Summary of Performance and Financial Information n Fiscal Year 2014

MISSION

License and regulate the Nation’s civilian use of radioactive 

materials to protect public health and safety, promote 

the common defense and security, and protect the environment.

Public Protection Notification

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information 

collection requirement unless the requesting document displays a currently valid Office of Management and Budget (OMB) 

control number.

NUREG-1542, Vol. 20, Supp. 1, has been reproduced from the best available copy.
h t t p : / / www.nrc.gov i n Protecting People and the Environment

Table of Contents

A MESSAGE FROM THE CHAIRMAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ABOUT THE NRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

THE NUCLEAR INDUSTRY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

PROGRAM PERFORMANCE OVERVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

FUTURE CHALLENGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

THE INSPECTOR GENERAL’S ASSESSMENT OF THE MOST SERIOUS MANAGEMENT 

AND PERFORMANCE CHALLENGES FACING THE NRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

MESSAGE FROM THE CHIEF FINANCIAL OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

FINANCIAL PERFORMANCE OVERVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SUMMARY FINANCIAL STATEMENT HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

MANAGEMENT ASSURANCES, SYSTEMS, CONTROLS, AND LEGAL COMPLIANCE. . . . . . . . . . . 21

INSPECTOR GENERAL’S TRANSMITTAL LETTER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

INDEPENDENT AUDITORS’ REPORT ON THE SUMMARY FINANCIAL STATEMENTS. . . . . . . . . 26

SUMMARY FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

SUMMARY OF FINANCIAL STATEMENT AUDIT AND MANAGEMENT ASSURANCES. . . . . . . . . 30

BIBLIOGRAPHIC DATA SHEET. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

This report is a summary of the U.S. Nuclear Regulatory Commission’s (NRC’s) Fiscal Year (FY) 2014 Performance and 

Accountability Report (PAR), published on November 17, 2014. This report is in an easy-to-read format and is available 

on the NRC Web site at http://www.nrc.gov. In addition, a video message from the Chairman and a full copy of the PAR 

are available on the DVD located on the back inside cover.
ii Summary of Performance and Financial Information n Fiscal Year 2014

The U.S. Nuclear Regulatory Commission (NRC) Headquarters
h t t p : / / www.nrc.gov n Protecting People and the Environment 1

A Message from the Chairman

I am pleased to present the U.S. Nuclear Regulatory Commission’s (NRC’s) Summary of 

Performance and Financial Information for Fiscal Year (FY) 2014. This summary presents 

the NRC’s continuing success in achieving our mission to ensure the safe and secure use of 

radioactive materials for beneficial civilian purposes while protecting people and the environment. 

The summary also provides key financial and performance information to Congress and the 

American people of how we used our resources during FY 2014. The summary is available at 

http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1542/.

The NRC is an independent regulatory agency devoted to the effective and efficient oversight 

during FY 2014 of the Nation’s 100 operating nuclear reactors, 31 research and test reactors, and 

the four reactors currently being decommissioned. The NRC reviews all safety aspects of new 

reactor designs, environmental siting, combined license applications, and provides oversight for 

the four nuclear reactors currently under construction. Further, the agency focuses on the safe and 

secure use of nuclear materials in the energy, medical and industrial sectors through effective oversight of fuel facilities, uranium 

recovery sites, decommissioning sites, and nuclear material user licensees. The NRC met all of its strategic goals, objectives, and 

performance indicator targets in FY 2014.

The NRC is committed to good governance and the prudent management of resources entrusted to it by the American people. 

The agency will continue to evaluate, test, and strengthen its internal control, including those related to financial reporting 

and financial management systems, as required by the Federal Managers’ Financial Integrity Act of 1982 (FMFIA). Based on 

the FMFIA assessments, the previous Chairman concluded that there is reasonable assurance that the agency is in substantial 

compliance with FMFIA, and the financial and performance data published in this summary are complete, accurate, reliable, 

and timely, in accordance with the Reports Consolidation Act of 2000 and Office of Management and Budget Circular A-136 

requirements. Additionally, my predecessor determined that the agency is in substantial compliance with the Federal Financial 

Management Improvement Act of 1996 (FFMIA), based on the NRC’s application of the FFMIA risk model. 

I take great pride in the performance and dedication of NRC employees in achieving the agency’s safety and security goals and look 

forward to continuing the high-quality service the American people have come to expect from us.

Stephen G. Burns

Chairman

February 08, 2015
2 Summary of Performance and Financial Information n Fiscal Year 2014

INTRODUCTION

The U.S. Nuclear Regulatory Commission (NRC) 

Summary of Performance and Financial Information 

presents an overview of the agency’s program performance 

and financial management performance during fiscal year 

(FY) 2014, which covers the period from October 1, 2013, 

to September 30, 2014. This summary report provides an 

opportunity for the American public to assess how effectively 

the NRC uses its funds to achieve results. 

When preparing this report, the NRC staff followed the 

guidance of the Office of Management and Budget (OMB) 

Circular A-136, “Financial Reporting Requirements.” The 

summarized financial statement data are based on the same 

underlying data as the financial statements presented in the 

FY 2014 Performance and Accountability Report (PAR).

ABOUT THE NRC

The U.S. Congress established the NRC on January 19, 1975, 

as an independent Federal agency regulating the commercial 

and institutional uses of nuclear materials. The Atomic Energy 

Act of 1954, as amended, and the Energy Reorganization Act 

of 1974, as amended, define the NRC’s purpose. These acts 

provide the foundation for the NRC’s mission to regulate the 

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

materials to ensure adequate protection of public health and 

safety, to promote the common defense and security, and 

to protect the environment. The agency regulates civilian 

nuclear power plants and other nuclear facilities, as well as 

other uses of nuclear materials. These other uses include 

nuclear medicine programs at hospitals; academic activities at 

educational institutions; research work; industrial applications, 

such as gauges and testing equipment; and the transport, 

storage, and disposal of nuclear materials and wastes.

The NRC is headed by a Commission composed of five 

members, with one member designated by the President 

to serve as Chairman. With the advice and consent of the 

Senate, the President appoints each member to serve a 5-year 

term. The Chairman is the principal executive officer and 

official spokesperson for the Commission. The Executive 

Director for Operations carries out program policies and 

decisions made by the Commission.

The NRC’s Headquarters is located in Rockville, MD. 

The NRC has an Operations Center in the Headquarters 

building that coordinates communications with its licensees, 

State agencies, and other Federal agencies. This center is the 

focal point for assessing and responding to operating events in 

the industry. The NRC operations officers staff the Operations 

Center 24 hours a day, seven days a week.

The agency also has four regional offices located in King of 

Prussia, PA; Atlanta, GA; Lisle, IL; and Arlington, TX. The 

regional offices allow the agency to work closely with its 

licensees to ensure safety. The NRC also employs at least 

two resident inspectors at each of the Nation’s nuclear power 

reactor sites. 

The NRC’s new budget authority for FY 2014 was 

$1,055.9 million, with 3,815 full-time equivalent staff. 

The NRC is primarily supported by fees collected from 

its licensees.
h t t p : / / www.nrc.gov n Protecting People and the Environment 3

THE NUCLEAR INDUSTRY

The NRC is responsible for regulating all aspects of the 

civilian nuclear industry. The industry can best be described 

by examining the nuclear material cycle. The nuclear material 

cycle begins with the mining and production of nuclear fuel or 

the use of nuclear materials for medical, industrial, and other 

applications; continues with the use of nuclear fuel to power 

the Nation’s 100 nuclear power plants; and ends with the safe 

transportation and storage of spent nuclear fuel and other 

nuclear waste. The NRC’s regulatory programs ensure that 

radioactive materials are used safely and securely at every stage in 

the nuclear material cycle. To address safety and security issues, 

the NRC has developed regulatory practices, knowledge, and 

expertise specific to each activity in the nuclear material cycle.

FUEL FACILITIES 

The production of nuclear fuel begins at uranium mines where 

milled uranium ore is used to produce a uranium concentrate 

called “yellow cake.” At a special facility, the yellow cake is 

converted into uranium hexafluoride gas and loaded into 

cylinders. The cylinders are sent to a gaseous diffusion plant, 

where uranium is enriched for use as reactor fuel. The enriched 

uranium is then converted into oxide powder, fabricated into 

fuel pellets (each about the size of a fingertip), loaded into 

metal fuel rods about 3.5 meters long, and bundled into reactor 

fuel assemblies at a fuel fabrication facility. Assemblies are 

then transported to nuclear power plants, non-power research 

reactor facilities, and naval propulsion reactors for use as fuel 

(see Figure 1). The NRC licenses eight major fuel fabrication 

and production facilities and three enrichment facilities in 

the United States. Because they handle extremely hazardous 

material, these facilities take special precautions to prevent 

theft, diversion by terrorists, and dangerous exposures to 

workers and the public from this nuclear material. 

Figure 1 – The Nuclear Fuel Cycle

Natural

Uranium

Heap

Leach

Milling

In Situ Mining

Uranium Recovery

Disposal

Reactor

Storage

Pool Dry Cask

Reprocessed

Uranium

Depleted

Uranium

Fuel

Fabrication

Fresh

UO2

Fresh

MOX

Spent

UO2

Spent

MOX

Reprocessing Facility

MOX

UO2

Enriched

Uranium Deconversion of

Depleted Uranium

Uranium-Plutonium

Mixture

Conversion

Enrichment

REACTORS 

To generate electricity, power plants change one form of energy 

into another. Electrical generating plants convert heat energy, 

the kinetic energy of wind or falling water, or solar energy, into 

electricity. Other types of heat-conversion plants burn coal, 

oil, or gas to produce heat energy that is then used to produce 

electricity. Nuclear energy cannot be seen. Heat energy is not 

produced by burning fuel in the usual sense. Rather, energy is 

given off by the nuclear fuel as certain types of atoms split in 

a process called nuclear fission. This energy is in the form of 

fast-moving particles and invisible radiation. As the particles 

and radiation move through the fuel and surrounding water, the 

energy is converted into heat, which generates electricity. The 

radiation energy can be hazardous, and facilities take special 

precautions at nuclear power plants to protect people and the 

environment from these hazards.

Because the fission reaction produces potentially hazardous 

radioactive materials, nuclear power plants are equipped 

with safety systems to protect workers, the public, and the 

environment. Radioactive materials require careful use because 

they produce radiation, a form of energy that can damage 

human cells. Depending on the amount and duration of the 
4 Summary of Performance and Financial Information n Fiscal Year 2014

exposure, radiation can potentially cause cancer. In a nuclear 

reactor, most hazardous radioactive substances, called fission 

byproducts, are trapped in the fuel pellets or in the sealed 

metal tubes holding the fuel. However, small amounts of these 

radioactive fission byproducts, principally gases, become mixed 

with the water passing through the reactor. Other impurities 

in the water also become radioactive as they pass through the 

reactor. The facility processes and filters the water to remove 

these radioactive impurities and then returns the water to the 

reactor cooling system.

MATERIALS USERS

The medical, academic, and industrial fields all use nuclear 

materials. For example, about one-third of all patients 

admitted to U.S. hospitals are diagnosed or treated using 

radioisotopes. Most major hospitals have specific departments 

dedicated to nuclear medicine. In all, about 112 million 

nuclear medicine or radiation therapy procedures are performed 

annually, with the vast majority used in diagnoses. Radioactive 

materials used as a diagnostic tool can identify the status of 

a disease and minimize the need for surgery. Radioisotopes 

give doctors the ability to look inside the body and observe 

soft tissues and organs, in a manner similar to the way x rays 

provide images of bones. Radioisotopes carried in the blood 

also allow doctors to detect clogged arteries or check the 

functioning of the circulatory system. 

The same property that makes radiation hazardous can also 

make it useful in treating certain diseases like cancer. When 

living tissue is exposed to high levels of radiation, cells can 

be destroyed or damaged. Doctors can selectively expose 

cancerous cells (cells that are dividing uncontrollably) to 

radiation to either destroy or damage these cells.

WASTE DISPOSAL

During normal operations, a nuclear power plant generates 

both high-level radioactive waste, which consists of spent fuel 

(usually called spent fuel), and low-level radioactive waste, 

which includes contaminated equipment, filters, maintenance 

materials, and resins used in purifying water for the reactor 

cooling system. Other users of radioactive materials also 

generate low-level waste.

Nuclear power plants handle each type of radioactive waste 

differently. They must use special procedures in handling the 

spent fuel because, it contains the highly radioactive fission 

byproducts created while the reactor was operating. Typically, 

the spent fuel from nuclear power plants is stored in waterfilled pools at each reactor site or at a storage facility in Illinois. 

The water in the spent fuel storage pool provides cooling and 

adequately shields and protects workers from the radiation. 

Several nuclear power plants have also begun using dry casks 

to store spent fuel. These heavy metal or concrete casks rest on 

concrete pads adjacent to the reactor facility. The thick layers 

of concrete and steel in these casks shield workers and the 

public from radiation. 

PROGRAM PERFORMANCE 

OVERVIEW

The NRC’s Strategic Plan describes the agency’s mission, goals, 

and strategies. The Strategic Plan can be found on the NRC 

Web site at http://www.nrc.gov/reading-rm/doc-collections/

nuregs/staff/sr1614/v6/. The agency’s two strategic goals are 

focused on Safety and Security. The Safety goal is to Ensure 

the safe use of radioactive materials. The Security goal is to 

Ensure the secure use of radioactive materials. 

Because the nature of the agency’s Safety and Security strategic 

objectives is to prevent or minimize undesirable outcomes, the 

desired trend for all of its performance indicators is to maintain 

these outcomes at either zero or at very low levels. 

Safety

Nuclear Reactor 

Safety

New Reactors

Operating Reactors

Security

Nuclear Materials and

Waste Safety

Fuel Facilities

Nuclear Materials Users

Decommissioning and Low-Level Waste

Spent Fuel Storage

and Transportation

Strategic Goals

Major Programs

Activities
h t t p : / / www.nrc.gov n Protecting People and the Environment 5

Ensure the safe use of radioactive materials.

Strategic Goal 1:

STRATEGIC OBJECTIVE

Strategic objectives more specifically express the results that are 

needed to achieve a strategic goal. The strategic objective for 

Goal 1 is: 

Prevent and mitigate accidents and ensure radiation safety.

Minimizing the likelihood of accidents and reducing the 

consequences of an accident (should one occur) are the key 

elements for achieving the NRC’s Safety goal. Such accidents, 

particularly for large complex facilities like nuclear power 

plants, have the potential to release significant amounts of 

radioactive material to the environment and expose facility 

workers and the public to high levels of radiation. Even in 

the absence of accidents, radiological hazards exist during 

routine operations, and the NRC ensures that measures are 

in place to minimize exposure for workers and the public and 

prevent unintended releases of radioactive materials to the 

environment. 

SAFETY GOAL STRATEGIES

The agency used the following safety strategies from its 

strategic plan to guide its activities and to achieve its Safety 

goal in FY 2014: 

Safety Strategy 1: 

Enhance the NRC’s regulatory programs as appropriate using 

lessons learned from domestic and international operating 

experience and other sources. 

Safety Strategy 2:

Enhance the risk-informed and performance-based regulatory 

framework in response to advances in science and technology, 

policy decisions, and other factors.

Safety Strategy 3:

Ensure the effectiveness and efficiency of licensing and 

certification activities to maintain both quality and timeliness 

of licensing and certification reviews.

Safety Strategy 4: 

Maintain effective and consistent oversight of licensee 

performance to drive continued licensee compliance with NRC 

safety requirements and license conditions.

Safety Strategy 5: 

Ensure the NRC’s readiness to respond to incidents and 

emergencies involving NRC-licensed facilities and radioactive 

materials and other events of domestic and international 

interest.

Safety Strategy 6: 

Ensure that nuclear facilities are constructed in accordance 

with approved designs and that there is an effective transition 

from oversight of construction to oversight of operation.

Safety Strategy 7: 

Ensure that the environmental and site safety regulatory 

infrastructure is adequate to support the issuance of new 

nuclear licenses. 

FY 2014 RESULTS

In FY 2014, the NRC achieved its Safety goal strategic 

objective. The NRC also uses six performance indicators to 

determine whether it has met its Safety goal. The agency met 

all six performance indicator targets in FY 2014 (see Table 1).

The first three performance indicators focus on performance at 

individual nuclear power plants. Inspection results show that 

all of the nuclear power plants are operating safely. For the 

first indicator, a red finding or performance indicator signals a 

significant reduction in the safety margin in the measured area. 

The fourth indicator tracks the trends of several key indicators 

of nuclear power plant safety. This indicator is the broadest 

measure of the safety of nuclear power plants, incorporating 

the performance results from all plants to determine industry 

average results. This indicator shows that there were no 

statistically significant adverse trends in any of the indicators 

in FY 2014.

The last two safety performance indicators track harmful 

radiation exposures to the public and occupational workers and 

radiation exposures that harm the environment. Neither of 

these two indicators exceeded their targets in FY 2014.

The cost of achieving the agency’s Safety goal in FY 2014 was 

$998.1 million.
6 Summary of Performance and Financial Information n Fiscal Year 2014

1. Number of new conditions evaluated as red by the NRC’s Reactor Oversight Process1

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3

Actual 0 0 1 1 0 0

1 This indicator is the number of new red inspection findings during the fiscal year plus the number of new red performance indicators during the fiscal year.  Programmatic 

issues at multi-unit sites that result in red findings for each individual unit are considered separate conditions for purposes of reporting for this indicator.  A red 

performance indicator and a red inspection finding that are due to an issue with the same underlying causes are also considered separate conditions for purposes of 

reporting for this indicator.  Red inspection findings are included in the fiscal year in which the final significance determination was made.  Red performance indicators 

are included in the fiscal year in which the Reactor Oversight Process (ROP) external Web page was updated to show the red indicator.

2. Number of significant accident sequence precursors2 (ASPs) of a nuclear reactor accident

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target 0 0 0 0 0 0

Actual 0 0 0 0 0 0

2 Significant Accident Sequence Precursor (ASP) events have a conditional core damage probability (CCDP) or ΔCDP of > 1 x 10-3. Such events have a 1/1000 (1 x 10-3) 

or greater probability of leading to a reactor accident involving core damage.  An identical condition affecting more than one plant is counted as a single ASP event if a 

single accident initiator would have resulted in a single reactor accident.

3. Number of operating reactors with integrated performance that entered the multiple/repetitive degraded 

cornerstone column or the unacceptable performance column of the Reactor Oversight Process Action 

Matrix, or the Inspection Manual Chapter 0350 process with no performance leading to the initiation of 

an Accident Review Group3

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3

Actual 0 0 2 1 0 0

3 This indicator is the number of plants that have entered the Manual Chapter 0350 process, the multiple/repetitive degraded cornerstone column, or the unacceptable 

performance column during the fiscal year (i.e., were not in these columns or process the previous fiscal year). Data for this indicator is obtained from the NRC external 

Web site’s Action Matrix Summary page, which provides a matrix of the five columns with the plants listed within their applicable column and notes the plants in the 

Manual Chapter 0350 process. For reporting purposes, plants that are the subject of an approved deviation from the Action Matrix are included in the column or process 

in which they appear on the Web page. The target value is set based on the expected addition of several indicators and a change in the long-term trending methodology 

(which will no longer be influenced by the earlier data and will be more sensitive to changes in current performance).

4. Number of significant adverse trends in industry safety performance4

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1

Actual 0 0 0 0 0 0

4 Considering all indicators qualified for use in reporting.

5. Number of events with radiation exposures to the public or occupational workers that exceed Abnormal 

Occurrence Criterion I.A.35

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Reactors Target 0 0 0 0 0 0

Reactors Actual 0 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2

Materials Actual 0 0 0 0 0 1

Waste Target 0 0 0 0 0 0

Waste Actual 0 0 0 0 0 0

5 Releases for which a 30-day report requirement under Title 10 of the Code of Federal Regulations (10 CFR) 20.2203(a)(3) is required.

Table 1 – FY 2014 Safety Performance Indicators
h t t p : / / www.nrc.gov n Protecting People and the Environment 7

6. Number of radiological releases to the environment that exceed applicable regulatory limits6

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Reactors Target5 0 0 0 0 0 0

Reactors Actual 0 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2

Materials Actual 0 0 0 0 0 0

Waste Target 0 0 0 0 0 0

Waste Actual 0 0 0 0 0 0

6 With no event exceeding AO Criterion I.B.  

FUKUSHIMA REGULATORY 

REVIEW

The NRC’s efforts to implement the lessons learned from the 

Fukushima Dai-ichi accident in March 2011 continued during 

FY 2014. Nuclear power plants in the United States have 

made great progress in implementing the near-term actions 

to address natural disasters that may challenge the design 

bases of these plants. The agency oversaw implementation 

of new requirements to address hazards such as earthquakes 

and flooding. The NRC has also been using the insights from 

Fukushima to inform its licensing and oversight activities. The 

agency has been conducting technical studies and regulatory 

analyses to ensure the safe operation of existing reactors and 

to be applied to new reactors. A more complete discussion 

of the review and the subsequent actions taken by the NRC 

can be found in Chapter 2 of the FY 2014 Performance and 

Accountability Report under “Operating Reactors Oversight.” 

Additional information can be found on the agency Web site 

http://www.nrc.gov/reactors/operating/ops-experience/japaninfo.html

Ensure the secure use of radioactive materials.

Strategic Goal 2:

STRATEGIC OBJECTIVES

Strategic objectives more specifically express the results that are 

needed to achieve a strategic goal. The strategic objectives for 

Goal 2 are: 

Table 1 – FY 2014 Safety Performance Indicators (continued)

Ensure protection of nuclear facilities and radioactive 

materials. 

Protecting nuclear facilities and radioactive materials is the 

key element for achieving the NRC’s Security goal. Nuclear 

facilities and materials are protected against hostile intent 

by two primary means: (1) control of access to facilities and 

materials, and (2) accountability controls for radioactive 

materials. These controls are intended to prevent those with 

hostile intent from either damaging a nuclear facility in such 

a way that a significant release of radioactive materials to the 

environment occurs or obtaining enough radioactive material 

for malevolent use. 

Ensure protection of classif ied and Safeguards Information 

Protecting classified and Safeguards Information is another 

key contributor to achieving the agency’s Security goal. 

This is accomplished primarily by controlling access to this 

information to ensure that potential adversaries cannot use it 

for malevolent purposes, such as sabotage, theft, or diversion of 

radioactive materials. 

The strategic objectives specify the conditions that must be met 

for the agency to ensure the secure use of radioactive materials. 

SECURITY GOAL STRATEGIES

The agency used the following security strategies from its 

Strategic Plan to guide its activities and achieve its Security 

goal in FY 2014:

Security Strategy 1: 

Ensure the effectiveness and efficiency of the regulatory 

framework using information gained from operating experience
8 Summary of Performance and Financial Information n Fiscal Year 2014

and external and internal assessments and in response to 

technology advances and changes in the threat environment.

Security Strategy 2: 

Maintain effective and consistent oversight of licensee 

performance to drive continued licensee compliance with NRC 

security requirements and license conditions.

Security Strategy 3:

Support U.S. national security interests and nuclear 

nonproliferation policy objectives within NRC’s statutory 

mandate through cooperation with domestic and international 

partners.

Security Strategy 4:

Ensure material control and accounting for special nuclear 

materials

Security Strategy 5:

Protect critical digital assets.

Security Strategy 6:

Ensure timely distribution of security information to 

stakeholders and international partners.

Security Strategy 7:

Ensure that programs for the handling and control of classified 

and Safeguards Information are effectively implemented at the 

NRC and at licensee facilities.

FY 2014 RESULTS

In FY 2014, the NRC achieved its Security goal strategic 

objectives. The NRC also uses five Security goal performance 

indicators to determine whether the agency has met its 

Security goal. The agency met all five performance indicator 

targets in FY 2014 (see Table 2). 

The first performance indicator tracks unrecovered losses or 

thefts of risk-significant radioactive sources. The indicator 

ensures that those radioactive sources that the agency has 

determined to be risk-significant to the public health and 

safety are accounted for at all times. The ability to account for 

these sources is critical to secure the nation from “dirty bomb” 

attacks or other means of radiation dispersal. There were no 

such losses or thefts in FY 2014.

The second, third, and fourth performance indicators evaluate 

the number of significant security events and incidents that 

occur at NRC-licensed facilities. These indicators determine 

whether nuclear facilities maintain adequate protective forces 

to prevent theft or diversion of nuclear material or sabotage; 

whether systems in place at licensee plants accurately account for 

the type and amount of materials processed, used, or stored; and 

whether the facilities account for special nuclear material at all 

times with no losses of this material. There were no events that 

met the conditions for these indicators in FY 2014.

The last security indicator tracks significant unauthorized 

disclosures of classified and/or Safeguards information 

that may cause damage to national security or public safety. 

This indicator focuses on whether classified information 

or Safeguards Information is stored and used in such a 

way as to prevent its disclosure to the public, terrorist 

organizations, other nations, or personnel without a need to 

know. Unauthorized disclosures can harm national security 

or compromise public health and safety. The indicator also 

focuses on whether controls are in place to maintain and secure 

the various devices and systems (electronic or paper based) that 

the agency and its licensees use to store, transmit, and use this 

information. There were no documented disclosures of this 

type of information during FY 2014.

The cost of achieving the agency’s Security goal was 

$68.5 million in FY 2014.
h t t p : / / www.nrc.gov n Protecting People and the Environment 9

Table 2 – FY 2014 Security Performance Indicators

1. Unrecovered loss of risk-significant1 radioactive sources

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target 0 0 0 0 0 0

Actual 0 0 12 0 0 0

1 “Risk-significant” is defined as any unrecovered lost or abandoned sources that exceed the values listed in Appendix P to 10 CFR Part 110 – Category 1 and 2 Radioactive 

Material.  Excluded from reporting under this criterion are those events involving sources that are lost or abandoned under the following conditions: (1) sources abandoned in 

accordance with the requirements of 10 CFR 39.77(c); (2) recovered sources with sufficient indication that doses in excess of the reporting thresholds specified in AO Criteria 

I.A.1 and I.A.2 did not occur during the time the source was missing; (3) unrecoverable sources lost under such conditions that doses in excess of the reporting thresholds specified 

in AO Criteria I.A.1 and I.A.2 were not known to have occurred; (4) other sources that are lost or abandoned and declared unrecoverable; (5) for which the agency has made 

a determination that the risk-significance of the source is low based upon the locations (e.g., water depth) or physical characteristics (e.g., half-life, housing) of the source and its 

surroundings; (6) where all reasonable efforts have been made to recover the source;, and (7) it has been determined that the source is not recoverable and will not be considered 

a realistic safety or security risk under this indicator. (This includes licenses under the Agreement States.)

2 There were no losses and one theft of radioactive nuclear material that the NRC considered to be the risk significant during FY 2011. 

2. Number of substantiated3 cases of actual theft or diversion of licensed, risk-significant radioactive sources 

or formula quantities4 of special nuclear material; or attacks that result in radiological sabotage5

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target 0 0 0 0 0 0

Actual 0 0 0 0 0 0

3 “Substantiated” means a situation in which an indication of loss, theft, or unlawful diversion such as an allegation of diversion cannot be refuted following an 

investigation and requires further action on the part of the agency or other proper authorities.

4 A formula quantity of special nuclear material is defined in 10 CFR 70.4, “Definitions.”

5 “Radiological sabotage” is defined in 10 CFR 73.2, “Definitions.”   

3. Number of substantiated losses of formula quantities of special nuclear material or substantiated 

inventory discrepancies of formula quantities of special nuclear material that are judged to be caused by 

theft or diversion or by substantial breakdown of the Accountability System

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target 0 0 0 0 0 0

Actual 0 0 0 0 0 0

4. Number of substantial breakdowns6 of physical security or material control (i.e., access control, 

containment, or accountability systems) that significantly weakened the protection against theft, 

diversion, or sabotage

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1

Actual 0 0 0 0 0 0

6 A “substantial breakdown” is defined as a red finding in the security cornerstone of the ROP, or any plant or facility determined to either have overall unacceptable 

performance or be in a shutdown condition (inimical to the effective functioning of the Nation’s critical infrastructure) as a result of significant performance problems and/

or operational events.  

5. Number of significant unauthorized disclosures7 of classified and/or Safeguards Information

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Target 0 0 0 0 0 0

Actual 0 0 0 0 0 0

7 “Significant unauthorized disclosure” is defined as a disclosure that harms national security or public health or safety.  
10 Summary of Performance and Financial Information n Fiscal Year 2014

FUTURE CHALLENGES

The nuclear industry has maintained an excellent safety record 

at nuclear power plants over the past two decades as both 

the nuclear industry and the NRC have gained substantial 

experience in the operation and maintenance of nuclear power 

facilities. However, maintaining this excellent safety record of 

the industry requires that the agency take a proactive approach 

to accomplishing its mission. The key challenges that the 

agency faces as the regulator of nuclear materials are to ensure 

the safe and secure use of radioactive materials in areas where 

the NRC regulates. 

MARKET PRESSURES ON 

OPERATING PLANTS AND LICENSE 

APPLICATIONS 

Market forces result in pressures to reduce operating costs. As 

a result, the NRC needs to be prepared to address potential 

shutdowns of facilities before license expiration and to continue 

to ensure that oversight programs identify degrading facility 

safety and security performance. Conversely, the lower capital 

costs of small modular reactors (under 300 megawatts) may 

offer industry a more attractive option to add new capacity. 

Several entities are seeking to submit license applications 

for small modular reactors in the next several years. The 

Department of Energy is funding a program “to design, certify 

and help commercialize innovative small modular reactors 

(SMRs) in the United States.” The NRC is developing a 

licensing framework for these as well as other advanced reactors. 

SIGNIFICANT OPERATING 

INCIDENT AT A NON- U.S. 

NUCLEAR FACILITY 

A significant incident at a nuclear facility outside the United 

States could cause the agency to reassess its safety and security 

requirements, which could change the agency’s focus on some 

initiatives related to its objectives until the situation stabilizes. 

SIGNIFICANT OPERATING 

INCIDENT AT A DOMESTIC 

NUCLEAR FACILITY 

A significant incident at a U.S. nuclear facility could cause the 

agency to reassess its safety and security requirements, which 

could change the agency’s focus on some initiatives related to 

its objectives until the situation stabilizes. Because the NRC’s 

stakeholders are highly sensitive to many issues regarding the 

use of radioactive materials, even events of relatively minor 

safety significance could potentially require a response that 

consumes considerable agency resources. 

INTERNATIONAL NUCLEAR 

STANDARDS DEVELOPMENTS 

International organizations, such as the International Atomic 

Energy Agency (IAEA), will continue to develop and issue 

standards and guidance affecting global commitments to 

nuclear safety and security. To ensure that the best results are 

achieved both domestically and internationally, the NRC needs 

to proactively engage in these international initiatives and to 

provide leadership in a cooperative and collegial manner. 

INTERNATIONAL TREATIES AND 

CONVENTIONS 

As part of the international response to lessons learned 

from the Fukushima Dai-ichi nuclear accident in Japan, the 

international nuclear regulatory community is reviewing the 

Convention on Nuclear Safety. As one of the contracting 

parties to the Convention, the NRC is a member of the 

working group that is reviewing the Convention. Likewise, 

the NRC participates in the Joint Convention on the Safety 

of Spent Fuel Management and on the Safety of Radioactive 

Waste Management. 
h t t p : / / www.nrc.gov n Protecting People and the Environment 11

GLOBALIZATION OF THE 

NUCLEAR TECHNOLOGY AND THE 

NUCLEAR SUPPLY CHAIN 

Components for nuclear facilities are increasingly 

manufactured overseas, resulting in challenges of providing 

effective oversight to ensure that these components are 

in compliance with NRC requirements. In addition, the 

continuing globalization of nuclear technology is driving the 

need for increasing international engagement on the safe use of 

radioactive material. 

SIGNIFICANT TERRORIST 

INCIDENT 

A sector-specific credible threat or actual significant terrorist 

incident anywhere in the United States would result in the 

Department of Homeland Security (DHS) raising the threat 

level under the National Terrorism Advisory System (NTAS). 

In turn, the NRC would similarly elevate the oversight and 

response stance for NRC-regulated facilities and licensees. 

Potentially, new or revised security requirements or other 

policy decisions might affect the NRC, its partners, and 

the regulated community. In a similar fashion, a significant 

terrorist incident at a nuclear facility or activity anywhere in the 

world would need to be assessed domestically and potentially 

lead to a modification of existing security requirements for 

NRC-regulated facilities and licensees.

TREATIES AND CONVENTIONS 

The ratification by the United States of international 

instruments related to the security of nuclear facilities or 

radioactive materials could potentially impose binding 

provisions on the Nation and the corresponding governmental 

agencies, such as the NRC and the Department of Energy (DOE). 

LEGISLATIVE AND EXECUTIVEBRANCH INITIATIVES 

Congressional and Executive Branch initiatives concerning 

cyber security may potentially impact the NRC’s regulatory 

framework for nuclear security. If the NRC were to become 

concerned about an aspect of a bill or policy initiative that had 

been introduced, the staff would consult the Commission to 

develop a strategy for making such concerns known. 

LOST, MISPLACED, INTERCEPTED, 

OR DELAYED INFORMATION 

With the increased use of mobile devices and alternative 

storage options, the introduction of new communication 

technologies, and the increased use of telecommunication, 

there is a heightened risk that sensitive information held by the 

NRC or its licensees can be lost, misplaced, or intercepted and 

fall into the hands of unauthorized persons.
12 Summary of Performance and Financial Information n Fiscal Year 2014

BACKGROUND

On January 24, 2000, Congress enacted the Reports Consolidation Act of 2000, requiring Federal agencies to provide financial and 

performance management information in a more meaningful and useful format for Congress, the President, and the public. The act 

requires the Inspector General (IG) of each Federal agency to annually summarize what he or she considers to be the most serious 

management and performance challenges facing the agency and to assess the agency’s progress in addressing those challenges.

To accomplish this assessment, the NRC IG considered the overall work of the Office of the Inspector General (OIG), the OIG 

staff ’s general knowledge of agency operations, and other relevant information to develop and update the list of management and 

performance challenges and assess the agency’s progress in addressing these challenges. In addition, beginning in 2012, OIG staff 

performed an analysis of the past 10 years of audit findings and assigned them to performance categories, such as internal controls, 

accountability and communications. Approximately 540 audit findings and recommendations were analyzed. Every year since, 

OIG staff incorporated new audit findings into this analysis. As part of the most recent analysis – which focused on the last 5 

years of audit findings and recommendations – OIG staff identified a total of eight performance categories that are supported by 

the audit findings. These categories represent the most serious management and performance challenges facing the agency. They 

relate directly to the mission-oriented management challenges in past OIG reports in that improvement in the eight performance 

categories supports improvement in the past mission-oriented challenge areas. The audit-based categories also support enhancing 

performance in NRC strategic areas and management objectives.

Likewise, the Investigations staff of OIG analyzed 5 years of investigation information for identification of performance trends 

and opportunities to improve performance. A total of 287 investigations were reviewed. This information was evaluated for 

applicability to the audit based categories already identified and sorted on that basis as it applied. Additionally, the investigation 

information was analyzed for any other trends and one additional management challenge category (cyber security) was developed.

These nine categories are more specific and actionable than those in past NRC OIG management and performance challenge 

reports. They represent significant opportunities for the agency to improve performance affecting its strategic goals and 

management objectives. The agency’s performance relative to the new challenge areas will be evaluated by OIG as new information 

becomes available, including audit and investigative findings and Issue Area Monitoring.1

 As OIG notes improved performance in 

a challenge, the challenge will be removed, as warranted.

ASSESSMENT RESULTS

NRC’s mission is to license and 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. Like 

other Federal agencies, NRC faces management and performance challenges in carrying out its mission.

1Through OIG’s Issue Area Monitor (IAM) program, OIG staff designated as IAMs are assigned responsibility for keeping abreast of major agency 

programs and activities. The broad IAM areas address nuclear reactors, nuclear materials, nuclear waste, information management, security, 

financial and administrative programs, human resources, and international programs.

Th e I n s p e c t o r G e n e r a l ’ s A s s e s s m e n t o f t h e M o s t S e r i o u s 

Management and Performance Challenges Facing the NRC
h t t p : / / www.nrc.gov n Protecting People and the Environment 13

Congress left the determination and threshold of what constitutes a most serious management and performance challenge to the 

discretion of the IGs.

The NRC IG has defined serious management and performance challenges as mission critical areas or programs that have the potential 

for a perennial weakness or vulnerability that, without substantial management attention, would seriously impact agency operations 

or strategic goals. Based on this definition, the IG identified the following as the most serious management and performance 

challenges facing NRC as of October 1, 2014:

Most Serious Management and 

Performance Challenges Facing 

NRC as of October 1, 2014 (as 

identified by the Inspector General)

1 Internal Controls.

2 Guidance and Procedures.

3 Training.

4 Acquisition, Contracting, and Procurement.

5 Project Management.

6 Internal Communication and Coordination.

7 Human Capital Management.

8 Accountability.

9 Cyber Security.

The agency provided formal comments on this report; these comments and OIG’s response to the comments are included in the 

full report.

Th e I n s p e c t o r G e n e r a l ’ s A s s e s s m e n t o f t h e M o s t S e r i o u s 

Management and Performance Challenges Facing the NRC
14 Summary of Performance and Financial Information n Fiscal Year 2014

Message from the Chief Financial Officer

I am pleased to present the summary financial statements for the U.S. Nuclear Regulatory 

Commission (NRC) Fiscal Year (FY) 2014 Summary of Performance and Financial Information. 

For the eleventh consecutive year, an independent auditor has rendered an unmodified opinion 

on the NRC financial statements. The auditor has also rendered an unqualified opinion on our 

internal control over financial reporting, concluding that the NRC is compliant with pertinent 

provisions of laws and regulations.

Receiving this most recent clean opinion was particularly satisfying since FY 2014 presented 

continuing challenges in workload and budgetary conditions. The NRC ensured that personnel 

were paid on time and travelers were accommodated during the Government shutdown. The 

NRC remained open seven business days longer than a majority of Federal agencies due to 

management of agency carryover funding to cover salaries and benefits for NRC employees. 

Once a Continuing Resolution was passed, the agency quickly resumed normal operations. The 

NRC managed through budget uncertainty to allocate its resources to address the highest priority 

regulatory activities and effectively account for the use of funds in its financial statements due to 

the talent and dedication of the agency’s financial managers and staff.

The agency has continued to make substantial progress in modernizing its financial systems in FY 2014. The Strategic 

Acquisition System (STAQS), the agency-wide procurement system that automates a previously manual business function, became 

operational. The real-time interface of STAQS ensures the agency is properly handling all procurement financial transactions 

with the core ledger system, the Financial Accounting and Integrated Management Information System. An agency-wide Spend 

Plan application for contractual funds utilization was added to the Budget Formulation System. During FY 2014, the NRC 

continued to provide routine financial management system user training while enhancing reporting needs based on evolving NRC 

business functions. The agency also continued upgrade plans to move to the E-Gov Travel Service 2 system and Time and Labor 

Modernization system to address legislative requirements, strengthen controls, and further automate system processes.

The NRC’s continued the use of its Programmatic Internal Control framework in FY 2014 based upon Federal agency standards 

for best practices. This framework streamlined and improved the processes and administrative requirements and provides a more 

interdependent approach to ensure the effectiveness of the agency’s programmatic internal controls.

The NRC is committed to ensuring the safety and security of the Nation’s civilian use of radioactive materials in the most effective 

and efficient manner. The regulation of the Nation’s nuclear industries during times of fiscal and regulatory challenges requires 

careful stewardship of limited agency resources and demands superior financial performance. I am proud that we have continued 

using sound business practices to accomplish our regulatory mission and am confident that we will continue such improvements in 

the future.

Maureen E. Wylie

Chief Financial Officer

February 17, 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 15

FINANCIAL PERFORMANCE 

OVERVIEW

The NRC prepared its financial statements in accordance 

with the accounting standards codified in the Statements of 

Federal Financial Accounting Standards (SFFAS) and OMB 

Circular A-136, “Financial Reporting Requirements.”

As of September 30, 2014, the financial condition of the NRC 

was sound with respect to having sufficient funds to meet 

program needs and adequate control of these funds in place to 

ensure that obligations did not exceed budget authority. 

SOURCES OF FUNDS 

New Budget Authority. The NRC has two appropriations, 

Salaries and Expenses and the Office of the Inspector General. 

The new FY 2014 budget authority was $1,055.9 million, 

which included $1,043.9 million for the Salaries and Expenses 

appropriation and $12.0 million for the Office of the Inspector 

General. 

Table 4 – New Budget Authority 

(In Millions)

Appropriation FY 2014 FY 2013

Salaries and Expenses $ 1,043.9 $ 1,027.2

 Less: Sequestration – (51.7)

 Less: Rescission – (.3)

 New Budget Authority 1,043.9 975.2

Office of the Inspector General 12.0 10.9

 Less: Sequestration – (.5)

 Less: Rescission – –

 New Budget Authority 12.0 10.4

Total New Budget Authority $ 1,055.9 $ 985.6

The new budget authority increased $70.3 million compared 

to the prior year ($68.7 million for the Salaries and Expenses 

appropriation and $1.6 million for the Office of the Inspector 

General). The increase was primarily due to a $16.7 million 

increase in appropriations and the FY 2013 reduction of 

$52.5 million in funding resulting from the sequestration and 

rescission of funds returned to the Treasury.

The Salaries and Expenses new budget authority is available 

until expended. This includes a provision that not more than 

$9.5 million be made available for the Office of the Commission 

as a 2-year (FY 2014/2015) appropriation that is available for 

obligation by the NRC through September 30, 2015. After 

September 30, 2015, the remaining funds that have not been 

obligated for the Office of the Commission are available until 

expended as part of the Salaries and Expenses appropriation. 

The Office of the Inspector General’s new budget authority 

is a 2-year (FY 2014/2015) appropriation that is available for 

obligation through September 30, 2015. This 2-year funding 

includes $0.9 million for Inspector General services for the 

Defense Nuclear Facilities Safety Board.

The Omnibus Budget Reconciliation Act of 1990 (OBRA-90), 

as amended, requires the NRC to collect fees to offset 

approximately 90 percent of its new budget authority, less the 

amount appropriated to the NRC from the Nuclear Waste 

Fund (NWF) and amounts appropriated for waste incidental 

to reprocessing and generic homeland security. Fees collected 

are returned to the Treasury during the fiscal year to offset 

the NRC’s two appropriations.

Figure 2 – Sources of Funds for 

New Budget Authority

Reactor

Fees

900

800

700

600

500

400

300

200

100

0

IN MILLIONS

Material

Fees

$761.6$789.8

2013

$90.3 $81.4

$0.0

Nuclear

Waste Fund

Treasury 

General Fund

$184.7

$133.7

2014

$0.0

The projected amount to be recovered from fees in FY 2014 

was $930.7 million, which included $916.7 million from 

FY 2014 reactor and materials fees and $14.0 million from 

other fees (unpaid current-year invoices and terminated 

reactors’ FY 2014 annual fee collections, offset by payments 
16 Summary of Performance and Financial Information n Fiscal Year 2014

of prior year invoices in FY 2014). The NRC collected and 

transferred $871.2 million to the Treasury, which represents 

93.6 percent of the approximately $930.7 million projected to 

be recovered. Fees collected and transferred to the Treasury 

in FY 2014 increased $19.3 million from the FY 2013 

amount of $851.9 million, mainly due to the increase in new 

budget authority.

Total Budget Authority. The total budget authority available 

for the NRC to obligate in FY 2014 was $1,119.1 million 

and included $1,055.9 million of new budget authority, 

$22.8 million of prior-year appropriations, $9.0 million from 

prior-year funding for reimbursable work, $10.6 million of 

recoveries of prior-year unpaid obligations, $9.8 million of 

FY 2014 reimbursable work performed for other Federal 

agencies and commercial customers, and $11.0 million of 

prior-year funding for resources received from the DOE 

to fund NRC activities associated with the Nuclear Waste 

Policy Act of 1982, as amended. Funds available to obligate in 

FY 2014 increased $49.2 million from the FY 2013 amount of 

$1,069.9 million primarily due to an increase of $70.3 million 

in new budget authority, offset by decreases in the beginning 

unobligated balance brought forward of $20.1 million, and 

actual recoveries of prior-year unpaid obligations and spending 

authority from offsetting collections of $1.0 million. 

USES OF FUNDS

Funds are used when the NRC incurs obligations against 

budget authority. Obligations are legally binding agreements 

that will result in an outlay of funds.

The NRC incurred obligations of $1,065.6 million in 

FY 2014, which represented an increase of $38.5 million 

from the FY 2013 amount of $1,027.1 million (see Figure 3). 

Approximately 56 percent of obligations in FY 2014 were 

used for salaries and benefits. The NRC used the remaining 

44 percent to obtain technical assistance for the NRC’s 

principal regulatory programs, to conduct confirmatory safety 

research, to cover operating expenses (e.g., building rentals, 

transportation, printing, security services, supplies, office 

automation, and training), and to pay for staff travel. 

Figure 3 – Uses of Funds 

(Obligations)

Salaries and

Benefits

IN MILLIONS

Travel Grants

$592.3 $596.5 2013

$23.4 $24.6 $7.5 $5.2

$388.6$410.4

Reimbursable

Work

Contract

Support

$15.3$28.9

2014

700

600

500

400

300

200

100

0

The unobligated budget authority available at the end of 

FY 2014 was $53.5 million, which was a $10.7 million increase 

from the FY 2013 amount of $42.8 million. Of the 

$53.5 million unobligated balance at the end of FY 2014, 

$8.3 million was for reimbursable work, $4.8 million was for 

the NWF, $6.2 million was for special purpose funds, and 

$34.2 million was available to fund critical NRC needs in 

FY 2015. The $42.8 million unobligated balance at the end 

of FY 2013 included $9.0 million for reimbursable work, 

$11.0 million for the NWF, and $22.8 million to fund critical 

NRC needs in FY 2014. 

AUDIT RESULTS 

The NRC received an unmodified audit opinion on its FY 2014 

financial statements and an unqualified audit opinion on 

internal controls. The auditors found no reportable instances of 

noncompliance with laws and regulations during the FY 2014 

audit. The Summary of the Financial Statement Audit and 

Management Assurances is included on page 30 of this report.

LIMITATIONS ON THE FINANCIAL 

STATEMENTS

The principal financial statements have been prepared to report 

the financial position and results of operations of the NRC, 

pursuant to the requirements of 31 U.S.C. 3515 (b). While 
h t t p : / / www.nrc.gov n Protecting People and the Environment 17

the statements have been prepared from the books and records 

of the NRC in accordance with generally accepted accounting 

principles for Federal entities and the formats prescribed 

by OMB, the statements are in addition to the financial 

reports used to monitor and control budgetary resources, 

which are prepared from the same books and records. The 

statements should be read with the realization that they are 

for a component of the U.S. Government, a sovereign entity. 

The summary financial statements presented in this report 

(See pages 28 and 29) are drawn from the financial statements 

presented in the FY 2014 PAR.

SUMMARY FINANCIAL 

STATEMENT HIGHLIGHTS 

The NRC’s summary financial statements summarize the 

financial activity and the financial position of the agency. 

ANALYSIS OF THE SUMMARY 

BALANCE SHEET 

The Balance Sheet, which shows the NRC’s assets, liabilities, 

and net position, is summarized in the Summary Balance Sheet 

on page 28.

Assets. The NRC’s total assets (see Figure 4) were 

$587.3 million as of September 30, 2014, representing an 

increase of $64.5 million from the same period of FY 2013. 

Changes in major categories include increases of $59.2 million 

in the Fund Balance with Treasury, $19.8 million in Accounts 

Receivable, Net, and $3.0 million in Other Assets, offset by a 

decrease of $17.5 million in Property & Equipment, Net.

Figure 4 – Asset Summary (In Millions)

Other, $8.0

1%

Property and 

Equipment,

Net, $90.3

16%

Fund Balance

with Treasury, 

$377.4

64%

Accounts

Receivable, 

Net, $111.6

19%

The Fund Balance with Treasury was $377.4 million as of 

September 30, 2014, which accounts for 64 percent of total 

assets. This account represents appropriated funds, license fee 

collections, and other funds maintained at the Treasury to pay 

for current liabilities and to finance authorized purchase 

commitments. The $59.2 million increase in the fund balance 

is primarily the result of an increase in new budget authority 

for FY 2014 of $70.3 million and a decrease in gross outlays of 

$28.6 million, which increases the fund balance, offset by a 

decrease of $39.3 million in the beginning balance compared 

with the prior year. The decrease in gross outlays primarily 

consisted of decreases of $24.3 million in contract 

disbursements, $5.2 million in grant disbursements, and 

$4.2 million in reimbursements collected; offset by increases 

of $4.7 million in salaries and benefits disbursements, and 

$0.3 million in travel costs.

Accounts receivable consists of amounts that other Federal 

agencies and the public owe to the NRC for license fees. 

Accounts Receivable, Net, as of September 30, 2014, was 

$111.6 million, which included an offsetting allowance for 

doubtful accounts of $4.4 million. For FY 2013, the year-end 

Accounts Receivable, Net, balance was $91.8 million, including 

an offsetting allowance for doubtful accounts of $1.8 million. 

The net increase in accounts receivable from the prior year of 

$19.8 million is primarily due to outstanding license fee bills 

where payments were received shortly after the close of the 

fiscal year.

Property and Equipment consists primarily of typical office 

furnishings, leasehold improvements, nuclear reactor simulators, 

and computer hardware and software. (The NRC has no real 

property. The land and buildings where the NRC operates are 

leased from the General Services Administration.) At the end 

of FY 2014, Property and Equipment, Net was $90.3 million, 

a decrease of $17.5 million from the FY 2013 amount of 

$107.8 million. The decrease is primarily due to decreases 

of $12.0 million in leasehold improvements (mainly for the 

write-off for the initial buildout of four floors in the Three 

White Flint North (3WFN) building resulting from a change 

in the lease agreement associated with the NRC vacating the 

space) and a decrease of $5.3 million in information technology 

(IT) software due primarily to amortization of the software, 

which decreases the net book value. Leasehold improvements 
18 Summary of Performance and Financial Information n Fiscal Year 2014

were $75.5 million in FY 2014 and $87.5 million in FY 2013 

and include improvements to the NRC’s leased buildings 

for Headquarters (including the new 3WFN building) and 

regional offices. IT software was $13.6 million in FY 2014 

compared to $18.8 million in FY 2013.

Liabilities. Total Liabilities (see Figure 5) were $124.3 

million as of September 30, 2014, representing an increase 

of $4.8 million from the FY 2013 year-end balance of 

$119.5 million. Accounts Payable, Federal Employee Benefits, 

and Other Liabilities remained approximately the same 

as the prior year. For FY 2014, Other Liabilities include 

$46.9 million in accrued annual leave, $12.3 million in accrued 

funded salaries and benefits, $9.2 million in grants payable, 

$5.5 million in advances received by the NRC for services 

that will be provided, $3.0 million in funded employee benefit 

contributions, $1.6 million in accrued workers’ compensation, 

and $0.9 million in contract holdbacks, capital lease liability, 

and miscellaneous liabilities. 

Figure 5 – Liabilities Summary 

(In Millions)

Federal

Employee

Benefits,

$6.7

5%

 Other* 

$79.4

64%

Accounts

Payable,

$38.2

31%

*Other Liabilities: $46.9 Accrued Annual Leave, $12.3 Accrued 

Salaries and Benefits, $9.2 Grants Payable, $11.0 Other

Total Liabilities include liabilities not covered by budgetary 

resources, which represent expense recognized in the financial 

statements that will be paid from future appropriations. 

The liabilities not covered by budgetary resources were 

$55.2 million for FY 2014 compared to $55.5 million for 

FY 2013, a $0.3 million decrease. For FY 2014, the liabilities 

not covered by budgetary resources represent 44 percent 

of total liabilities and include $46.9 million in unfunded 

accrued annual leave that has been earned but not yet taken, 

$1.6 million in accrued workers’ compensation included in 

Other Liabilities, and $6.7 million as an actuarial estimate of 

accrued future workers’ compensation expenses included in 

Federal Employee Benefits. 

Net Position. The difference between Total Assets and 

Total Liabilities, Net Position, was $463.0 million as of 

September 30, 2014, an increase of $59.7 million from the 

FY 2013 year-end balance. Net Position consists of two 

components: Unexpended Appropriations, the amount of 

spending authority that remains unused at the end of the 

year, and Cumulative Results of Operations, the cumulative 

excess of financing sources over expenses. Unexpended 

Appropriations were $306.2 million at the end of FY 2014, 

an increase of $63.5 million from the prior fiscal year-end. 

Cumulative Results of Operations decreased by $3.8 million 

from $156.8 million in FY 2014 compared to $160.6 million 

in FY 2013. 

ANALYSIS OF THE SUMMARY 

STATEMENT OF NET COST 

The Summary Statement of Net Cost, which links the NRC’s 

program performance to the cost of programs, is shown on 

page 28. 

The Summary Statement of Net Cost represents the gross cost 

(see Figure 6 on page 19) of the NRC’s two major programs 

(Nuclear Reactor Safety and Nuclear Materials and Waste 

Safety) as identified in the NRC Annual Performance Plan, 

offset by earned revenue. The purpose of this statement is to 

link program performance to the cost of programs. The NRC’s 

Net Cost of Operations for the year ended September 30, 2014, 

was $160.0 million, representing a decrease of $50.9 million 

compared to the FY 2013 net cost of $210.9 million. This 

includes a decrease of gross costs of $6.5 million and a decrease 

in earned revenues of $44.3 million, which offset gross costs. 
h t t p : / / www.nrc.gov n Protecting People and the Environment 19

Figure 6 – Gross Costs by Program 

(In Millions)

Nuclear Reactor Safety 

$817.3

77%

Nuclear Materials and 

Waste Safety,

$239.3

23%

Gross Costs. The NRC’s total gross costs were 

$1,056.6 million for FY 2014, a decrease of $6.5 million 

from the prior year’s amount of $1,063.1 million. The 

Nuclear Reactor Safety program gross costs for FY 2014 

were $817.3 million compared to FY 2013 gross costs 

of $831.1 million, a decrease of $13.8 million, and the 

Nuclear Materials and Waste Safety program gross costs 

were $239.3 million compared to FY 2013 gross costs of 

$232.0 million, an increase of $7.3 million. 

The cost of achieving the agency’s Safety and Security goals 

for the agency’s programs for FY 2014 is the gross cost 

presented in the Statement of Net Cost. The total cost for 

achieving the agency’s Safety goal was $988.1 million and the 

cost of achieving the agency’s Security goal was $68.5 million 

(see Figure 7).

Figure 7 – Gross Costs by Strategic 

Goals

Safety

800

600

400

200

0

IN MILLIONS

$766.1

$222.0

$51.2 $17.3

Nuclear Reactor Safety

$95.8 $90.3

Security

Nuclear Materials and Waste Safety

Earned Revenue. Total earned revenue (see Figure 8 on page 20) 

as of September 30, 2014, was $896.6 million, an increase of 

$44.4 million from the September 30, 2013, earned revenue 

of $852.2 million. The Nuclear Reactor Safety program had 

revenues in FY 2014 of $815.1 million compared to FY 2013 

revenues of $760.3 million, an increase of $54.8 million, 

primarily due to increases in operating reactor annual fees 

of $71.0 million; offset by decreases in full-cost new reactor 

fees of $6.3 million and full-cost operating reactor fees of 

$7.4 million. The Nuclear Materials and Waste Safety 

program had revenues from license fees in FY 2014 of 

$81.5 million compared to $92.0 million in FY 2013. The 

decrease of $10.5 million was primarily due to decreases in 

10 CFR Part 171 annual fees for Fuel Facilities of $2.5 million, 

10 CFR Part 170 full-cost fees for Fuel Facilities of 

$4.3 million and Small Materials Users of $2.7 million. 
20 Summary of Performance and Financial Information n Fiscal Year 2014

Figure 8 – Earned Revenue by 

Program (In Millions)

Nuclear Materials 

and Waste Safety,

$81.5

9%

Nuclear Reactor Safety 

$815.1

91%

Fees collected (earned primarily in FY 2014) and returned 

to the Treasury were $871.2 million compared to $851.9 

million in FY 2013 (see Figure 2 on page 15). The increase 

was the result of increased new budget authority in FY 2014, 

which increased the amount of fees from licensees that the 

NRC was required to collect. The NRC is required to collect 

approximately 90 percent of its new budget authority through 

license fee billing. Fees for reactor and materials licensing and 

inspections are collected in accordance with 10 CFR Part 170, 

“Fees for Facilities, Materials, Import and Export Licenses, and 

Other Regulatory Services under the Atomic Energy Act of 1954, 

as amended,” and 10 CFR Part 171, “Annual Fees for Reactor 

Licenses and Fuel Cycle Licenses and Materials Licenses, 

Including Holders of Certificates of Compliance, Registrations, 

and Quality Assurance Program Approvals and Government 

Agencies Licensed by the NRC.” 

ANALYSIS OF THE SUMMARY 

STATEMENT OF CHANGES IN NET 

POSITION

The Statement of Changes in Net Position, which reports 

the NRC’s change in net position for the reporting period, 

is summarized in the Summary Statement of Changes 

in Net Position on page 29. Net position is affected by 

changes in its two components: Cumulative Results of 

Operations and Unexpended Appropriations. In FY 2014, 

the NRC had an increase in Net Position of $59.8 million 

compared to FY 2013 resulting from a decrease of 

$3.8 million in Cumulative Results of Operations, offset by 

an increase of $63.6 million in Unexpended Appropriations.

The decrease in Cumulative Results of Operations 

of $3.8 million was a result of a decrease in financing 

sources of $55.1 million, offset by a decrease in the net 

cost of operations of $50.9 million. In FY 2014, the 

NRC collected $19.1 million more in license fees than in 

FY 2013, resulting in less appropriations used to finance 

operations. Additionally, operating expenses and the 

purchase of capital assets decreased by $39.0 million in 

FY 2014 as compared to FY 2013, offset by a decrease of 

$3.0 million in reimbursable revenue earned for services 

provided. The decrease in the net cost of operations was 

due to an increase of $44.3 million in earned revenue and a 

decrease of $6.5 million in gross costs.

A change in unexpended appropriations results primarily 

from appropriations received being more, or less, than 

appropriations used and adjustments (e.g., sequestration, 

rescission) during the fiscal year. In FY 2014, unexpended 

appropriations increased $63.6 million from FY 2013 due 

to increases of $55.1 million in Appropriations Used and 

$52.5 million resulting from a change in Adjustments, 

which reduced unexpended appropriations in FY 2013 due 

to the sequestration and rescissions; offset by a decrease 

in the beginning balance of unexpended appropriations of 

$42.4 million.
h t t p : / / www.nrc.gov n Protecting People and the Environment 21

MANAGEMENT 

ASSURANCES, SYSTEMS, 

CONTROLS, AND LEGAL 

COMPLIANCE

This section provides information on NRC’s 

compliance with the Federal Managers’ Financial 

Integrity Act of 1982 (Public Law 97-255), OMB 

Circular A-123, Management’s Responsibility 

for Internal Control, and the Federal Financial 

Management Improvement Act of 1996.

FEDERAL MANAGERS’ 

FINANCIAL INTEGRITY ACT

The Federal Managers’ Financial Integrity Act 

of 1982 (Integrity Act) mandates that agencies 

establish internal control to provide reasonable 

assurance that the agency complies with applicable 

laws and regulations; safeguards assets against 

waste, loss, unauthorized use, or misappropriation; 

and properly accounts for and records revenues 

and expenditures. The Integrity Act encompasses 

program, operational, and administrative areas, as 

well as accounting and financial management. It 

also requires the Chairman to provide an assurance 

statement on the adequacy of internal controls 

and on the conformance of financial systems with 

Government-wide standards, shown below.

PROGRAMMATIC INTERNAL 

CONTROL

Internal control is the organization, policy, and procedures 

that help managers achieve intended results and safeguard the 

integrity of their programs. NRC managers are responsible 

for designing and implementing effective internal control in 

their areas of responsibility. Each NRC business and corporate 

support product line manager prepares an annual assurance 

certification that identifies any control weaknesses requiring 

the attention of the NRC Executive Committee on Internal 

Control (ECIC). These certifications are based on internal 

control activities such as probabilistic risk assessments, as well 

as other activities, such as self-assessments, Construction and 

Reactor Oversight Process, Integrated Materials Performance 

Evaluation Program, Fukushima Dai-ichi Task Force Lessons 

Learned, Agency Action Review Meeting outcome, financial 

statement audits, Inspector General and U.S. Government 

Accountability Office audits and reports, and other information 

provided by the congressional committees of jurisdiction. 

The ECIC consists of senior executives from the Office of 

the Chief Financial Officer and the Office of the Executive 

Director for Operations. The agency’s General Counsel and 

Inspector General participate as advisors. 

U.S. NUCLEAR REGULATORY COMMISSION

FISCAL YEAR 2014

FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT 

STATEMENT

The U.S. Nuclear Regulatory Commission (NRC) managers are responsible for establishing 

and maintaining effective internal control and financial management systems that meet 

the objectives of the Federal Managers’ Financial Integrity Act of 1982 (Integrity Act). 

The NRC conducted its assessment of internal control over programmatic operations in 

accordance with Office of Management and Budget (OMS) Circular A-123, Management’s 

Responsibility for Internal Control (A-123) guidelines. Based on the results of this evaluation, 

NRC can provide reasonable assurance that its internal control over programmatic 

operations is in substantial compliance with applicable laws and guidance, and no material 

weaknesses were found as of September 30, 2014.

In addition, the NRC conducted its assessment of the effectiveness of internal control over 

financial reporting, which includes safeguarding of assets and compliance with applicable 

laws and regulations, in accordance with the requirements of Appendix A of A-123. 

Based on the results of the evaluation, the NRC can provide reasonable assurance that its 

internal control over financial reporting as of June 30, 2014, was operating effectively, and 

no material weaknesses were found in the design or operation of the internal control over 

financial reporting.

The NRC can also provide reasonable assurance that its financial systems comply with 

applicable Federal accounting standards as required by the Federal Financial Management 

Improvement Act of 1996.

Allison M. Macfarlane

Chairman

U.S. Nuclear Regulatory Commission

November 12, 2014
22 Summary of Performance and Financial Information n Fiscal Year 2014

The ECIC met to review the reasonable assurance 

certifications provided by the NRC business and corporate 

support product line managers. The ECIC then informed the 

Chairman as to whether the NRC had any internal control 

deficiencies serious enough to require reporting as a weakness 

or noncompliance. 

The NRC’s programmatic and financial internal control 

programs require that internal control deficiencies be 

documented and reported in business line quarterly 

performance reports and internal control plans. Together, both 

ensure that key issues receive senior management attention. 

Combined with the individual assurance statements discussed 

previously, the internal control information in these plans 

provides the framework for monitoring and improving the 

agency’s internal control on an ongoing basis.

FY 2014 INTEGRITY ACT RESULTS

In accordance with Section 2 of the Integrity Act, and 

under the guidance established in OMB Circular A-123, 

“Management’s Responsibility for Internal Control”, NRC 

business and corporate support product line management 

certified that, as of September 30, 2014, there was reasonable 

assurance that internal control was in place to achieve the 

following objectives:

• programs achieved their intended results and are protected 

from waste, fraud, abuse, and mismanagement;

• resources were used consistently with the agency’s mission;

• information systems were authorized and appropriately 

secured;

• laws and regulations were followed; and

• reliable and timely information was obtained, maintained, 

reported, and used for sound decision-making.

Based on management’s certification of reasonable assurance, 

as well as the results of programmatic internal control activities 

such as the Cumulative Effects of Regulation, Reactor 

Oversight Process, Revised Fuel Cycle Oversight Program, 

Integrated Materials Performance Evaluation Program, Waste 

Confidence, independent audit reports, and other sources 

of information, the NRC is able to provide a statement of 

assurance that its programmatic internal control met the 

objectives of the Integrity Act. The NRC has reasonable 

assurance that its internal control is effective and conforms to 

Government-wide standards. 

OMB CIRCULAR A-123 

“MANAGEMENT’S RESPONSIBILITY 

FOR INTERNAL CONTROL”

Internal Control over Financial Reporting

(Appendix A)

In FY 2006, the NRC implemented the requirements of the 

revised OMB Circular A-123, which defined and strengthened 

management’s responsibility for internal control in Federal 

agencies. The revised circular included updated internal 

control standards. Appendix A requires Federal agencies 

to assess the effectiveness of internal control over financial 

reporting and to prepare a separate annual statement of 

assurance as of June 30, 2014.

The NRC adopted a 3-year rotational testing plan for internal 

control over financial reporting. The agency determined that 

three of the nine key processes (financial reporting, revenue, 

and IT) were significant enough to include in the testing 

each year of the 3-year cycle. The remaining six key processes 

were to be tested once in the 3-year cycle, two each year. In 

FY 2014, the NRC continued its assessment of internal 

control over financial reporting. The agency reevaluated its 

scope of financial reports, materiality values, risk assessments, 

key processes, and key controls. Based on the results of this 

evaluation, the NRC can provide reasonable assurance that 

its internal control over financial reporting was operating 

effectively as of June 30, 2014, and that the evaluation found 

no material weaknesses in design or operation of the internal 

controls over financial reporting.

Requirements for Effective Measurement

and Remediation of Improper Payments

(Appendix C)

In the FY 2013 PAR, the NRC continued to report on the 

results of improper payment testing completed in FY 2011. 

The results of that testing allowed the agency to conduct future 

testing and/or risk assessments on a 3-year cycle. During 

FY 2014, the NRC’s plan was to test its commercial payment 

program as previously identified as required for testing on a 

triennial basis, as well as to conduct additional risk assessments 

to determine whether any other programs were susceptible to 

making significant improper payments in accordance with the 
h t t p : / / www.nrc.gov n Protecting People and the Environment 23

Improper Payments Information Act of 2002 (IPIA), as amended 

by the Improper Payments Elimination and Reporting Act of 

2010 (IPERA) and the Improper Payment Elimination and 

Improvement Act of 2012 (IPERIA). In accordance with the 

IPERA and OMB guidance, the NRC focused its efforts in 

FY 2014 toward conducting a new risk assessment around its 

commercial payment program and other programs that were 

susceptible to making significant improper payments. 

The results of the FY 2014 risk assessment did not identify 

any programs that are susceptible to making significant 

improper payments. While the results of the FY 2014 risk 

assessment identified programs as low risk, the NRC is taking 

this opportunity to continue to improve controls around 

its payment processes. The NRC will continue to monitor 

payment processes in FY 2015, in addition to conducting 

periodic reviews of key controls for IPIA programs identified 

by management. We will continue to conduct risk assessments 

every 3 years, in accordance with the IPIA, as amended by 

IPERA and IPERIA, as well as OMB guidance. When OMB 

releases the revised Circular A-123, Appendix C, we will 

review the new guidance to determine the impact it has on 

the NRC’s current IPIA program. The next NRC IPIA risk 

assessment will take place in FY 2017. However, the NRC 

will conduct risk assessments, as needed, if there are material 

changes in the way programs operate or if new programs are 

established. 

FEDERAL FINANCIAL 

MANAGEMENT IMPROVEMENT 

ACT

The Federal Financial Management Improvement Act of 1996 

(FFMIA) requires each agency to implement and maintain 

systems that comply substantially with (1) Federal financial 

system requirements, (2) applicable Federal accounting 

standards, and (3) the standard general ledger at the transaction 

level. FFMIA requires the Chairman to determine whether 

the agency’s financial management system complies with 

FFMIA and to develop remediation plans for systems that do 

not comply.

FY 2014 FFMIA RESULTS

In accordance with guidance established in OMB Circular 

A-127, “Policies and Standards for Financial Management 

Systems,” the Chief Financial Officer reviewed audit reports 

and other sources of information, and as of September 30, 

2014, can provide reasonable assurance that NRC’s financial 

systems substantially comply with applicable Federal 

accounting standards as required by the Federal Financial 

Management Improvement Act of 1996 (Improvement Act).

FINANCIAL MANAGEMENT 

SYSTEMS STRATEGIES

The NRC continued to make substantial progress in FY 2014 

in modernizing its financial systems. The Strategic Acquisition 

Systems (STAQS), the agency-wide procurement system 

that automates a previous manual business function went 

live in the beginning of FY 2014.  STAQSs real-time interface 

procurement financial transactions transmits to the core ledger 

system, the Financial Accounting and Integrated Management 

Information System (FAIMIS).   Also during FY 2014, the 

Budget Formulation System (BFS) has had an agency-wide 

Spend Plan application for contractual funds utilization added 

to its capabilities. The NRC continued to provide routine 

financial system management user system training while 

enhancing reporting needs based on evolving NRC business 

functions.  The agency maintained its upgrade plans to move 

to the E-Gov Travel Service 2 (ETS2) system and Time and 

Labor Modernization (TLM) system to address legislative 

requirements, strengthen controls, and further automate 

system processes.  

PROMPT PAYMENT

The Prompt Payment Act of 1982, as amended, requires 

Federal agencies to make timely payments to vendors for 

supplies and services, to pay interest penalties when payments 

are made after the due date, and to take cash discounts 

when they are economically justified.  In FY 2014, the NRC 

paid 98 percent of the 8,159 invoices subject to the Prompt 

Payment Act on time.
24 Summary of Performance and Financial Information n Fiscal Year 2014

DEBT COLLECTION

The Debt Collection Improvement Act of 1996 enhances the 

ability of the Federal Government to service and collect 

debts. The agency’s goal is to maintain the level of delinquent 

debt owed to the NRC at year end to less than 1 percent of 

its annual billings. The NRC met this goal. At the end of 

FY 2014, delinquent debt was $15.8 million or 1 percent 

of annual billings. The NRC was able to refer 99.1 percent of 

all eligible debt over 180 days delinquent to the Treasury for 

collection. This success was due to an extensive cleanup effort 

resulting from the deployment of a new accounting system 

and process changes. The NRC hopes to continue this success 

through FY 2015

BIENNIAL REVIEW OF USER FEES 

The Chief Financial Officers Act of 1990 requires agencies to 

conduct a biennial review of fees, royalties, rents, and other 

charges imposed by agencies and to make revisions to cover 

program and administrative costs incurred. On June 30, 2014, 

the NRC issued a final rule in the Federal Register amending 

the licensing, inspection, and annual fees charged to its 

applicants and licensees. The amendments are necessary to 

implement the Omnibus Budget Reconciliation Act of 1990

(OBRA–90), as amended, which requires the NRC to recover 

through fees approximately 90 percent of its budget authority, 

not including amounts appropriated for Waste Incidental to 

Reprocessing (WIR) and amounts appropriated for generic 

homeland security activities. Based on the Consolidated and 

Further Continuing Appropriations Act of 2014, the NRC’s 

required fee recovery amount for the FY 2014 budget was 

projected at approximately $930.7 million. After accounting 

for billing adjustments, the total amount to be billed as fees to 

licensees is $916.7 million. The NRC Fee Recovery Schedules 

for FY 2014 are located at http://www.gpo.gov/fdsys/pkg/

FR-2014-06-30/pdf/2014-15193.pdf. 

INSPECTOR GENERAL ACT OF 1978

The NRC has established and continues to maintain an 

excellent record in resolving and implementing Office of the 

Inspector General open audit recommendations. The status of 

these recommendations can be found at http://www.nrc.gov/

reading-rm/doc-collections/insp-gen/.
h t t p : / / www.nrc.gov n Protecting People and the Environment 25

Inspector General’s Transmittal Letter

UNITED STATES

NUCLEAR REGULATORY COMMISSION 

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

February 12, 2015

MEMORANDUM TO: Chairman Burns 

FROM: Hubert T. Bell /RA/

 Inspector General 

SUBJECT: TRANSMITTAL OF THE INDEPENDENT AUDITORS’

REPORT ON THE SUMMARY FINANCIAL STATEMENTS 

(OIG-15-A-10) 

Office of Management and Budget Circular No. A-136, Financial Reporting 

Requirements, Revised, September 18, 2014, requires all entities covered under The 

Chief Financial Officer’s Act of 1990 to prepare a summary of performance and financial 

information which summarizes performance and accountability results for the fiscal 

year. The summary report should include the most important performance and financial 

information contained in NRC’s Performance and Accountability Report in a brief, userfriendly format that is easily understood by a reader with little technical background in 

these areas. The purpose of this memorandum is to transmit CliftonLarsonAllen LLP 

(CLA) Auditors’ Report on the Summary Financial Statements. NRC publishes this

report and summary financial statements as part of the “Fiscal Year 2014 Summary of 

Performance and Financial Information.” 

CLA is responsible for the attached auditors’ report, dated February 12, 2015. The 

Office of the Inspector General (OIG) is responsible for technical and administrative 

oversight regarding the firm’s performance under the terms of the contract. Our 

oversight of CLA’s work, as differentiated from an audit in conformance with 

Government Auditing Standards, was not intended to enable us to express, and 

accordingly we do not express, an opinion on the summary financial statements 

included in the summary report. However, OIG’s oversight of CLA’s work disclosed no 

instances where CLA did not comply with applicable auditing standards. 

We appreciate the cooperation provided by NRC staff. 

Attachment: As stated 

cc: Commissioner Svinicki 

 Commissioner Ostendorff 

Commissioner Baran 

M. Satorius, EDO 

M. Wylie, CFO
26 Summary of Performance and Financial Information n Fiscal Year 2014

Independent Auditors’ Report on

the Summary Financial Statements

CliftonLarsonAllen LLP

www.cliftonlarsonallen.com

INDEPENDENT AUDITORS’ REPORT ON SUMMARY FINANCIAL STATEMENTS 

Inspector General

United States Nuclear Regulatory Commission

Chairman

United States Nuclear Regulatory Commission

The accompanying summary financial statements, which comprise the summary balance sheets 

as of September 30, 2014 and 2013, the summary statements of net cost and summary 

statements of changes in net position for the years then ended are derived from the audited 

financial statements of the United States Nuclear Regulatory Commission (NRC) as of and for 

the years ended September 30, 2014 and 2013, and the related notes, which collectively 

comprise the NRC’s basic financial statements. We expressed an unmodified audit opinion on 

those audited financial statements in our report dated November 7, 2014. The audited financial 

statements, and the summary financial statements derived therefrom, do not reflect the effects 

of events, if any, that occurred subsequent to the date of our report on the audited financial 

statements.

The summary financial statements do not contain the statement of budgetary resources and all 

the disclosures required by accounting principles generally accepted in the United States of 

America. Reading the summary financial statements, therefore, is not a substitute for reading 

the audited financial statements of NRC. 

Management's Responsibility for the Summary Financial Statements

Management is responsible for the preparation of the summary financial statements in 

accordance with accounting principles generally accepted in the United States of America. 

Auditors’ Responsibility

Our responsibility is to express an opinion about whether the summary financial statements are 

consistent, in all material respects, with the audited financial statements based on our 
h t t p : / / www.nrc.gov n Protecting People and the Environment 27

INDEPENDENT AUDITORS’ REPORT ON SUMMARY FINANCIAL STATEMENTS, 

CONTINUED

procedures, which were conducted in accordance with auditing standards generally accepted in 

the United States of America and the standards applicable to financial audits contained in 

Government Auditing Standards, issued by the Comptroller General of the United States. The 

procedures consisted principally of comparing the summary financial statements with the related 

information in the audited financial statements from which the summary financial statements 

have been derived, and evaluating whether the summary financial statements are prepared in 

accordance with accounting principles generally accepted in the United States of America. We 

did not perform any audit procedures regarding the audited financial statements after the date of 

our report on those financial statements. 

Opinion

In our opinion, the summary financial statements of the NRC as of and for the years ended 

September 30, 2014 and 2013 referred to above are consistent, in all material respects, with the 

audited financial statements from which they have been derived, in accordance with accounting 

principles generally accepted in the United States of America. 

CliftonLarsonAllen LLP

Arlington, Virginia

February 12, 2015
28 Summary of Performance and Financial Information n Fiscal Year 2014

Summary Balance Sheet* (In Thousands)

As of September 30, 2014 2013

Assets

Fund balance with Treasury $ 377,391 $ 318,244 

Accounts receivable, net 111,567 91,808 

Property and equipment, net 90,280 107,771 

Other 8,076 4,952

Total Assets $ 587,314 $ 522,775 

Liabilities

Accounts payable $ 38,185 $ 38,048 

Federal employee benefits 6,669 7,023 

Other 79,416 74,427 

Total Liabilities 124,270 119,498 

Net Position

Unexpended appropriations 306,226 242,640 

Cumulative results of operations 156,818 160,637

Total Net Position 463,044 403,277 

Total Liabilities and Net Position $ 587,314 $ 522,775 

Summary Statement of Net Cost* (In Thousands) 

For the years ended September 30, 2014 2013

Nuclear Reactor Safety

Gross costs $ 817,279 $ 831,114

Less: Earned revenue (815,037) (760,283) 

Total Net Cost of Nuclear Reactor Safety 2,242 70,831 

Nuclear Materials and Waste Safety

Gross costs 239,305 232,011 

Less: Earned revenue (81,515) (91,959) 

Total Net Cost of Nuclear Materials and Waste 157,790 140,052 

Net Cost of Operations $ 160,032 $ 210,883

Summary Financial Statements
h t t p : / / www.nrc.gov n Protecting People and the Environment 29

Summary Statement of Changes in Net Position* (In Thousands)

For the years ended September 30, 2014 2013

Cumulative Results of Operations

Beginning Balance $ 160,637 $ 160,194

Budgetary Financing Sources 121,264 176,651

Other Financing Sources 34,949 34,675

Net Cost of Operations (160,032) (210,883)

Net Change (3,819) 443

Cumulative Results of Operations $ 156,818 $ 160,637

Unexpended Appropriations 

Beginning Balance $ 242,640 $ 285,080 

Budgetary Financing Sources 63,586 (42,440)

Total Unexpended Appropriations 306,226 242,640 

Net Position $ 463,044 $ 403,277 

* For a complete set of financial statements and notes, see Chapter 3, “Financial Statements and Auditors’ Report,” beginning 

on page 69 of the FY 2014 PAR. This report can be accessed on the NRC Web site at http://www.nrc.gov/reading-rm/

doc-collections/nuregs/staff/sr1542/.

Summary Financial Statements
30 Summary of Performance and Financial Information n Fiscal Year 2014

S u m m a r y o f F i n a n c i a l S t a t e m e n t A u d i t 

and Management Assurances**

SUMMARY OF FINANCIAL STATEMENT AUDIT FOR FY 2014

Audit Opinion – Unmodified Restatement – No Material Weaknesses – No

SUMMARY OF MANAGEMENT ASSURANCES FOR FY 2014

Effectiveness of Internal Control over Financial Reporting and Operations (FMFIA § 2) 

Statement of Assurance – Unqualified Material Weaknesses – No

Conformance with Financial Management System Requirements (FMFIA § 4) 

Statement of Assurance – Systems conform to financial management 

systems requirements Nonconformance – No

Compliance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor 

Systems Requirements, Accounting 

Standards, and United States 

Standard General Ledger at 

Transaction Level

No lack of Substantial 

Compliance Noted

No lack of Substantial 

Compliance Noted

**For the complete Summary of Financial Statement Audit and Management Assurances, see page 145 of the FY 2014 

PAR. This report can be accessed on the NRC Web site at 

http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1542/.
h t t p : / / www.nrc.gov n Protecting People and the Environment 31

Bibliographic Data Sheet

BIBLIOGRAPHIC DATA SHEET

(See instructions on the reverse)

NRC FORM 335

(12-2010)

NRCMD 3.7

U.S. NUCLEAR REGULATORY COMMISSION 1. REPORT NUMBER

(Assigned by NRC, Add Vol., Supp., Rev.,

 and Addendum Numbers, if any.)

3. DATE REPORT PUBLISHED

MONTH YEAR

4. FIN OR GRANT NUMBER

2. TITLE AND SUBTITLE

5. AUTHOR(S) 6. TYPE OF REPORT

7. PERIOD COVERED (Inclusive Dates)

8. PERFORMING ORGANIZATION - NAME AND ADDRESS (If NRC, provide Division, Office or Region, U. S. Nuclear Regulatory Commission, and mailing address; if 

 contractor, provide name and mailing address.)

9. SPONSORING ORGANIZATION - NAME AND ADDRESS (If NRC, type "Same as above", if contractor, provide NRC Division, Office or Region, U. S. Nuclear Regulatory 

 Commission, and mailing address.)

10. SUPPLEMENTARY NOTES

11. ABSTRACT (200 words or less)

12. KEY WORDS/DESCRIPTORS (List words or phrases that will assist researchers in locating the report.)

14. SECURITY CLASSIFICATION

13. AVAILABILITY STATEMENT

unlimited

(This Page)

unclassified

(This Report)

unclassified

15. NUMBER OF PAGES

16. PRICE

NRC FORM 335 (12-2010)

NUREG-1542, Vol. 20, Supp.1

U.S. Nuclear Regulatory Commission 

Fiscal Year 2014 

Summary of Performance and Financial Information February 2015

N/A

David Holley, James Coyle, et. al Annual

Fiscal Year 2014

Division of Planning and Budget 

Office of the Chief Financial Officer 

U.S. Nuclear Regulatory Commission 

Washington, DC 20555-0001

Same as above

The Fiscal Year 2014 NRC Summary of Performance and Financial Information provides performance and summary audited 

financial statements that enable the U.S. Congress, the President, and the public to assess the performance of the agency in achieving 

its mission and stewardship of its resources. 

Performance and Accountability Report (PAR) 

Fiscal Year (FY) 

2014 
32 Summary of Performance and Financial Information n Fiscal Year 2014

34