who holds the position at any given time. For example, the 

current headquarters project manager has taken the initiative to set up 

meetings to discuss MML oversight and provide information to MML 

licensees. MML licensee staff members expressed appreciation for the 

current project manager’s initiative to forward Federal Register notices 

and updated NRC guidance affecting their license and for providing a 

headquarters perspective of MML licensee performance during biennial 

reviews. Regional project managers counted on the headquarters project 

manager to assist during two recent biennial reviews. However, due to 

resource constraints, the headquarters project manager was only able to 

attend part of one review and none of the other, which left the NRC team 

conducting the biennial without headquarters participation. NRC regional 

managers and staff supporting MML oversight have contended that 

headquarters support of MML oversight has waxed and waned over the 

past decade or more and that the previous headquarters project managers 

did little or nothing to coordinate MML oversight and support. Although 

the attention and initiative given by the current headquarters MML project 

manager is encouraging and helpful, there is nothing in place to ensure 

that such support will continue.

MML Licensee Staff Have Difficulty Obtaining NRC Training

MML licensee staff have experienced trouble getting into NRC-hosted 

training courses that they need to successfully implement their programs. 

NRC offers specialized technical training encompassing such topics as 

health physics, risk assessment, and regulatory skills for NRC, Agreement 

State,8and MML licensee staff. However, MML licensee staff often do not 

learn of course offerings in time to register. An MML licensee staff 

member complained that MML licensee staff do not find out about course 

offerings when Agreement State officials are notified. An NRC Technical 

Training Center (TTC) staff member agreed that MML licensees are 

notified of available courses differently and might become aware of 

courses only after the course is full. When MML licensees are aware of 

course offerings, they have trouble registering. For example, one region 

has a three-step process for course registration while another allows MML 

licensee staff to register directly with TTC staff. 

 

8

An Agreement State is a U.S. State that has signed an agreement with NRC authorizing the State to 

regulate certain uses of radioactive materials within the State. NRC relinquishes to such States portions 

of its regulatory authority to license and regulate byproduct materials, source materials, and certain 

quantities of special nuclear materials.
Audit of NRC’s Oversight of Master Materials Licensees

12

NRC Management Has Not Provided Adequate Guidance or a 

Consistent Process for Supporting MML Licensee Staff

MML licensees do not receive all the support they need from NRC 

because NRC guidance for regional and headquarters project managers is 

inadequate. While NRC has inspection guidance, there is no agencywide 

guidance on how MML project managers should support licensees by 

providing guidance and technical assistance. Two regions have 

developed region-specific guidance for project managers, but NRC does 

not have agencywide guidance that would ensure consistent oversight of 

MMLs by regional and headquarters project managers. Furthermore, 

there is no guidance addressing the role and responsibilities of the 

headquarters project manager.

MML licensee staff have difficulty obtaining NRC-hosted training because 

there is no clear or consistent process for notification of, or registration for,

NRC-hosted training. The processes vary among the regions.

MML Licensee Staff May Lack Some Knowledge and Skills Required 

To Fully Execute Regulatory Responsibilities 

When MML licensee staff are required to wait months for NRC to respond 

to requests for guidance or technical assistance, licensee staff might not 

be able to fully execute their regulatory responsibilities. Additionally, as 

long as NRC headquarters relies solely on the personal dedication of the 

individual serving as the headquarters project manager without the benefit 

of clearly defined roles and responsibilities, NRC risks losing knowledge 

and awareness of MML-related activities as headquarters project 

managers turn over. Also, when MML licensee staff do not obtain training 

through NRC-hosted courses, they may violate the terms of the LOU and 

not have the technical expertise to successfully execute their regulatory 

responsibilities under the MML and adequately protect public health and 

safety and the environment. 
Audit of NRC’s Oversight of Master Materials Licensees

13

Recommendations 

OIG recommends that the Executive Director for Operations:

1. Define regional and headquarters MML project managers’ roles in 

responding to requests for guidance and assistance from MML 

licensee staff.

2. Develop and implement a consistent and timely process for 

notifying MML licensee staff of NRC-hosted training courses.

3. Develop and implement a consistent process for registering MML 

licensee staff for NRC-hosted training courses.
Audit of NRC’s Oversight of Master Materials Licensees

14

B. Guidance on Selection of MML Permittees for Inspection Could Be 

Improved 

NRC selection of MML permittees for independent inspection varies. NRC 

monitors MML licensees’ performance primarily through independent 

inspections of MML permittees, and NRC principles regarding regulatory 

transparency and predictability should guide these monitoring actions. 

Regional variation in selecting MML permittees for inspection is a result of 

unclear and vague guidance. Without a clear definition of inspection 

parameters, MML permittee inspections are at risk of becoming a lower 

priority than deadline-driven activities, which could impair the 

effectiveness of monitoring MML licensee and permittee performance. 

Principles of Good Regulation Guide MML Oversight Activities

The Commission established guiding principles to promote the 

transparency and predictability of NRC regulatory activities such as the 

independent inspections of MML permittees. The principle of openness 

states that nuclear regulation must be transacted candidly and requires 

open communication with licensees as well as Congress, other agencies, 

and the public. The principle of clarity states that regulation must be 

coherent, with a clear connection to NRC objectives, and readily 

understood. The principle of reliability states that regulatory actions 

should be consistent with written regulations and administered in a 

manner that will lend stability to operations and planning. As NRC 

monitors MML permittee performance, it should be apparent that the 

program is clearly communicated, connected to goals, and fairly 

administered. 

An example of guidance for NRC staff that serves these principles is 

Inspection Manual Chapter (IMC) 2800, ―Materials Inspection Program.‖

9

 

The primary objective of IMC 2800 is to establish a policy for the NRC 

materials inspection program that will achieve a consistent process of 

inspection for all licensees. A key way in which IMC 2800 establishes a 

consistent and reliable program is through the inclusion of specific

intervals for routine inspections based on priority codes tied to the inherent 

risk of the licensed activity or material. For example, industrial 

 

9 NRC uses IMC 2800 to guide inspections of all materials licensees, but not for MML permittees. NRC 

follows IMC 2810 for inspections of MML permittees. MML licensees follow IMC 2800 for MML licensee 

inspections of their permittees. 
Audit of NRC’s Oversight of Master Materials Licensees

15

radiography at a temporary jobsite is assigned priority code 1, and those 

activities are inspected every year. Measuring systems with fixed gauges 

are assigned priority code 5 and are inspected every 5 years. 

Decommissioning activities are assigned priority code D, and NRC 

conducts a special inspection as decommissioning activities occur. 

Selection of MML Permittees for Independent Inspection Varies

Selection of MML permittees for independent inspections is shaped by 

wide-ranging interpretations of the guidance for MML licensee oversight, 

IMC 2810, ―Master Material License Inspection Program.‖ In contrast to 

the consistent and reliable approach contained in IMC 2800, IMC 2810

directs NRC staff to select a ―sufficient number‖ and to choose a 

―representative sample‖ of MML permittees in order to adequately monitor 

MML licensee and permittee performance. NRC’s basis for selection of 

MML permittees for inspection does not serve the NRC Principles of Good 

Regulation such as clarity and reliability. The number of independent 

inspections varies from year to year. In addition, NRC does not conduct 

independent inspections of MML permittees located in foreign countries.

Guidance for NRC Independent Inspections of MML Permittees

IMC 2810 describes activities that MML project managers are required to 

perform, including implementing a program of independent inspections of 

MML permittees. To implement the independent inspection program, the 

MML project manager is required to:

Annually request a sufficient number of independent inspections to 

adequately monitor MML licensee and permittee regulatory 

performance. 

Choose a representative sample of the MML permittees to be 

inspected, placing less emphasis where permitted activities have 

less potential for health and safety problems. 

Avoid re-inspecting recently inspected permittees, unless a repeat 

inspection is warranted because of safety issues. 

IMC 2810 is silent on whether and how MML project managers should 

incorporate decommissioning inspections into their selection of MML 

permittees for independent inspection. 
Audit of NRC’s Oversight of Master Materials Licensees

16

Reasons for Selection Are Inconsistent

NRC management and staff refer to IMC 2810 when discussing selection 

of permittees for inspection, yet they expressed a range of reasons for 

selection that were inconsistent and sometimes conflicting. NRC staff 

members stated there appears to be ―no rhyme or reason‖ underlying how 

permittees are selected for independent inspection and ―it’s a shot in the 

dark.‖ There is no single perspective on what constitutes ―a sufficient 

number‖ of independent inspections or ―a representative sample‖ of the 

MML permittees to be inspected. Management and staff articulated some 

common themes, such as giving greater scrutiny to higher risk activities, 

Increased Controls requirements, and MML permittee sites undergoing 

decommissioning. However, there were also conflicting ideas. For 

example, one NRC staff member stated that it is important not to overlap 

with the MML licensee inspection staff, while other NRC staff pointed to 

MML inspection findings as drivers for selecting MML permittees for 

inspection. One regional project manager selected exactly 13 permittees 

for inspections because the MML licensee identified violations at those 13 

sites even though the project manager believed the violations were not 

serious. A different NRC manager stated that 10 percent of the permittees 

should be inspected, while another manager in the same region said there 

is no set number. 

Some inspection selections are made for reasons that are inconsistent 

with the risks associated with the activity, materials, or permit 

amendments. For example, a permittee may be selected for inspection 

because of its geographic proximity to another permittee, solely to 

conserve resources and not because of risk- or performance-based 

criteria. Similarly, while some NRC managers said that the project 

manager’s experience with the MML will contribute to judgments about 

selection, other NRC staff said selection may be made to train not only a 

new project manager, but possibly other staff as well, again not because 

of risk-based criteria. At the same time, one area of risk may be 

overlooked. Although amendments in permits can signal a potential 

increase in risk, only one NRC manager mentioned permit amendment as 

a consideration in selection. 
Audit of NRC’s Oversight of Master Materials Licensees

17

Inconsistency in Inspections

The number of permittees selected for inspection using this range of 

interpretations is inconsistent and varies from year to year as shown in

Figure 2. 

Figure 2: Independent Inspection Reports (2000-2010)

* Note: The Veterans Affairs MML was not issued until March 17, 2003.

Source: OIG analysis of NRC documents.

Figure 2 reflects the number of NRC independent inspection reports 

located in the Agencywide Documents Access and Management System 

(ADAMS)10 for each MML docket number for calendar years 2000 to 2010. 

The number of inspections performed annually for a given MML, as 

indicated by the inspection reports identified, varies from year to year. 

There is the least variation in the number of inspections of Air Force 

permittees; however, the Air Force program receives the fewest NRC 

inspections overall. For each MML licensee, there is 1 year in which no 

independent inspections were initiated: 2007 for Veterans Affairs, 2008 for 

 

10 ADAMS is the official recordkeeping system through which NRC provides access to libraries or collections of 

documents related to the agency’s regulatory activities.

0

5

10

15

20

25

30

2000 2001 2002 2003* 2004 2005 2006 2007 2008 2009 2010

# of Inspection Reports

Year

VA

Navy 

Air Force
Audit of NRC’s Oversight of Master Materials Licensees

18

Navy, and 2010 for Air Force. The variation does not elucidate how NRC 

staff defines ―sufficient‖ or ―representative,‖ particularly when existing 

practice occasionally produces zero annual independent inspections of 

MML permittees. 

MML Permittees Located at U.S. Military Bases in Foreign Countries

NRC does not inspect MML permittees in foreign countries although the 

Navy and Air Force issue permits for overseas facilities or activities under 

their MMLs. 

Existing Guidance for NRC Staff Overseeing MMLs Is Not Clear

The variation in selection of permittees for independent inspections is the 

result of unclear and vague guidance for MML project managers. IMC 

2810 directs NRC staff to select ―a sufficient number‖ and ―a 

representative sample‖ of permittees while avoiding duplicating the 

inspections of the MML inspection staff. While the existing guidance is 

intended to allow flexibility to develop a performance-based and riskinformed inspection program, the guidance does not serve NRC’s 

Principles of Good Regulation because it lacks clarity in key areas. NRC 

staff mentioned areas in which greater direction would be helpful in setting 

priorities and planning for inspections:

A process to sample the various types of permittees within each 

MML licensee organization.

A method to assess relative risk that incorporates performance 

history, changes to or termination of permits, newly permitted highrisk activities, as well as priority code.

A minimum frequency for which the independent inspections should 

be planned. 

Consistency and Effectiveness of Independent Inspections Are At 

Risk

The differing approaches to selecting MML permittees for independent 

inspections could limit the impact of NRC’s oversight. Without clearer 

guidance for MML permittees selection and in the absence of quantitative 

or timeliness goals, the inspections can become a lower priority than 
Audit of NRC’s Oversight of Master Materials Licensees

19

deadline-driven activities, and management may have difficulty tracking 

whether NRC’s oversight is commensurate with current MML licensee 

activities. Moreover, MML licensee staff members expressed frustration 

with the inconsistency because they perceive that NRC independent 

inspections are neither connected to clear objectives nor administered in a 

manner that lends stability to their own operations, as suggested by the 

Principles of Good Regulation.

The varying approaches to selecting MML permittees for independent 

inspections could also overlook areas of non-compliance within an MML 

licensee program or omit inspecting activities with a significant impact on 

public health, safety, and the environment. Also, if MML licensee 

decommissioning activities increase, NRC would need to conduct more 

decommissioning inspections that could divert further resources away 

from NRC routine inspections of other MML permittees. The lessonslearned task group report noted that NRC staff consensus is that if MML 

licensee performance is ―acceptable,‖ then fewer inspections constitute 

―sufficient.‖ If some permittees are inspected repeatedly while the overall 

number of independent inspections declines, then the potential for risk 

brought about by changes at other permittees may not be evaluated. 

Because NRC does not inspect the MML permittees as often as the MML 

licensee staff does, a deliberate selection process that enhances MML 

oversight becomes more important. 

Recommendation

OIG recommends that the Executive Director for Operations:

4. Modify guidance to include a risk-informed methodology with 

requirements on sample size, selection criteria, and inspection 

frequency for selecting MML permittees for NRC independent 

inspection.
Audit of NRC’s Oversight of Master Materials Licensees

20

C. NRC Should Clarify MML Licensee Regulatory Oversight Roles, 

Responsibilities, and Accountabilities

NRC’s regulatory oversight expectations for MML licensees are not 

enforced. To ensure adequate protection of public health and safety and 

the environment, NRC expects MML licensees to perform regulatory 

oversight functions. However, these expectations are not clearly defined 

or explicitly enumerated in NRC regulations, the MMLs, the LOUs, or 

licensee ―tie downs.‖ As a result, MML licensees and NRC may have 

different understandings of MML licensee staff and the master radiation 

safety committee accountabilities and regulatory oversight roles and 

responsibilities. Consequently, MML licensees may not fully perform 

these regulatory oversight functions in a manner NRC expects, which 

could result in inadequate protection of public health, safety, and the 

environment. 

NRC Expects MML Licensees To Act As Regulators Similar To NRC

NRC has regulatory oversight expectations for MML licensees. To ensure 

that MML licensees adequately protect public health and safety and the 

environment, NRC expects MML licensees to conduct regulatory oversight 

activities, such as identifying the ―extent of condition‖11 of events at MML 

permittee locations and communicating relevant information to permittees. 

NRC’s mission is to ensure adequate protection of public health and 

safety and the environment. NRC uses licensing, inspections, and 

enforcement, among other regulatory activities, to provide for this 

assurance. An MML licensee, under its MML, assumes some authority as 

a regulator, but remains a licensee. NRC managers and staff have 

varying views on the nature of MML licensees. While they all agree that 

an MML licensee is first and foremost a licensee, they also expect the

MML licensees to perform regulatory functions. For example, NRC 

managers and staff expressed the view that MML licensees should 

embrace their role as a regulator, calling them ―quasi-licensees‖ and ―self 

regulating.‖ 

 

11 ―Extent of condition‖ is a term used in NRC oversight of nuclear power plants. Under 10 CFR Part 50, 

nuclear power plant licensees are required to have a quality assurance program that identifies significant 

conditions adverse to quality, determines the cause of the condition, and takes corrective action to 

preclude repetition of the condition.
Audit of NRC’s Oversight of Master Materials Licensees

21

NRC’s Expectations for MML Licensee Regulatory Oversight Are Not 

Enforced

NRC does not enforce its regulatory oversight expectations of MML 

licensees. NRC has never issued a finding or violation for an MML 

licensee’s lack of adequate regulatory oversight during any of its biennial 

reviews of the MML licensee’s implementation of the MMLs. Since about 

2004, approximately every 2 years, NRC has conducted biennial reviews 

to evaluate the effectiveness of MML licensees’ centralized control of 

nuclear materials use. Inspection Procedure (IP) 87129, ―Master 

Materials Program,‖ contains the guidance for these biennial inspections. 

IP 87129 directs NRC staff to review several focus elements of the 

program. One of these elements is management oversight. This review is 

to verify whether the MML licensees have centralized control over their 

nuclear materials use programs. For example, under management 

oversight, IP 87129 requires NRC to determine if the MML licensee’s

master radiation safety committee is proactive in seeking out areas 

needing improvement, rather than just responding to events and 

information from outside sources. Another IP 87129 requirement is for 

NRC to review and assess the MML licensee’s efforts to receive and 

resolve technical questions from permittees and how generic safety and 

health issues are addressed. 

During a special inspection of the Veterans Affairs MML licensee to 

determine the ―extent of condition‖ of problems related to prostate implant 

brachytherapy, NRC identified several concerns regarding the MML 

licensee’s regulatory oversight activities, but there were no violations as a 

result of these concerns. For example, one concern NRC raised in its 

report was that the MML licensee’s master radiation safety committee 

meetings appeared to focus on ―one-way‖ communication from the MML 

licensee staff to the committee, with no direction from the committee 

members or discussion of safety issues among the committee members. 

Also, NRC raised concerns about this MML licensee’s master radiation 

safety committee not fulfilling its role in providing oversight and direction 

for event response and not executing its authority in the enforcement 

process under the MML. Additionally, NRC concluded that the MML 

licensee did not have a formal process to address technical assistance 
Audit of NRC’s Oversight of Master Materials Licensees

22

requests from MML permittees. Despite all of these concerns, NRC did 

not issue any violations related to regulatory oversight.12

NRC’s Regulatory Oversight Expectations Are Not Enumerated in 

Licensing Documents or NRC Regulations

NRC does not hold MML licensees accountable for all of the regulatory 

oversight functions that NRC expects the MML licensees to perform 

because some of those functions are not clearly defined or enumerated in 

NRC regulations, the MMLs, the LOUs, or the tie downs. 

NRC’s regulations governing materials licensees do not contemplate a 

licensee such as an MML licensee that is expected to perform regulatory 

oversight functions. Rather, NRC’s materials regulations are written with a 

licensee in mind that actually uses nuclear material, as opposed to an 

entity like the MML licensee staff organization that is issuing permits and 

conducting inspections but not actually using nuclear materials. An MML 

licensee official said that NRC inspectors raise concerns about MML 

licensee performance that have no regulatory basis. One NRC staff 

member explained that there are no regulations for the MML licensees’ 

management oversight, and there is nothing for NRC to cite against. 

MMLs are not defined in NRC regulations or NRC’s governing legislation. 

None of the parts of the CFR that are applicable to materials licensees 

(specifically Parts 19, 20, 21, 30, 31, 32, 33, 34, 35, 36, 39, 40, 70, 71, 

and 110) contains a definition or description of MMLs, or any requirements 

for the performance of regulatory oversight duties by MML licensee staff or 

master radiation safety committee members. In contrast, there is a 

regulation describing broad scope licenses13– to which MML licensees 

have been compared – and the role of the broad scope radiation safety 

committee in managing large broad scope licenses. Furthermore, the 

Atomic Energy Act, as amended, does not contain any definition of MMLs. 

 

12 In March 2010, NRC issued a notice of violation and imposition of a $227,500 civil penalty to the 

Veterans Affairs MML licensee for violations of various NRC regulations. The most serious violations 

were issued to the licensee for not having adequate procedures for prostate brachytherapy treatments to 

ensure that the treatments were administered in accordance with the physician directive describing the 

treatment as required in 10 CFR Part 35 (Medical Use of Byproduct Material). None of the violations 

issued to the Veterans Affairs MML licensee related to regulatory oversight expectations that NRC 

expects MML licensees to perform.

13 While broad scope licensees are NRC licensees that are authorized to use nuclear materials at multiple 

sites, broad scope licensees do not, for example, conduct inspections and issue violations according to 

NRC regulations as MML licensees do.
Audit of NRC’s Oversight of Master Materials Licensees

23

In contrast, the act describes when NRC may enter into agreements with 

States to assume regulatory authority over certain nuclear materials. Such 

States are called Agreement States – another entity that has been likened 

to MML licensees.14

Many of the regulatory oversight functions that NRC expects MML 

licensees to perform are not enumerated in the MMLs, the LOUs, or the tie 

downs. Without clear requirements in regulation, NRC’s only mechanism 

to clearly communicate its expectations in a manner that is enforceable is 

by enumerating those expectations in the MML, the LOU, and/or the tie 

downs. The MMLs, the LOUs, and the tie downs establish that the MML 

licensee is authorized to permit radioactive materials use at the particular 

Federal agency’s facilities. They also provide that the MML licensee shall 

conduct inspections and enforcement consistent with NRC’s inspection 

and enforcement guidance. However, these documents do not establish 

that the MML licensee or the master radiation safety committee is required 

to perform such regulatory oversight functions such as identifying the 

―extent of condition‖ of events or incidents and taking corrective action to 

prevent recurrence. As one NRC staff member explained, identifying the 

―extent of condition‖ of problems is a term borrowed from nuclear reactor 

oversight and is not regularly used in NRC oversight of materials 

licensees. This NRC staff member added that these requirements should 

have been clearly communicated when the MMLs, the LOUs, and the tie 

downs were established. Also, the MMLs, the LOUs, and the tie downs do 

not clearly establish the roles and responsibilities of the MML licensee and 

master radiation safety committee in answering and providing technical 

assistance to MML permittees.

 

14 There are differences between MML licensees and Agreement States. Agreements States are not 

NRC licensees, while MML licensees are. NRC relinquishes regulatory authority to Agreement States, 

while MML licensees remain NRC licensees.
Audit of NRC’s Oversight of Master Materials Licensees

24

Without Clearly Enumerated Regulatory Oversight Requirements, 

Roles and Responsibilities May Be Confused

Because NRC’s regulatory oversight expectations for MML licensees are 

not clearly defined or enumerated in licensing documents or NRC 

regulations, MML licensees and NRC may not have the same 

understanding of the MML licensees’ roles and responsibilities as they 

relate to oversight of the MML permittees. As one MML licensee official 

said, it is difficult for the MML licensee staff to know when they are the 

regulator policing MML permittees and when the MML licensee is a 

licensee accountable for the activities at a particular MML permittee. This 

official maintains that the MML licensee and the master radiation safety 

committee are not accountable for the activities that occur at a particular 

permittee location. This official added that the MML licensee staff and the 

master radiation safety committee are not the broad scope radiation safety 

officer15 for the permittees; rather, the MML licensee staff and the master 

radiation safety committee are the regulator. There is confusion as to the 

MML licensees’ role specifically when the MML licensee is a licensee, a 

regulator, or a radiation safety officer. 

This lack of clarity could lead to assumptions by NRC staff and MML 

licensee staff as to who has responsibility for oversight of the safe use of 

nuclear materials at MML permittees. As one NRC staff member said, the 

licensee might think it is doing the right thing but if NRC says it is not, this 

could lead to disagreement between NRC and the MML licensee as to the 

MML licensee’s responsibilities. NRC is unable to issue violations to MML 

licensees that are not meeting certain NRC regulatory oversight 

expectations, such as identifying the extent of condition of events or 

incidents at permittee locations or communicating certain information to 

permittees. As a result, these expectations may not be met by MML 

licensees, which could lead to inadequate protection of public health, 

safety, and the environment. 

 

15 A material licensee’s management appoints a radiation safety officer to be responsible for 

implementing the radiation protection program. The licensee, through the radiation safety officer, is 

responsible for ensuring that radiation safety activities are being performed in accordance with licenseeapproved procedures and regulatory requirements. Each MML permittee has a radiation safety officer.
Audit of NRC’s Oversight of Master Materials Licensees

25

Recommendation

OIG recommends that the Executive Director for Operations:

5. Clearly define all MML licensee staff and master radiation safety 

committee regulatory oversight responsibilities (e.g., requirements 

and roles and accountabilities) in NRC regulations, the MMLs, the 

LOUs, or some combination thereof.
Audit of NRC’s Oversight of Master Materials Licensees

26

IV. CONSOLIDATED LIST OF RECOMMENDATIONS

OIG recommends that the Executive Director for Operations:

1. Define regional and headquarters MML project managers’ roles in 

responding to requests for guidance and assistance from MML 

licensee staff.

2. Develop and implement a consistent and timely process for 

notifying MML licensee staff of NRC-hosted training courses.

3. Develop and implement a consistent process for registering MML 

licensee staff for NRC-hosted training courses.

4. Modify guidance to include a risk-informed methodology with 

requirements on sample size, selection criteria, and inspection 

frequency for selecting MML permittees for NRC independent 

inspection.

5. Clearly define all MML licensee staff and master radiation safety 

committee regulatory oversight responsibilities (e.g., requirements 

and roles and accountabilities) in NRC regulations, the MMLs, the 

LOUs, or some combination thereof.
Audit of NRC’s Oversight of Master Materials Licensees

27

V. AGENCY COMMENTS

On April 19, 2011, OIG issued a discussion draft to the Executive Director 

for Operations. OIG subsequently met with NRC management during a 

May 2, 2011, exit conference during which agency management stated 

their general agreement with the findings and recommendations in this 

report. Agency staff provided informal comments to the draft report. Also, 

on May 5, 2011, OIG held an additional meeting with staff from the Office 

of the General Counsel to discuss the agency’s informal comments. On 

May 11, 2011, OIG provided the agency a revised discussion draft and on 

May 27, 2011, the agency declined to provide formal comments. The final 

report incorporates revisions made, as appropriate, as a result of meetings 

with NRC staff.
Audit of NRC’s Oversight of Master Materials Licensees

28

Appendix

SCOPE AND METHODOLOGY

The audit objective was to determine whether NRC’s oversight of MML 

licensees adequately protects public health and safety and the 

environment. The audit focused on reviewing the oversight of the MMLs 

through documentation reviews, observation of NRC oversight activities, 

and interviews with NRC management and staff involved in MML oversight 

and with representatives of the MML licensees. 

OIG reviewed documents related to the Air Force, Navy, and Veterans 

Affairs MML licenses, including: 

 The licenses.

 The Letters of Understanding, which lay out areas of separate 

and shared responsibility between the NRC and the licensee.

 Associated tie downs, which are licensee commitments to NRC 

which become part of the license. 

OIG also reviewed applicable sections of the CFR pertaining to materials 

licensees and NRC guidance relevant to MML oversight. Some of the key 

documents reviewed include:

 Atomic Energy Act of 1954, as amended.

 CFR Title 10.

 NUREG 1556, Volume 10, Program-Specific Guidance About 

Master Materials Licenses.

 NUREG 1556, Volume 20, Guidance About Administrative 

Licensing Procedures.

 NUREG 1757, Volume 1, Revision 2, Consolidated

Decommissioning Guidance: Decommissioning Process for 

Materials Licensees.

 Final Report of NRC’s Department of Veterans Affairs LessonsLearned Task Group.

 IMC 1246, Qualifications Program in Nuclear Safety and 

Safeguards Program.

 IMC 2800, Materials Inspection Program.

 IMC 2810, Master Materials License Inspection Program.

 IP 87129, Master Materials Program.
Audit of NRC’s Oversight of Master Materials Licensees

29

To determine the scope of NRC’s independent inspections of MML 

permittees, OIG reviewed 220 NRC inspection reports from independent 

inspections conducted between 2000 and 2010. OIG identified the 

inspection reports through searches of ADAMS. OIG also accompanied 

NRC inspectors on two independent inspections of MML permittees, one 

at China Lake Naval Air Warfare Center, California, and the other at 

Veterans Affairs San Diego Health Care System, California.

Additionally, OIG observed two biennial reviews of MML licensees 

conducted by NRC teams during OIG’s fieldwork. One biennial review 

was of the Veterans Affairs radiation safety program in Little Rock, 

Arkansas, and the other was of the Navy radiation safety program in 

Yorktown, Virginia, and Portsmouth, Virginia. OIG observed quarterly 

meetings of the master radiation safety committees for the Air Force 

(Rosslyn, Virginia), Navy (Arlington, Virginia), and Veterans Affairs 

(Washington, DC). OIG reviewed reports of past biennial and annual 

reviews of the MML licensees ranging from 1999 through 2009. These 

reports were located in ADAMS. 

The OIG audit team conducted interviews with managers and staff of NRC 

and of the Air Force, Navy, and Veterans Affairs radiation safety 

programs. Interviews with NRC staff and managers took place in the 

regions that oversee the Master Materials Licenses—Region I (King of 

Prussia, Pennsylvania), Region III (Lisle, Illinois), and Region IV 

(Arlington, Texas). The audit team interviewed FSME managers and staff. 

OIG interviewed representatives of all three MML licensees.

We conducted this performance audit at NRC headquarters and regional 

offices from June 2010 through February 2011 in accordance with 

generally accepted Government auditing standards. Those standards 

require that the audit is planned and performed with the objective of 

obtaining sufficient, appropriate evidence to provide a reasonable basis for 

any findings and conclusions based on the stated audit objective. OIG 

believes that the evidence obtained provides a reasonable basis for the 

report findings and conclusions based on the audit objective. Internal 

controls related to the audit objective were reviewed and analyzed. 

Throughout the audit, auditors were aware of the possibility or existence of 

fraud, waste, or misuse in the program. The audit work was conducted by 

Sherri Miotla, Team Leader; Kevin Nietmann, Senior Technical Advisor; 
Audit of NRC’s Oversight of Master Materials Licensees

30

Michael Zeitler, Audit Manager; Levar Cole, Senior Management Analyst; 

Amy Hardin, Auditor; Dana Furstenau, Management Analyst; and Steven 

Galeski, Management Analyst.