September 16, 2005 

MEMORANDUM TO: Luis A. Reyes 

Executive Director for Operations 

FROM: Stephen D. Dingbaum/RA/ 

Assistant Inspector General for Audits 

SUBJECT: STATUS OF RECOMMENDATIONS: AUDIT OF NRC 

BASELINE INSPECTION PROGRAM (OIG-05-A-06) 

REFERENCE: DIRECTOR, OFFICE OF NUCLEAR REACTOR 

REGULATION, MEMORANDUM DATED JULY 26, 2005 

Attached is the Office of the Inspector General=s (OIG) analysis and status of 

recommendations as discussed in the agency=s response dated July 26, 2005. Based 

on this response, recommendations 1, 5, 6, 9, and 10 are closed. Recommendations 

2, 3, 4, 7, and 8 are resolved. Resolved recommendations will be closed when OIG 

receives information confirming that corrective action has been completed on each. 

Please provide an updated status of all recommendations by January 13, 2006. 

If you have any questions or concerns, please call me at 415-5915. 

Attachment: Status of Recommendations 

 cc: W. Dean, OEDO 

M. Malloy, OEDO 

P. Tressler, OEDO 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 1: Document the basis and rationale for the determined baseline inspection 

program sample sizes, including a discussion of when, or why, to use 

more than minimum samples. 

OIG Status: This recommendation will be closed when the Office of the 

Inspector General (OIG) receives and evaluates the 

following documents: 

$ Revised Inspection Manual Chapter (IMC) 0308 

$ Revised Inspection Manual Chapter 2515

Agency Response 

Dated July 26, 2005: Update: IMC 0308 and 2515 documents will be revised to describe 

the basis and rationale for determining the baseline 

inspection sample sizes. Program expectations for 

completing the nominal number of inspection samples 

specified in inspection procedures (IPs) will be added to 

both documents. 

Our target date for completing the revisions to IMC 0308 

and IMC 2515 is July 31, 2005. The Office of Nuclear 

Reactor Regulation (NRR) will provide these documents to 

OIG when they are issued. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, the agency=s actions meet 

the intent of the recommendation and it is therefore closed. 

Status: Closed. 
 Audit Report 

 Audit of NRC Baseline Inspection Program 

 OIG-05-A-06 

 Status of Recommendations 

Recommendation 2: Develop guidance on how to identify human performance trends and how 

that information should be integrated into the reactor oversight process 

(ROP). 

OIG Status: The corrective action identified in the agency=s response 

addresses the intent of OIG=s recommendations. 

However, OIG notes that 1) the staff has indicated that 

programmatic changes in this area will need to be 

consistent with the Commission=s policy on risk-informing 

the ROP, and 2) staff action in this area may require 

Commission approval. As such, OIG believes that an 

action plan, with identified steps and completion dates, 

should be developed in order to measure progress on the 

recommendations between now and September 28, 2007. 

 Moreover, the plan should clearly delineate at what point 

Commission approval for proposed programmatic changes 

will take place.

Agency Response 

Dated July 26, 2005: Update: We agree. We acknowledge the benefits of developing an 

action plan to identify steps, completion dates, and 

Commission approval points. We will develop an action 

plan as recommended. 

Our target date for developing the action plan is December 

31, 2005. Our target date for completing this 

recommendation is September 28, 2007. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, OIG agrees that progress 

is being made to bring this recommendation to closure. OIG will close 

this recommendation when all actions are complete. 

Status: Resolved. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 3: Develop and implement guidance for documenting, tracking, and trending 

informal inspection issues. 

OIG Status: The Agency's response does not address the specifics of 

the report's finding. Specifically, the Agency asserts that 

resources saved from not having to document minor 

findings are intended to be directed toward areas of 

greater risk significance and that the Aadditional@ resources 

required to develop and implement formal tracking and 

trending of minor inspection findings do not justify the 

benefit from such a program. However, the Agency's 

response does not address the crux of the report's finding. 

 In particular, the time already expended by inspectors and 

managers in this area, the inconsistencies in 

implementation and expectations, and the unavailability of 

certain inspection information to the public. 

OIG acknowledges the Agency's plan to request additional 

clarification from the Commission on this recommendation. 

 Therefore, the status of this recommendation will be 

reevaluated subsequent to the Commission's response. 

Agency Response 

Dated July 26, 2005: Update: The staff agrees that additional programmatic guidance is 

needed to address the treatment of minor findings (issues 

or concerns that under program guidance are not 

documented in inspection reports). The staff will revise 

ROP program guidance to emphasize the following points: 

 

- Minor findings are to be reported to the licensee for 

action in accordance with the licensee=s corrective action 

program. Licensees are expected to track and trend 

issues per their program. 

- Inspectors are not to track or trend minor findings on an 

ad hoc basis. Regional managers are expected to ensure 

such tracking and trending does not occur. Inspection 

Procedure 71152, AProblem Identification and Resolution,@

directs inspectors to perform a semi-annual trend review. 

Inspectors are allowed to consider minor findings and 

issues as part of this trend review, and can document the 

results in accordance with IP 71152. This review samples 

both NRC and licensee identified items. Results of the 

IP71152 inspection are considered as part of the licensee 
performance assessment process defined in IMC 0305, 

AOperating Reactor Assessment Program.@ 

Our target date for completing this action is December 31, 

2005. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, OIG agrees that progress 

is being made to bring this recommendation to closure. OIG will close 

this recommendation when all actions are complete. 

Status: Resolved. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 4: Define Aeffectiveness@ as it pertains to the ROP and establish 

performance measures and targets to demonstrate that the baseline 

inspection program meets that definition. 

OIG Status: The proposed corrective action addresses the intent of 

OIG's recommendation. The closure of this 

recommendation will be determined based upon OIG's 

receipt and analysis of the staffs revisions to the ROP 

performance measures. 

Agency Response 

Dated July 26, 2005: Update: We agree. We will incorporate our definition of proposed 

performance measure effectiveness into a future revision 

to IMC 0307, AReactor Oversight Self-Assessment 

Program.@ 

Our target date for completing the revision to IMC 0307 is 

December 31, 2005. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, OIG agrees that progress 

is being made to bring this recommendation to closure. OIG will close 

this recommendation when the revision to IMC 0307 is complete. 

Status: Resolved. 

Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 5: Develop a planned, scheduled approach for phasing out the use of the 

coping measures. 

OIG Status: Some of the corrective actions discussed in the Agency's 

response appear to address the intent of OIG's 

recommendation. Specifically, the increase in inspection 

full-time equivalent (FTE) staff positions, once filled with 

experienced inspectors, should alleviate some of the 

challenges. However, other Agency claims are contrary to 

the report's findings. For example, the Agency states that 
the revised staffing policy and the additional FTE will 

improve site staffing levels with experienced and qualified 

inspectors. Yet, the report states that circumstances 

restrict the opportunity to implement the new staffing 

policy, and that regions have experienced difficulties in 

keeping positions filled with seasoned inspectors, despite 

aggressive recruiting. Filling positions does not equate to 

having fully qualified, experienced inspectors available.

Therefore, this recommendation cannot be closed until 

OIG receives and evaluates evidence that the coping 

measures have been rescinded. 

Agency Response 

Dated July 26, 2005: Update: In 2002, coping measures were necessary to complete the 

baseline inspection program because there was a 

shortage of qualified inspectors and inspection resources 

intended for baseline inspections were diverted to respond 

to unanticipated emerging events and external demands. 

Completing baseline inspections was a concern primarily 

in Regions I and III because of unusual demands related to 

events at Indian Point 2 and Davis-Besse and, in some 

cases, the high turnover of qualified inspectors through 

promotions, reassignments, and retirements. 

As a result, the regions implemented strategies to avert the 

possibility of not completing the calendar year (CY) 2002 

baseline inspection program. The CY 2003 inspection 

cycle was impacted to some extent by the coping 

strategies implemented in 2002, such as the deferral of 

inspector counterpart meetings and the rescheduling of 

biennial and triennial inspections to the next inspection 

cycle (a measure that primarily affected Division of 

Reactor Safety (DRS) regional inspectors, not Division of 

Reactor Safety (DRP) resident inspectors). 

To avoid the inspection resource challenges of 2002 in the 

future, the staff evaluated the inspection resource needs in 

the four regions. As a result, the regional budget for 

operating reactor inspection activities for FY 2004 and 

beyond was increased by approximately 15 FTE, in part, to 

support the oversight of a potential IMC 0350 plant and to 

assist in post-supplemental-inspection oversight activities. 

The additional resources should alleviate future challenges 

in completing the baseline inspections and the need for 

coping measures. 
The staff also revised the resident inspector policy to allow 

early assignment of new resident and senior resident 

inspectors to a site. The new policy which is described in 

IMC 2515, Section 11.01, item 7, allows the regional 

administrator to assign a permanent resident inspector up 

to 12 months before the planned departure of the 

incumbent resident and to assign senior residents up to 6 

months before the departure of the incumbent senior 

resident. 

The effects of these measures are already evident in the 

2004 inspection cycle as reported in SECY-05-0070, 

Attachment 8. Actual inspection effort in 2004 increased 

about 9% from 2003, which indicates the staff is no longer 

coping at minimum inspection levels. This increased 

inspection effort was achieved with no assistance from 

headquarters in 2004. 

Some stakeholders have suggested that the use of basic 

certified inspectors as resident inspectors has continued 

on a significant scale and the staff may still be using basic 

certified inspectors as a coping measure. 

Basic qualified inspectors have been assigned to fill 

resident inspector positions for several years, and this 

practice is expected to continue. Assigning basic certified 

inspectors as resident inspectors is allowed by program 

guidelines as described in IMC 1245, Section 03.02, and is 

not a coping measure. The use of basic qualified 

inspectors has not occurred on a significant scale B

analysis and further refinement of demographic data 

provided in SECY-05-0070, Attachment 9, show that basic 

qualified inspectors were only about 12 percent of the 

resident inspectors in November 2004. 
Thus, there is ample evidence that the coping measures 

implemented in 2002 have been rescinded and are no 

longer being used to complete the baseline inspection 

program. Keeping resident inspector positions staffed with 

seasoned inspectors, succession planning, recruitment, 

retirement planning, and staff turnover are human resource 

issues that are not specific to the ROP or the coping 

measures implemented in 2002. These issues should be 

resolved through continuing human resource 

management. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, the agency=s actions meet 

the intent of the recommendation and it is therefore closed. 

Status: Closed. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 6: Provide additional management guidance for assigning inspectors to 

perform IPs to ensure that inspectors are adequately qualified for their 

assignments. 

OIG Status: The proposed corrective action addresses the intent of 

OIG's recommendation. This recommendation will be 

closed when OIG receives and evaluates the additional 

guidance. 

Agency Response 

Dated July 26, 2005: Update: We are revising IMC 2515, ALight-Water Reactor 

Inspection Program B Operations Phase,@ to include more 

guidance on ensuring that inspectors are adequately 

qualified for their assignments. The Inspection Program 

Branch (IIPB) reviewed the IPs to determine who performs 

the IPs, and examined the training required by IMC 1245, 

AQualification Program for the Office of Nuclear Reactor 

Regulation Programs.@ Based on our review, we believe 

the best way to ensure inspectors are adequately qualified 

for certain inspections is to specify which IPs are 

performed by regional specialists. Otherwise, the 

remaining IPs will be performed by resident inspectors and 

regional specialists with resident inspector experience. 

Our target date for completing this action is July 31, 2005. 

NRR will provide IMC 2515 to OIG when it is issued. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, the agency=s actions meet 

the intent of the recommendation and it is therefore closed. 

Status: Closed. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 7: Provide guidance for vendor-specific training in resident inspector training 

requirements. 

OIG Status: While agreeing with the importance of having its inspectors 

trained in the proper reactor technology, the Agency's plan 

to consider a change to the inspector qualification program 

rather than commit to take action does not address the 

intent of this recommendation. 

Agency Response 

Dated July 26, 2005: Update: We recognize the importance of training resident 

inspectors to understand the specific reactor technology at 

their plants. The staff developed a feedback form (1245-

850) for the IMC 1245 inspector qualification to address 

this recommendation. In May 2005, the IMC 1245 

management steering group (MSG), consisting of regional 

division/deputy division directors and the program office 

branch chief, discussed the feedback form. The MSG 

decided to revise IMC 1245 to require vendor-specific 

training for operations inspectors within 2 years of 

assignment to a new location. 

Our target date for completing the revision to IMC 1245 to 

require the vendor-specific training within two years of 

assignment is September 30, 2005. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, OIG agrees that progress 

is being made to bring this recommendation to closure. OIG will close 

this recommendation when the revision to IMC 1245 is complete. 

Status: Resolved. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 8: Improve baseline inspection program guidance to include: 

a. direction for implementing a baseline inspection program 

completion tracking process using RPS (Reactor Program 

System) to collect inspection completion data at a plant level and 

in real-time, 

b. how to document completion and sample 

sizes in inspection reports, 

and 

c. whether performance of one inspection procedure sample can be 

counted as a sample for another. 

OIG Status: The proposed corrective actions address the intent of 

OIG's recommendation. However, the recommendation, in 

total, cannot be closed until OIG receives and evaluates 

the enhancement to the Inspection Manual Chapter (IMC) 

0306 and any additional guidance proposed in response to 

parts b) and c) of this recommendation. 

Agency Response 

Dated July 26, 2005: Update: a. We have already implemented actions to address 

this recommendation. The ability to track 

procedure completion in real time was implemented 

by an enhancement to the RPS in 2003 and is 

described in Section 05.03 of IMC 0306, 

AInspection Procedure Status and Sample Sizes.@ 

 

This section also gives specific guidance on how to 

update the number of completed inspection 

samples and the completion status of the 

inspection procedure. 

IMC 0306 is available at ADAMS Accession No. 

ML050840189. 

In addition, as a result of the 2003 enhancement, 

several reports have been added to the RPS to 

provide real-time information and tracking of 

inspection procedure completion at all operating 

reactor sites. 
Additional enhancements are currently being 

implemented in the RPS to ensure the quality of the 

information entered into the system and to control 

the data after they are entered. IMC 0612, 

AInspection Reports@ will require that inspection 

reports specify Awhat was inspected@ and Awhich 

and how many samples were inspected@ (see 

recommendation 8.b below). This requirement will 

ensure that the number of samples listed in 

inspection reports agree with the number of 

completed samples reported in RPS. Once the 

numbers of samples are certified in RPS, the field 

is locked and the numbers cannot be changed 

without authorization. 

These enhancements will be effective with the 

September 2005 release of RPS. 

b. We are revising IMC 0612, AInspection Reports@ to 

require sample sizes to be stated as part of 

inspection documentation. The revised guidance 

will require inspectors to identify what was 

inspected and how many samples were inspected. 

Our target date for completing the IMC-0612 

revision is September 30, 2005. 

c. We are revising IMC 2515, ALight-Water Reactor 

Inspection Program B Operations Phase@ to provide 

additional guidance on when completion of one 

inspection procedure sample can be counted as a 

sample for another. Performance of one inspection 

procedure sample can be counted as a sample for 

another procedure only if completed inspection 

requirements are common to each procedure. 

Our target date for completion is July 31, 2005. 

NRR will provide IMC 2515 to OIG when it is 

issued. 

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, the agency=s actions on 

subparts 8a and 8c meet the intent of the recommendations and are 

therefore closed. 

Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, OIG agrees that progress 

is being made to bring subpart 8b to closure. OIG will close this subpart 

and the entire recommendation when the revision to IMC 0612 is 

complete. 

Status: Resolved. 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 9: Clarify existing guidance regarding the expectations and requirements for 

invoking the new completion criteria. 

OIG Status: The proposed corrective action addresses the intent of 

OIG's recommendation. This recommendation will be 

closed once OIG receives and evaluates the revised 

guidance.

Agency Response 

Dated July 26, 2005: Update: We are revising IMC 2515, ALight-Water Reactor 

Inspection Program B Operations Phase,@ to include 

guidance on program expectations and requirements for 

invoking the new completion criteria. 

Our target for completion is July 31, 2005. NRR will 

provide IMC 2515 to OIG when it is issued.

OIG Analysis: Based on the agency=s response and the additional information provided 

at an August 25, 2005 meeting with NRR staff, the agency=s actions meet 

the intent of the recommendation and it is therefore closed. 

Status: Closed.

 
Audit Report 

Audit of NRC Baseline Inspection Program 

OIG-05-A-06 

Status of Recommendations 

Recommendation 10: Provide a method for tracking IPs not performed as required by year=s end in 

order to ensure that each region stays within the four-procedure allowance.

OIG Status: The proposed corrective action addresses the intent of OIG's 

recommendation. This recommendation will be closed once 

OIG receives and evaluates the additional guidance. 

Agency Response 

Dated July 26, 2005: Update: We have proposed a change to IMC 2515, ALight-Water 

Reactor Inspection Program B Operations Phase,@ to require 

the regions to track inspection procedure completion so that 

each region stays within the four-procedure allowance. 

Our target date for completion is July 31, 2005. NRR will 

provide IMC 2515 to OIG when it is issued. 

OIG Analysis: Based on the agency=s response and the additional information provided at 

an August 25, 2005 meeting with NRR staff, the agency=s actions meet the 

intent of the recommendation and it is therefore closed. 

Status: Closed.