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 OMB control number.

NUREG-1542, Vol. 21, has been reproduced from the best available copy.
Table of Contents

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

A Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Chapter 1 • Management’s Discussion and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 

About the NRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 

U.S. Nuclear Regulatory Commission Organization Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The NRC’s Regulatory Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Nuclear Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

FY 2015 Performance Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Future Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Financial Performance Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Management Assurances, Systems, Controls, and Legal Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Chapter 2: Program Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Measuring and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Strategic Goal 1: Ensure the Safe Use of Radioactive Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Nuclear Reactor Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Operating Reactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

New Reactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Nuclear Materials and Waste Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Fuel Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Nuclear Materials Users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Spent Fuel Storage and Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Decommissioning and Low-Level Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Strategic Goal 2: Ensure the Secure Use of Radioactive Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Cross-Cutting Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Management Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

International Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Costing to Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Program Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Data Sources, Data Quality, and Data Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Chapter 3: Financial Statements and Auditors’ Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

A Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Inspector General’s Letter Transmitting Independent Auditors’ Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Management’s Response to the Independent Auditors’ Report on the Financial Statements . . . . . . . . . . . . . . . . . . 115

Chapter 4: Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Inspector General’s Assessment of the Most Serious Management and Performance Challenges

Facing the NRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Summary of Financial Statement Audit and Management Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Required Improper Payments Reporting Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Combined Schedule of Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Freeze the Footprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Civil Monetary Penalty Adjustment for Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Acronyms and Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 

Bibliographic Data Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Availability of Reference Materials in NRC Publications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Left to right: Commissioner Jeff Baran, Commissioner Kristine L. Svinicki, Chairman Stephen G. Burns, and Commissioner 

William C. Ostendorff.

The Fiscal Year 2015 Performance and Accountability Report provides performance results and audited 

financial statements that enable the President, Congress, and the public to assess the performance of the agency 

in achieving its mission and stewardship of its resources. The report contains a concise overview, Management’s 

Discussion and Analysis, as well as performance and financial sections. Details of performance results and 

program evaluations can be found in the Program Performance section. 

ii Performance and Accountability Report n Fiscal Year 2015
I am pleased to present the U.S. Nuclear Regulatory Commission’s (NRC’s) Performance 

and Accountability Report (PAR) for Fiscal Year (FY) 2015. This report 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 report also provides key financial and performance information 

to Congress and the American people of how we used our resources during FY 2015. 

The report is available at http://www.nrc.gov/reading-rm/doc-collections/nuregs/

staffIsr1542/.

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

oversight of the Nation’s 99 operating nuclear reactors, and 31 research and test 

reactors. The agency also maintains oversight of the five reactors that are in the early 

stages of decommissioning. 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 2015. 

The NRC has continued addressing the recommendations developed following the 2011 Fukushima Dai-ichi accident in 

Japan. 

During FY 2015, Fukushima activities continued to be worked under aggressive schedules with focus on the highest 

priority actions. During FY 2015, the agency worked to improve efficiency, effectiveness, and agility in responding to a 

range of possible futures while fulfilling our mission in the present and into the future. The Project Aim 2020 initiative 

provides the agency with an opportunity to improve by examining what we do and how we do it, and allows us to use our 

expertise efficiently in accomplishing our safety and security mission. 

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

people. I am also pleased to report that the NRC effectively managed its internal control environment during FY 2015. 

Based on Federal Manager’s Financial Integrity Act of 1982 (FMFIA) assessments, I have concluded there is reasonable 

assurance that the agency is in substantial compliance with FMFIA, and the financial and performance data published 

in this report 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, I have 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 am very impressed by the performance and dedication of NRC employees in 

achieving the agency’s safety and security goals and look forward to continuing to provide the high-quality service the 

American people have come to expect from us.

Stephen G. Burns

Chairman

November 9, 2015

A Message from the Chairman

h t t p : / / www.nrc.gov n Protecting People and the Environment iii
iv

2015 Awards
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C h a p t e r 1 n Management’s Discussion and Analysis

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Introduction 

The U.S. Nuclear Regulatory Commission (NRC) 

Performance and Accountability Report is an account of 

the agency’s effectiveness in achieving its mission during 

fiscal year (FY) 2015. The report describes the agency’s 

program and financial management performance during 

FY 2015, which covers the period from October 1, 2014 to 

September 30, 2015. 

The agency has two strategic goals: Safety and Security. 

The agency achieved both its Safety and Security goals and 

met all of its performance indicator targets in FY 2015. 

The agency’s nuclear reactor and materials licensees 

maintained their excellent safety record. The agency 

also improved its operational activities by continuing to 

invest in its skilled workforce of engineers and scientists 

through knowledge transfer programs, recruiting a diverse 

workforce, and providing training opportunities. 

The agency is in a sound financial position, having 

sufficient funds to meet programmatic needs and 

adequate control of these funds in place. The agency 

received an unmodified audit opinion on its financial 

statements from its auditors, with no instances of 

noncompliance with laws and regulations. 

This report consists of four chapters. Chapter 1, 

“Management’s Discussion and Analysis,” provides an 

overview of the NRC and describes its programmatic 

and financial accomplishments during FY 2015. 

Chapter 2, “Program Performance,” describes in 

detail the agency’s success in meeting its goals and 

describes the programmatic activities that are the basis 

for accomplishing those goals. Chapter 3, “Financial 

Statements and Auditors’ Report,” describes the agency’s 

financial position. Chapter 4, “Other Information,” 

includes information on management challenges, a 

summary of the financial statement audit, and other 

information. The NRC places a high priority on keeping 

the public informed of its activities. Visit our Web site at 

www.nrc.gov to access this report online (http://www.nrc.

gov/reading-rm/doc-collections/nuregs/staff/sr1542/) and 

learn more about who we are and what we do to serve the 

American public. 

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, 7 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 the agency’s licensees to ensure safety. The NRC 

also employs at least two resident inspectors at each of 

the Nation’s nuclear power reactor, new reactor, and fuel 

fabrication sites. 
C h a p t e r 1 n Management’s Discussion and Analysis

4

U.S. Nucl ear Regulatory Com mission
5

The dotted line signifies 

that the Inspector General 

exercises a much higher degree 

of independence with the 

Chairman in carrying out his 

roles and responsibilities in 

comparison to other executives 

reporting to the Chairman.

United States Nuclear Regulatory Commission

Protecting People and the Environment
C h a p t e r 1 n Management’s Discussion and Analysis

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Figure 1 – How We Regulate

1

Regulations and Guidance

■ Rulemaking

■ Guidance Development ■ Generic Communications ■ Standards Development

5

Support for Decisions

■ Research Activities

■ Risk Assessment

■ Performance Assessment

■ Advisory Committee Activities

■ Adjudication

4 Operational

Experience

■ Events Assessment ■ Generic Issues

3

Oversight

■ Inspection

■ Assessment of Performance

■ Enforcement ■ Allegations

■ Investigations

■ Incident Response

2

Licensing, Decommissioning, and Certification

■ Licensing ■ Decommissioning ■ Certification

1. Developing regulations and guidance for applicants and licensees

2. Licensing or certifying applicants to use nuclear materials, operate nuclear facilities, and decommission facilities

3. Inspecting and assessing licensee operations and facilities to ensure licensees comply with NRC requirements, responding to 

incidents, investigating allegations of wrongdoing and taking appropriate followup or enforcement actions when necessary.

4. Evaluating operational experience of licensed facilities and activities.

5. Conducting research, holding hearings, and obtaining independent reviews to support regulatory decisions.

The NRC’s budget for FY 2015 was $1,015.3 million, 

with a full-time equivalent staff ceiling of 3,778.5. The 

NRC is primarily supported by fees collected from 

its licensees. The agency collected $885.3 million 

(approximately 90 percent) of its budget for FY 2015 

from licensees, with the remaining funds provided by the 

U.S. Treasury (Treasury). 

The NRC’s Regulatory Activities

The NRC performs five principle regulatory functions: 

developing regulations and guidance for applicants and 

licensees; licensing or certifying applicants to use nuclear 

materials, operate nuclear facilities, construct new nuclear 

facilities, and decommissioning facilities; inspecting and 

assessing licensee operations and facilities to ensure that 

licensees comply with NRC requirements and taking 

appropriate follow-up or enforcement actions when 

necessary; evaluating operational experience of license 

facilities and activities; and conducting research, holding 

hearings, and obtaining independent reviews to support 

regulatory decisions (see Figure 1). 

The standards and regulations established by the agency 

set the rules that users of radioactive materials must 

follow. Drawing upon the knowledge and experience 

of the agency’s scientists and engineers, these rules are 

the basis for protecting workers and the general public 

from the potential hazards associated with the use of 

radioactive materials. 

United States Nuclear Regulatory Commission

Protecting People and the Environment
C h a p t e r 1 n Management’s Discussion and Analysis

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Figure 2 – Simplified Fuel Fabrication Process

Fabrication of commercial light-water reactor fuel consists of the following three basic steps:

(1) the chemical conversion of uranium hexauoride (UF6) to uranium dioxide (UO2) powder

(2) a ceramic process that converts UO2 powder to small ceramic pellets

(3) a mechanical process that loads the fuel pellets into rods and constructs nished fuel assemblies

Fuel Rod/

Bundle/Assembly/

Quality Check

Powder

Processing/Pellet

Manufacturing

UO2 Powder

Production

UF6

Vaporization

Incoming

UF6 Cylinders

Transport to

Nuclear Reactors

Small ceramic fuel pellets

With a few exceptions, any organization or individual 

intending to have or use radioactive materials must obtain 

a license. A license identifies the type and amount of 

radioactive material that may be held and used. NRC 

scientists and engineers evaluate the license application to 

ensure that the potential licensee’s use of nuclear materials 

meets the agency’s safety and security requirements. 

The agency inspects all facilities that it licenses on a 

regular basis to ensure that they meet NRC regulations 

and are being operated safely and securely. NRC 

specialists conduct 10 to 25 routine inspections each 

year at each of the 99 operating nuclear power plants. In 

addition, the agency oversees approximately 2,800 licenses 

for medical, academic, industrial, and general uses of 

nuclear materials. The agency conducts approximately 

1,000 health and safety inspections of its nuclear materials 

licensees annually. Under the NRC’s Agreement State 

program, 37 States have assumed primary regulatory 

responsibility over the industrial, medical, and other users 

of nuclear materials within their States, accounting for 

approximately 18,000 licensees. The NRC works closely 

with these States to ensure that they maintain public safety 

through acceptable licensing and inspection procedures. 

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 99 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 
C h a p t e r 1 n Management’s Discussion and Analysis

8

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 2). 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. 

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 heatconversion 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 of 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 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 exposure, radiation can 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. 

Figure 3 – The Boiling-Water Reactor (BWR) Figure 4 – The Pressurized Water Reactor (PWR)
C h a p t e r 1 n Management’s Discussion and Analysis

9

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.

Many of today’s industrial processes also use nuclear 

materials. High-tech methods that ensure the quality of 

manufactured products often rely on radiation generated 

by radioisotopes. To determine whether a well drilled 

deep into the ground has the potential for producing 

oil, geologists use nuclear well-logging, a technique that 

employs radiation from a radioisotope inside the well to 

detect the presence of different materials. Radioisotopes 

are also used to sterilize instruments, find flaws in 

critical steel parts and welds that go into automobiles and 

modern buildings, authenticate valuable works of art, 

and solve crimes by spotting trace elements of poison. 

Radioisotopes can also eliminate dust from film and 

compact discs and reduce static electricity (which may 

create a fire hazard) from can labels. In manufacturing, 

radiation can change the characteristics of materials, 

often giving them features that are highly desirable. 

For example, wood and plastic composites treated 

with gamma radiation resist abrasion and require low 

maintenance. As a result, they are used for some flooring 

in high-traffic areas of department stores, airports, hotels, 

and churches.

Waste Disposal

During normal operations, a nuclear power plant generates 

both high-level radioactive waste, which consists of 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 the 

handling of 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 water-filled 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. 

Figure 5 – The Nuclear Fuel Cycle

Natural

Uranium

Enriched

Uranium

Depleted

Uranium

Deconversion of 

Depleted Uranium

Uranium-Plutonium 

Mixture

Spent

MOX

Fresh

MOX

Spent

UO2

Fresh

UO2

Fuel

Fabrication

MOX

UO2

Reactor

Storage

Pool Dry Cask

Disposal

Reprocessing

Facility

Reprocessed Milling Uranium

Conversion

Enrichment

Uranium Recovery

In Situ Mining Heap

Leach

Currently, most spent fuel in the United States remains 

stored at individual plants. Permanent disposal of spent 

fuel from nuclear power plants (see Figure 6) will require 

a disposal facility that can provide reasonable assurance 

that the waste will remain isolated for thousands of years. Colorado Idaho Oregon Iowa New Hampshire Kansas Maine Vermont Missouri Washington Massachusetts Mississippi Nebraska Ohio Louisiana Minnesota Arkansas Maryland Wisconsin Tennessee Arizona Texas Connecticut New Jersey Virginia Georgia Michigan California Alabama Florida North Carolina New York South Carolina Pennsylvania Illinois

State

Metric Tons of Spent Fuel

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Idaho is holding used fuel from Three Mile Island 2. The used Fuel Data are rounded up to the nearest 

10 for CY 2011.

Source: Gutherman Technical Services and U.S. Department of Energy

Updated: April 2014

Figure 6 – Storage of Commercial Spent Fuel by 

State Through 2014
C h a p t e r 1 n Management’s Discussion and Analysis

10

Licensees often store low-level waste onsite until 

its radioactivity has decayed and the waste can be 

disposed of as ordinary trash, or until amounts are 

large enough for shipment to a low-level waste disposal 

site in containers approved by the U.S. Department of 

Transportation (DOT). The NRC has developed a waste 

classification system for low-level radioactive waste based 

on its potential hazards, and has specified disposal and 

waste form requirements for each of the following general 

classes of waste: Class A, Class B, and Class C waste. 

Generally, Class A waste contains lower concentrations 

of radioactive material than Class B and Class C wastes. 

There are two low-level disposal facilities that accept 

a broad range of low-level wastes. They are located in 

Barnwell, SC, and Richland, WA. 

FY 2015 Performance Results

The NRC’s FY 2014 – 2018 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. 

With the implementation of the Strategic Plan, the agency 

developed new performance indicators that are more in 

line with the Plan. Because the nature of the agency’s 

Safety and Security strategic objectives is to prevent or 

minimize undesirable outcomes, the desired trends for all 

of its performance indicators are to either maintain these 

outcomes at zero or at very low levels.

Ensure the safe use of 1 radioactive materials.

strategic goal

STRATEGIC OBJECTIVE

Strategic objectives express more specifically 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. 

FY 2015 Results

In FY 2015, the NRC achieved its safety goal strategic 

objective. The NRC uses six performance indicators 

to determine whether it has met its Safety goal. The 

agency met all six performance indicator targets in 

FY 2015. Table 1 (see page 12) shows the outcomes from 

FY 2010 – FY 2014.

The cost of achieving the agency’s Safety goal in FY 2015 

was $1,025.5 million.

PERFORMANCE INDICATORS: FY 2015

The purpose behind the NRC’s performance indicators is 

to track the effectiveness, of agency programs to prevent 

or minimize undesirable outcomes. Therefore, the trends 

indicating the agency’s success in accomplishing its 

mission would be at or near zero.

The following performance indicators were developed 

in conjunction with the development of the agency’s 

FY 2014–2018 Strategic Plan. More information on the 

abnormal occurrence (AO) criteria is found in the Data 

Sources, Data Quality, and Data Security section of this 

chapter.

Safety Objective 1: Prevent and mitigate accidents and ensure radiation safety.

Performance Goal 1: Prevent radiation exposures that 

significantly exceed regulatory limits.

Performance Indicator: Number of radiation exposures 

that meet or exceed AO criteria I.A.1 (unintended 

radiation exposure to an adult), I.A.2 (unintended 

radiation exposure to a minor), or I.A.31

 (radiation 

exposure that has resulted in unintended permanent 

functional damage to an organ or physiological system)

1

All references to the AO criteria in this section refer to the definitions in 

Appendix A of the “Report to Congress on Abnormal Occurrences: Fiscal 

Year 2014,” NUREG‐0090, Volume 37, published May 2015.
C h a p t e r 1 n Management’s Discussion and Analysis

11

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

New Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Nuclear Materials Users Target: ≤3 Actual: 2

Discussion: This indicator tracks the effectiveness of 

the NRC’s nuclear safety regulatory programs, in part 

through the number of radiation exposures to the public 

and occupational workers that exceed AO criteria. This 

indicator tracks both nuclear reactors and other nuclear 

material users, such as hospitals and industrial users. Two 

such exposures took place during FY 2015. Incidents 

of this nature would be included in the NRC’s annual 

report to Congress, the latest version of which is available 

online through the NRC’s Agencywide Documents Access 

and Management System (ADAMS) at Accession No.  

ML15140A285. 

Performance Goal 2: Prevent releases of radioactive 

materials that significantly exceed regulatory limits.

Performance Indicator: Number of releases of 

radioactive materials that meet or exceed AO criterion 

I.B (discharge or dispersal of radioactive material from its 

intended place of confinement that results in releases of 

radioactive material)

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

New Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Nuclear Materials Users Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s nuclear material regulatory programs. Exceeding 

the applicable regulatory limits is defined as a release 

of radioactive material that causes a total effective 

radiation dose equivalent to individual members of the 

public greater than 0.1 rem in a year, exclusive of dose 

contributions from background radiation. In FY 2015, 

there were no releases of this nature.

Performance Goal 3: Prevent the occurrence of any 

inadvertent criticality events.

Performance Indicator: Number of instances 

of unintended nuclear chain reactions involving 

NRC‐licensed radioactive materials

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s criticality regulatory programs through the number 

of unintended self‐sustaining nuclear reactions occurring 

within a fiscal year. Intended criticality events include 

the startup of a nuclear power reactor.

Performance Goal 4: Prevent accident precursors and 

reductions of safety margins at commercial nuclear power 

plants (operating or under construction) that are of high 

safety significance.

Performance Indicator: Number of malfunctions, 

deficiencies, events, or conditions at commercial nuclear 

power plants (operating or under construction) that meet 

or exceed AO criteria II.A‐II.D (events at commercial 

nuclear power plant licensees)

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: ≤3 Actual: 0

New Reactors Target: ≤3 Actual: 0

Discussion: The NRC’s Reactor Oversight Process (ROP)

monitors nuclear power plant performance in three areas: 

(1) reactor safety, (2) radiation safety, and (3) security. 

Analysis of individual plant performance is based on both 

licensee‐submitted performance indicators and NRC 

inspection findings, which are independent assessments 
C h a p t e r 1 n Management’s Discussion and Analysis

12

of licensee performance by the NRC as the regulatory 

authority. Each issue is evaluated and assigned one of 

four categories in order of increasing significance: green, 

white, yellow, or red. Greater oversight by the NRC results 

as the severity of the findings increase. A red finding or 

performance indicator signals a significant reduction in 

the safety margin in the measured area. No red findings 

were issued in FY 2015.

Performance Goal 5: Prevent accident precursors and 

reductions of safety margins at nonreactor facilities or 

during transportation of nuclear materials that are of high 

safety significance.

Performance Indicator: Number of malfunctions, 

deficiencies, events, or conditions at nonreactor facilities 

or during transportation of nuclear materials that meet or 

exceed AO criteria III.A or III.B (events at facilities other 

than nuclear power plants and all transportation events)

Timeframe: Annual

Business Line FY 2015

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s safety programs for nonreactor facilities or during 

transportation of nuclear materials through the number of 

instances in which safety margins at nonreactor facilities 

are at unacceptable levels.

Performance Goal 6: Prevent medical events involving 

radioactive materials that result in death or have a 

significant unintended impact on patient health.

Performance Indicator: Number of medical events that 

meet or exceed a revised version of AO criterion III.C.3 

(events involving the medical use of radioactive materials 

in patients or human research subjects) to be developed 

in 2016

Timeframe: Annual

Business Line FY 2015

Nuclear Materials Users Target: N/A* Actual: 

* This indicator has been discontinued because the Commission approved 

alternate metrics in FY 2015 and did not approve the addition of Criterion 

III.C.3.

Discussion: This indicator tracks the effectiveness of the 

NRC’s regulatory safety program for the medical use of 

nuclear material through the number of medical events 

meeting or exceeding criterion III.C.3.

Table 1 – FY 2010-2014 Safety Performance Indicators

1. Number of New Conditions Evaluated as Red by the NRC’s Reactor Oversight Process*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3 Replaced by Safety 

Performance Goal 4

Actual 0 1 1 0 0

* This measure is the number of new red inspection findings and the number of new red performance indicators during the fiscal year. Programmatic issues at 

multiunit sites that result in red findings for each individual unit are considered separate conditions for purposes of reporting for this measure. A red performance 

indicator and a red inspection finding that are caused by an issue with the same underlying causes also are considered separate conditions for purposes of reporting 

for this measure. 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 ROP external Web page was updated to show the red indicator. 

2. Number of Significant Accident Sequence Precursors (ASPs) * of a Nuclear Reactor Accident

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 0 ≤ 0 ≤ 0 ≤ 0 ≤ 0 Replaced by Safety 

Performance Goal 4

Actual 0 0 0 0 0

*Significant ASP events have a conditional core damage probability (CCDP) or ΔCDP of greater than 1×10−3. Such events have a 1/1000 (1×10−3) 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.
C h a p t e r 1 n Management’s Discussion and Analysis

13

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 is ≤ 3 with No Performance Leading to the Initiation of an Accident Review 

Group*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3 Replaced by Safety 

Performance Goal 4

Actual 0 2 1 0 0

*This measure is the number of plants that have entered the process in Inspection Manual Chapter (IMC) 0350, “Oversight of Reactor Facilities in a Shutdown 

Condition due to Significant Performance and/or Operational Concerns,” dated December 15, 2006; the multiple/repetitive degraded cornerstone column; or the 

unacceptable performance column during the fiscal year (but, were not in these columns or process the previous fiscal year). Data for this measure are obtained 

from the NRC’s external Web 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 IMC 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 Performance is ≤ 1*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015**

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1**

Actual 0 0 0 0 0 0**

*Considering all indicators qualified for use in reporting 

**Indicator discontinued with the adoption of the indicators for the FY2014-2018 Strategic Plan

5. Number of Events with Radiation Exposures to the Public or Occupational Workers That Exceed Abnormal Occurrence 

(AO) Criterion I.A.3*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Reactors Target 0 0 0 0 0

Replaced by Safety 

Performance Goal 1

Reactors Actual 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2

Materials Actual 0 0 0 0 0

Waste Target 0 0 0 0 0

Waste Actual 0 0 0 0 0

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

6. Number of Radiological Releases to the Environment That Exceed Applicable Regulatory Limits*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Reactors Target 0 0 0 0 0

Replaced by Safety 

Performance Goal 2

Reactors Actual 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2

Materials Actual 0 0 0 0 0

Waste Target 0 0 0 0 0

Waste Actual 0 0 0 0 0

*With no event exceeding AO criterion I.B

Table 1 – FY 2010-2014 Safety Performance Indicators (continued)

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 2015: 

Safety Strategy 1: Enhance the NRC’s regulatory 

programs as appropriate using lessons learned from 

domestic and international operating experience and 

other sources. 
C h a p t e r 1 n Management’s Discussion and Analysis

14

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.

Fukushima Regulatory Review

The NRC’s efforts to implement the lessons learned 

from the Fukushima Dai-ichi accident in March 2011 

continued during FY 2015. 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 for 

ensuring 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 under “Operating Reactors.” 

Additional information can be found on the agency 

Web site http://www.nrc.gov/reactors/operating/opsexperience/japan-info.html

Ensure the secure use of 2 radioactive materials.

strategic goal

STRATEGIC OBJECTIVES

Strategic objectives more specifically express the results 

that are needed to achieve a strategic goal. The strategic 

objectives for Goal 2 are: 

Ensure protection of nuclear facilities and 

radioactive materials.

Protecting nuclear facilities and radioactive materials 

are key factors 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 classified 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. 

FY 2015 Results

In FY 2015, the NRC achieved its Security goal strategic 

objectives. The NRC also uses three Security goal 

performance indicators to determine whether the agency 

has met its security goal. The agency met all three 

performance indicator targets in FY 2015. Outcomes 

from FY 2010 – FY 2014 are in Table 2 (see page 15). 

The cost of achieving the agency’s Security goal was 

$58.0 million in FY 2015.
C h a p t e r 1 n Management’s Discussion and Analysis

15

SECURITY PERFORMANCE INDICATORS: FY 2015

Security Objective 1: Ensure protection of nuclear facilities and radioactive materials.

Performance Goal 1: Prevent sabotage, theft, diversion, or 

loss of risk‐significant quantities of radioactive material.

Performance Indicator: Number of instances of sabotage, 

theft, diversion, or loss of risk‐significant quantities of 

radioactive material that meet or exceed AO criteria I.C.1 

(unrecovered lost, stolen, or abandoned sources), I.C.2 

(substantiated case of actual theft or diversion), and the 

portion of criterion I.C.3 (substantiated loss of a formula 

quantity) concerning theft or diversion of special nuclear 

material.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: 0 Actual: 0 

Discussion: This indicator tracks the agency’s 

effectiveness at preventing sabotage, theft, diversion, or 

loss of risk-significant quantities of radioative material 

through tracking any loss or theft of radioactive nuclear 

sources that the NRC has determined to be of significant 

risk. The indicator tracks the agency’s performance in 

ensuring the proper accounting for radioactive sources of 

significant risk that could be used for malicious purposes. 

It also tracks whether NRC-licensed facilities maintain 

adequate protective capabilities to prevent theft or 

diversion of nuclear material or sabotage that could result 

in substantial harm to the public health and safety, tracks 

whether special nuclear material is accounted for, and 

verifies that formula-quantity losses of this material do 

not occur. The indicator also tracks whether the systems 

in place at NRC-licensed facilities maintain accurate 

inventories of the special nuclear material (SNM) that the 

facilities process, use, or store. No such incidents took 

place during FY 2015.

Performance Goal 2: Prevent substantial breakdowns of 

physical security, cyber security, or material control and 

accountability.

Performance Indicator: Number of substantial 

breakdowns of physical security, cyber security, or 

material control and accountability that meet or exceed 

a revised version of AO criterion I.C.4 (substantial 

breakdown in physical security or materials control) that 

will include breakdowns of cyber security and the portion 

of AO criterion I.C.3 concerning breakdowns of the 

accountability system for special nuclear material.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: ≤ 1 Actual: 0 

Discussion: This indicator tracks the agency’s effectiveness 

in maintaining security by tracking any breakdowns in 

access control, containment, or accountability systems 

that significantly weakened the protection against 

theft, diversion, or sabotage for nuclear materials that 

the agency has determined to be of significant risk. In 

FY 2015, there were no incidents of this nature.

Security Objective 2: Ensure protection of classified and Safeguards information.

Performance Goal 3: Prevent significant unauthorized 

disclosures of classified or SGI.

Performance Indicator: Number of significant 

unauthorized disclosures of classified or Safeguards 

Information by licensees as defined by AO criterion I.C.5 

and by NRC employees or contractors as defined by 

analogous NRC internal criteria.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: 0 Actual: 0 

Discussion: This indicator includes significant 

unauthorized disclosures of classified or Safeguards 

information (SGI) that cause damage to national security 

or public safety. SGI is a special category of sensitive 

unclassified information concerning the physical 

protection of operating power reactors, spent fuel 

shipments, strategic special nuclear material, or other 

radioactive material. This indicator tracks whether 

information that can harm national security (classified 

information) or cause damage to the public health and 

safety (SGI) has been stored and used in ways as to 

prevent its disclosure to the public, terrorist organizations, 

other nations, or personnel without a need to know. No 

significant unauthorized disclosures occurred in FY 2015.
C h a p t e r 1 n Management’s Discussion and Analysis

16

Table 2 – FY 2010-2014 Security Performance Indicators

1.Unrecovered Losses of Risk‐Significant* Radioactive Sources

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 1** 0 0 0

*“Risk-significant” is defined as any unrecovered, lost, or abandoned sources that exceed the values listed in Appendix P, “Category 1 and 2 Radioactive Material,” 

to 10 CFR Part 110, “Export and Import of Nuclear Equipment and 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 in 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 that 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) a source for which the agency has made a determination 

that its risk significance is low based on its location (e.g., water depth) or its physical characteristics (e.g., half‐life and housing) and its surroundings, (6) cases 

in which all reasonable efforts have been made to recover the source, and (7) the determination was made that the source is not recoverable and will not be 

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

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

2.Number of Substantiated* Cases of Actual Theft or Diversion of Licensed, Risk‐Significant Radioactive Sources, or 

Formula Quantities** of Special Nuclear Material or Attacks That Result in Radiological Sabotage***

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 0 0 0 0

*“Substantiated” means a situation in which an indication of loss, theft, or unlawful diversion, such as an allegation of diversion, report of lost or stolen material, 

statistical processing difference, or other indication of loss of material control or accountability cannot be refuted following an investigation and requires further 

action on the part of the agency or other proper authorities. 

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

***“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 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 0 0 0 0

4.Number of Substantial Breakdowns* 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 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 Replaced by Security 

Performance Goal 2

Actual 0 0 0 0 0

*A “substantial breakdown” is defined as a red finding in the security cornerstone of the ROP or any plant or facility that is determined either to 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 or operational events.

5.Number of Significant Unauthorized Disclosures* of Classified and/or Safeguards Information

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 3

Actual 0 0 0 0 0

*“Significant unauthorized disclosure” is defined as a disclosure that harms national security or public health or safety.
C h a p t e r 1 n Management’s Discussion and Analysis

17

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 2015:

Security Strategy 1: Ensure the effectiveness and 

efficiency of the regulatory framework using information 

gained from operating experience 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.

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. 

Figure 7 – U.S. Commercial Nuclear Power 

Reactors – Years of Operation by the End of 2015

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. 

Several entities are seeking to submit license applications 

for small modular reactors in the next several years. The 

Department of Energy (DOE) 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. 
C h a p t e r 1 n Management’s Discussion and Analysis

18

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. 

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 DOE. 

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 and secure 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.

Figure 8 – Security Components

Legislative and Executive Branch 

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. 
C h a p t e r 1 n Management’s Discussion and Analysis

19

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.

Data Completeness and Reliability

The NRC considers the data contained in this report to 

be complete, reliable, and relevant. The data are complete 

because the agency reports actual performance data for 

every performance goal and indicator in the report. In 

addition, all of the data are reported for each measure. 

The agency also considers the data in this report reliable 

and relevant, because they have been validated and 

verified. More information on the abnormal occurrence 

criteria may be found at http://www.nrc.gov/reading-rm/

doc-collections/nuregs/staff/sr0090/. “Data Collection 

Procedures for Verification and Validation of Performance 

Measures,” contains the processes the agency uses to 

collect, validate, and verify performance data in this 

report. This report can be found on page 107 of the 

NRC‘s FY 2015 Congressional Budget Justification 

located on the NRC Web site NRC: Congressional Budget 

Justification: Fiscal Year 2015 (NUREG-1100, Volume 30).

FINANCIAL PERFORMANCE

OVERVIEW

The NRC prepared its principal financial statements 

in accordance with the accounting standards codified 

in the Statements of Federal Financial Accounting 

Standards (SFFAS) and the Office of Management and 

Budget (OMB) Circular A-136, “Financial Reporting 

Requirements.”

As of September 30, 2015, 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 obligations did not exceed budget 

authority.

Sources of Funds 

Total Budget Authority (In Millions)

For the fiscal years ended 

September 30, 2015 2014

Appropriations

Salaries and Benefits $ 1,003.2 $ 1,043.9

Office of the Inspector General 12.1 12.0

Total Appropriations 1,015.3 1,055.9

Other Budget Authority

Prior-years Appropriations 40.4 22.8

Prior-years Funding for 

Reimbursable Work 8.3 9.0

Prior-years Funding from DOE* 4.8 11.0

Spending Authority from 

Offsetting Collections 8.0 9.8

Recoveries of Prior-year Unpaid 

Obligations 5.0 10.6

Total Other Budget Authority 66.5 63.2

Total NRC Budget Authority $ 1,081.8 $ 1,119.1

*DOE funding for the NRC activities associated with the Nuclear Waste Policy 

Act of 1982, as amended.

Appropriations. The NRC received two appropriations: 

(1) for Salaries and Expenses and (2) for the Office of the 

Inspector General (OIG). The FY 2015 appropriations 

were $1,015.3 million, which included $1,003.2 million for 

the Salaries and Expenses appropriation and $12.1 million 

for the OIG. 

The NRC’s appropriation decreased $40.6 million 

compared to the prior year, primarily due to a decrease of 

$40.7 million for the Salaries and Expenses appropriation. 

The appropriation for the OIG stayed basically at the same 

level with a $0.1 million increase. 

The Salaries and Expenses appropriation is available 

until expended. This includes a provision that not more 

than $7.5 million be made available for the Office of the 

Commission as a 2-year (FY 2015/2016) appropriation 

that is available for obligation by the NRC (including OIG) 

through September 30, 2016. After September 30, 2016, 

the remaining funds which have not been obligated for the 

Office of the Commission will be available until expended 
C h a p t e r 1 n Management’s Discussion and Analysis

20

as part of the Salaries and Expenses appropriation. The 

OIG appropriation is available to obligate for 2 years 

(FY 2015/2016) by the OIG through September 30, 2016. 

This 2-year funding includes $0.85 million for Inspector 

General (IG) services to be provided to 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 (WIR) 

and generic homeland security. The NRC returns the fees 

it collects to the Treasury during the FY which offset the 

NRC’s two appropriations.

Figure 9 – Sources of Funds for 

Appropriations

In Millions

900

800

700

600

500

400

300

200

100

0

Reactor

Fees

Materials

Fees

Nuclear

Waste

Fund

Treasury

General

Fund

$158.5

$81.4

$816.0

$0.0

$130.0 $87.5

$797.8

$0.0

The projected amount to be recovered from fees in 

FY 2015 was $895.5 million, which included $888.7 million 

from FY 2015 reactor and materials fees and $6.8 

million from other fees (unpaid current-year invoices 

and terminated reactors’ FY 2015 annual fee collections, 

offset by payments of prior-year invoices in FY 2015.) 

The NRC collected and transferred $885.3 million to the 

Treasury (see Figure 9), which represents 98.9 percent 

of the approximately $895.5 million projected to be 

recovered in FY 2015. The fees collected for FY 2014 and 

transferred to the Treasury totaled $897.4 million and 

included $871.2 million transferred during FY 2014 and 

$26.2 million transferred in early FY 2015. The decrease 

of $12.1 million in fees collected and transferred to the 

Treasury was mainly due to the decrease in appropriations 

in FY 2015.

Total Budget Authority. The total budget authority 

available for the NRC to obligate in FY 2015 was 

$1,081.8 million, which includes $1,015.3 million for 

appropriations, $40.4 million of prior-year appropriations, 

$8.3 million from prior-year funding for reimbursable 

work, $5.0 million of recoveries of prior-year unpaid 

obligations, $8.0 million from FY 2015 spending 

authority from offsetting collections (reimbursable work 

performed for other Federal agencies and commercial 

customers, and prior-year refunds), and $4.8 million 

of prior-year funding for resources received from the 

DOE to fund the NRC activities associated with the 

Nuclear Waste Policy Act of 1982. Funds available 

to obligate in FY 2015 decreased from the FY 2014 

amount of $1,119.1 million primarily due to decreases 

of $40.6 million in appropriations, $5.6 million in 

actual recoveries of prior-year unpaid obligations 

and $1.8 million spending authority from offsetting 

collections; offset by an increase in the beginning 

unobligated balances brought forward of $10.7 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 $1,053.8 million in 

FY 2015, which represented a decrease of $11.8 million 

from FY 2014 (see Figure 10). Approximately 58 percent 

of obligations in FY 2015 were for salaries and benefits. 

The remaining 42 percent were used 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. 

FY 2015 FY 2014
C h a p t e r 1 n Management’s Discussion and Analysis

21

Figure 10 – Uses of Funds (Obligations)

In Millions

700

600

500

400

300

200

100

0

Salaries 

and 

Benefits

Travel Grants Reimbursable 

Work

Contract 

Support

$5.1 $24.6

$596.5

$28.9

$410.4

$5.2 $27.7

$608.2

$19.8

$393.0

The unobligated budget authority available at the end 

of FY 2015 was $28.0 million which was a $25.5 million 

decrease from the FY 2014 amount of $53.5 million. Of the 

$28.0 million unobligated balance at the end of FY 2015, 

$7.9 million was for reimbursable work, $2.8 million was 

for the NWF, $4.2 million was for special purpose funds, 

and $13.1 million was available to fund critical needs of the 

NRC in FY 2016. The $53.5 million unobligated balance at 

the end of FY 2014 included $8.3 million for reimbursable 

work, $4.8 million for the NWF, $6.2 million for special 

purpose funds, and $34.2 million to fund critical needs of 

the NRC in FY 2015.

Audit Results 

The NRC received an unmodified audit opinion on its 

FY 2015 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 2015 audit.

A summary of the financial statement audit results is 

included in the “Other Information” section 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 the statements have been 

prepared from the books and records of the NRC in 

accordance with generally accepted accounting principles 

(GAAP) for Federal entities and the formats prescribed by 

the 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. 

Financial Statement Highlights 

The NRC’s financial statements summarize the agency’s 

financial activity position. The financial statements, 

footnotes, and required supplementary information 

are included in Chapter 3, “Financial Statements and 

Auditors’ Report.” The following is an analysis of the 

financial statements.

Analysis of the Balance Sheet 

Asset Summary (In Millions)

As of September 30, 2015 2014

Fund Balance with Treasury $ 353.8 $ 377.4

Accounts Receivable, Net 96.0 111.6

Property and Equipment, Net 79.1 90.3

Other Assets 11.3 8.0

Total Assets $ 540.2 $ 587.3

Assets. The NRC’s total assets were $540.2 million 

as of September 30, 2015, representing a decrease of 

$47.1 million from the same period of FY 2014. Changes 

in major categories include decreases of $23.6 million 

in the Fund Balance with Treasury, $15.6 million in 

Accounts Receivable, Net; and $11.2 million in Property 

and Equipment, Net; offset by an increase of $3.3 million 

in Other Assets.

The Fund Balance with Treasury was $353.8 million as 

of September 30, 2015, which accounts for 65 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 $23.6 million 

decrease in the fund balance is primarily the result of 

an increase in the beginning balance of $59.1 million, 

offset by a decrease in appropriations of $40.6 million 

and an increase in net disbursements (cash outlays) of 

$41.4 million, which primarily consists of increases in 

FY 2015 FY 2014
C h a p t e r 1 n Management’s Discussion and Analysis

22

salaries and benefits of $11.2 million, contract services 

of $20.0 million, equipment and software of $6.9 million, 

and travel of $3.3 million.

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, 2015, was $96.0 million, which included an offsetting 

allowance for doubtful accounts of $2.2 million. For 

FY 2014, the year-end Accounts Receivable, Net, balance 

was $111.6 million, including an offsetting allowance for 

doubtful accounts of $4.4 million. The net decrease in 

accounts receivable from the prior year of $15.6 million 

is primarily due to outstanding receivables at the end of 

FY 2014 whereby collections were received during the 

first week of FY 2015.

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 in which the NRC operates are leased 

from the U.S. General Services Administration (GSA).) 

At the end of FY 2015, net property and equipment 

was $79.1 million, a decrease of $11.2 million from 

the FY 2014 amount of $90.3 million. The decrease is 

primarily due to a decrease of $13.9 million in leasehold 

improvements (mainly for the writeoff for the initial 

buildout of the Three White Flint North office building 

resulting from a change in the lease agreement associated 

with the NRC vacating the space) and a decrease of 

$6.9 million in the book value of completed capitalized 

software and leasehold improvement projects, net of 

amortization expense; offset by increases of $4.2 million 

for capitalized software development-in-progress and 

$3.0 million for leasehold improvements-in-progress on 

the Headquarters office buildings in Rockville, MD.

Liabilities Summary (In Millions)

As of September 30, 2015 2014

Accounts Payable $ 37.0 $ 38.2

Federal Employee Benefits 6.0 6.7

Other Liabilities 84.9 79.4

Total Liabilities $ 127.9 $ 124.3

Liabilities. Total liabilities were $127.9 million as 

of September 30, 2015, representing an increase of 

$3.6 million from the FY 2014 year-end balance of 

$124.3 million. Accounts Payable, Federal Employee 

Benefits, and Other Liabilities remained approximately 

the same as the prior year. For FY 2015, Other Liabilities 

represents 66 percent of the Total Liabilities and includes 

$46.5 million in accrued annual leave, $18.3 million 

in accrued funded salaries and benefits, $12.1 million 

in grants payable, $5.5 million in advances received by 

the NRC for services that will be provided, $1.6 million 

in accrued workers’ compensation, and $0.9 million 

in contract holdbacks, capital lease liability, and 

miscellaneous liabilities. 

Total Liabilities include liabilities not covered by 

budgetary resources, which represent expenses recognized 

in the financial statements that will be paid from future 

appropriations. The liabilities not covered by budgetary 

resources were $54.1 million for FY 2015 compared to 

$55.2 million for FY 2014, a $1.1 million decrease. For 

FY 2015, the liabilities not covered by budgetary resources 

represent 42 percent of Total Liabilities and include 

$46.5 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 

$6.0 million as an actuarial estimate of accrued future 

workers’ compensation expenses included in Federal 

Employee Benefits.

Net Position Summary (In Millions)

As of September 30, 2015 2014

Unexpended Appropriations $ 283.2 $ 306.2

Cumulative Results of Operations 129.1 156.8

Total Net Position $ 412.3 $ 463.0

Net Position. The difference between Total Assets and 

Total Liabilities, Net Position, was $412.3 million as of 

September 30, 2015, a decrease of $50.7 million from 

the FY 2014 year-end balance. Net Position is comprised 

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. 
C h a p t e r 1 n Management’s Discussion and Analysis

23

Unexpended Appropriations were $283.2 million at the 

end of FY 2015, a decrease of $23.0 million from the 

prior fiscal year-end. Cumulative Results of Operations 

decreased by $27.7 million from $156.8 million in 

FY 2014 to $129.1 million in FY 2015. 

Analysis of the Statement of

Net Cost 

The Statement of Net Cost presents the gross cost 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, 2015, was 

$182.6 million, representing an increase of $22.6 million 

compared to the FY 2014 net cost of $160.0 million. This 

includes an increase of $26.9 million in gross costs and an 

increase in earned revenues of $4.3 million, which offset 

gross costs. 

Net Cost of Operations (In Millions)

For the fiscal years ended 

September 30, 2015 2014

Nuclear Reactor Safety $ 24.4 $ 2.2

Nuclear Materials and Waste Safety 158.2 157.8

Net Cost of Operations $ 182.6 $ 160.0

Gross Costs. The NRC’s total gross costs were 

$1,083.5 million for FY 2015, an increase of $26.9 million 

from the prior-year amount of $1,056.6 million. The 

Nuclear Reactor Safety program gross costs for FY 2015 

were $838.7 million compared to FY 2014 gross costs of 

$817.3 million, an increase of $21.4 million, primarily 

due to increases of $12.0 million in contract services 

and $9.4 million in salaries and benefits. The Nuclear 

Materials and Waste Safety program gross costs for 

FY 2015 were $244.8 million compared to FY 2014 gross 

costs of $239.3 million, an increase of $5.5 million. 

The cost of achieving the agency’s Safety and Security 

goals for the agency’s programs for FY 2015 is the gross 

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

for achieving the agency’s Safety goal was $1,025.5 million 

and the cost of achieving the agency’s Security goal was 

$58.0 million (see Figure 11).

Figure 11 – Gross Costs by Strategic goals 

for the fiscal year ended September 30, 2015

In Millions

900

800

700

600

500

400

300

200

100

0

Safety Security

$230.0

$14.8

Nuclear Reactor Safety

Nuclear Materials and Waste Safety

$43.2

$795.5

Earned Revenue. Total earned revenue for FY 2015 

was $900.8 million, an increase of $4.3 million from 

the FY 2014 earned revenue of $896.5 million. Revenue 

from the Nuclear Reactor Safety program in FY 2015 was 

$814.3 million compared to $815.1 million in FY 2014, 

a decrease of $0.8 million. Revenue from the Nuclear 

Materials and Waste Safety program in FY 2015 was 

$86.6 million compared to $81.5 million in FY 2014, an 

increase of $5.1 million. 

Fees collected (earned primarily in FY 2015) and offset 

against the NRC appropriations were $911.5 million 

compared to $871.2 million in FY 2014. The increase of 

$40.3 million in license fee collections was the result of 

an increase of $14.1 million in current-year license fee 

collections, and $26.2 million for prior-year license fee 

collections. The NRC is required to collect approximately 

90 percent of its appropriation 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.” 
C h a p t e r 1 n Management’s Discussion and Analysis

24

Analysis of the Statement of

Changes in Net Position

The Statement of Changes in Net Position reports the 

change in net position for the reporting period. Net 

position is affected by changes in its two components: 

Cumulative Results of Operations and Unexpended 

Appropriations. In FY 2015, the NRC had a decrease in 

Net Position of $50.8 million resulting from a decrease of 

$27.7 million in Cumulative Results of Operations and a 

decrease of $23.1 million in Unexpended Appropriations.

The decrease in Cumulative Results of Operations of 

$27.7 million was primarily comprised of a decrease in 

the beginning balance, brought forward October 1, of 

$3.8 million, an increase in the net cost of operations 

of $22.6 million, and a decrease in financing sources 

other than the NRC licensing fees of $1.3 million. The 

increase in net cost of operations was due to an increase 

of $26.9 million in gross costs, offset by an increase of 

$4.3 million in earned revenue. The decrease in financing 

sources was due to $7.1 million of imputed financing 

from costs absorbed by others; offset by an increase of 

$5.8 million in appropriations used to finance operations.

The change in unexpended appropriations results from 

appropriations received, net of license fee collections, 

being more or less than appropriations used to fund the 

NRC operations. The decrease in FY 2015 unexpended 

appropriations of $23.1 million is due to an increase in 

the beginning balance, brought forward October 1, of 

$63.6 million; offset by an $80.9 million decrease in 

appropriations received, net of licensee fees collected, and 

an increase of $5.8 million in appropriations used to fund 

the NRC operations. The decrease of $80.9 million in 

appropriations received, net of license fees collected, is due 

to appropriations received for FY 2015 of $1,015.3 million, 

reduced by current year license fee collections of 

$885.3 million and prior year license fee collections of 

$26.2 million; compared to appropriations received in 

FY 2014 of $1,055.9 million, reduced by FY 2014 license 

fee collections of $871.2 million.

Analysis of the Statement of

Budgetary Resources 

The Statement of Budgetary Resources (SBR) provides 

information on budgetary resources available to the NRC 

and their status at the end of the period.

The Total Budgetary Resources available in FY 2015 

were $1,081.8 million, which was $37.3 million less than 

the $1,119.1 million available for FY 2014. The major 

component of Total Budgetary Resources is the NRC’s 

appropriation, which was $1,015.3 million in FY 2015 

compared to $1,055.9 million in FY 2014, accounting 

for a $40.6 million decrease in total funding. Other 

decreases in funding included $5.6 million in recoveries 

of prior-year unpaid obligations and $1.8 million 

in spending authority from offsetting collections 

(reimbursable work and prior-year refunds); offset by an 

increase in the beginning unobligated balance brought 

forward of $10.7 million. 

The Status of Budgetary Resources accounts for 

operational activities funded with the NRC’s 

budgetary resources during the fiscal year. The NRC’s 

obligations for FY 2015 totaled $1,053.8 million, a 

decrease of $11.8 million from the prior-year amount 

of $1,065.6 million. The decrease is primarily due to 

decreases of $14.5 million in management and support 

obligations consisting of the acquisition of equipment 

and software, leasehold improvements to the NRC 

Headquarters office buildings, miscellaneous office 

supplies, and other administrative contract services, 

and $9.1 million for grants; offset by an increase of 

$11.8 million for employee salaries and benefits. 

The Status of Budgetary Resources also accounts for 

the funds that were not used in operations during the 

fiscal year. Total budgetary resources not obligated 

at the end of the fiscal year were $28.0 million, a 

decrease of $25.5 million from the prior-year balance of 

$53.5 million. The unobligated budgetary resources at 

the end of FY 2015 that were apportioned by the OMB 

were $23.3 million compared to $48.5 million in FY 

2014. The $25.2 million decrease is primarily due to 

decreases of $40.6 million in appropriations in FY 2015 

and $5.6 million in prior-year recoveries; offset by an 
C h a p t e r 1 n Management’s Discussion and Analysis

25

increase of $13.7 million in the beginning appropriated 

unobligated balance and by a reduction of $5.6 million in 

apportioned Category A obligations incurred in FY 2015. 

Other unobligated resources at the end of FY 2015 

included $2.8 million for the NWF, which is exempt from 

the OMB apportionment, and $1.9 million in funding not 

apportioned by the OMB due to a transfer from another 

account that occurred at the end of the FY. The timing of 

the transfer did not allow for a reapportionment of funds 

in FY 2015.

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

(FMFIA) 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.

Programmatic Internal Control

Programmatic internal control consists of the 

organization, planning, 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 in 

accordance with the NRC’s FMFIA Governance 

Framework (Figure 12). Under this governance 

framework, each NRC business line lead 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, Management 

Control Reviews, Construction and Reactor Oversight, 

Force-on-Force Inspections, Security Core Inspections, 

Integrated Materials Performance Evaluation Program, 

Lessons Learned Oversight Board recommendations, 

financial statement audit, Inspector General and U.S. 

Government Accountability Office (GAO) audits and 

reports, and other information supplied by the agency’s 

Senior Assessment Team (SAT). The SAT provides 

detailed, centralized oversight and monitoring of 

financial systems and reporting. The business line leads 

provided substantial reasonable assurance justification 

documentation to support their respective certifications, 

as well as documented areas where internal controls 

can be strengthened. The ECIC assessed the agency’s 

programmatic operations, financial systems, and internal 

control over financial reporting and voted to recommend 

that the Chairman sign the agency’s Integrity Act 

Statement and reported to the Chairman that there were 

no internal control deficiencies serious enough to require 

reporting as a weakness or noncompliance.

Figure 12 – NRC’s FMFIA Governance Framework 

The ECIC is comprised of senior executives from the 

Office of the Chief Financial Officer and the Office of the 
C h a p t e r 1 n Management’s Discussion and Analysis

2626 Performance and Accountability Report n Fiscal Year 2014

Executive Director for Operations. The agency’s General 

Counsel and Inspector General participate as advisors. 

The SAT is comprised of senior executives from the 

agency’s corporate support business lines, (i.e., the Office 

of the Chief Human Capital Officer, Office of Information 

Services, et al).

The Internal Control and Planning Branch (ICPB) 

is comprised of agency personnel responsible for the 

implementation of the programmatic internal control 

program. 

In FY 2013, the agency updated its programmatic internal 

control framework (Figure 13). This effort required a 

paradigm shift in how the agency examines, documents, 

communicates, monitors, and reports on programmatic 

internal control. The agency’s programmatic internal 

control program now aligns with its lines of business, 

budget structure, strategic plan, and performance 

reporting. The updated framework addresses the five 

GAO Standards for Internal Control in the Federal 

Government, as well as GAO’s Risk Assessment 

Monitoring Tool, and the Committee of Sponsoring 

Organizations of the Treadway Commission, Internal 

Control – Integrated Framework. The updated framework 

streamlined the agency’s programmatic internal 

control and reasonable assurance processes, reduced 

administrative requirements on program and technical 

staff, better leveraged existing programmatic internal 

control activities across the agency’s lines of business, and 

eliminated silos and duplications of effort. The updated 

framework focused on shifting from an individual, officebased approach to assessing, documenting, monitoring, 

and reporting on programmatic internal control, to 

a business line-based approach, as supported by the 

Government Performance Results Act and Modernization 

Act of 2010. As a result, the NRC programmatic internal 

control program has become proactive in establishing 

the control environment that substantially complies 

with FMFIA.

 Programmatic Internal Control Program

NRC Business 

Line Leads OCFO ECIC Chairman

Federal Managers’ 

Financial Integrity 

Act of 1982

OMB Circular 

A-123

Internal 

Control Plans 

{Updated 

Quarterly and 

as needed}

Reasonable 

Assurance 

Certifications

Recommendation 

to the Chairman 

on NRC 

Reasonable 

Assurance

Agencywide 

Reasonable 

Assurance 

Certification 

MD 4.4

Internal 

Control

Fiscal Year 

Reasonable 

Assurance 

Guidance

Figure 13 – NRC Programmatic Internal Control 

Program 

As part of the updated framework, the agency’s 

ICPB developed memoranda of understanding 

(MOUs) between the agency’s lines of business and 

business partners that clearly identifies, clarifies, and 

communicates mutual mission expectations as they 

relate to programmatic internal control and reasonable 

assurance. The MOUs increased transparency, 

clarified roles and responsibilities, eliminated silos, and 

significantly improved communication channels across 

the agency. Additionally, the agency’s senior management 

has become more invested in the overall programmatic 

internal control and reasonable assurance processes. 

The senior management investment in the processes has 

significantly improved management’s responsibility for 

internal control and risk management. 
C h a p t e r 1 n Management’s Discussion and Analysis

27

FY 2015 FMFIA Results 

In accordance with FMFIA, Section 2, and under the 

guidance established in OMB Circular A-123, NRC 

business line leads certified that, as of September 30, 2015, 

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. 

• Reliable and timely information was 

obtained, maintained, reported, and used for 

sound decisionmaking. 

• Based on management’s certification of 

reasonable assurance, the NRC is able to 

provide a statement of assurance that its 

programmatic internal control met the 

objectives of the FMFIA. The NRC has 

reasonable assurance that its internal control 

is effective and conforms to Governmentwide standards. 

Office of Management 

and Budget 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, 2015.

The NRC adopted a rotational testing plan to assess 

the effectiveness of its internal controls over financial 

reporting. In FY 2015, the NRC continued its assessment 

of internal controls over financial reporting and 

reevaluated the scope of its financial reports, materiality 

values, risk assessments, key processes, and key controls 

to update the test plan. It was determined that two of the 

eight key processes (financial reporting and information 

technology) were significant enough to include in the 

testing each year of the test plan cycle. The remaining 

six key processes (budget execution, disbursements, 

payroll, procurement, property, and revenue) were to 

be tested once in a 2-year cycle, three each year. Based 

on the results of the FY 2015 evaluation, the NRC can 

U.S. NUCLEAR REGULATORY COMMISSION

FISCAL YEAR 2015

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 is

able to provide an unqualified statement of assurance that the internal controls and financial

management systems meet the objectives of the Integrity Act with no material weaknesses.

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

accordance with Office of Management and Budget 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, 2015.

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, 2015, 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.

Stephen G. Burns

Chairman

U.S. Nuclear Regulatory Commission

November 9, 2015
C h a p t e r 1 n Management’s Discussion and Analysis

28

provide reasonable assurance that its internal controls 

over financial reporting were operating effectively as of 

June 30, 2015, and that the evaluation found no material 

weaknesses in the design or operation of the internal 

controls over financial reporting. 

Requirements for Effective Measurement and 

Remediation of Improper Payments (Appendix C)

In FY 2011, the NRC completed an initial risk assessment 

to determine if any programs were susceptible to making 

significant improper payments in accordance with 

the 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 Recovery Improvement Act of 

2012 (IPERIA). The results of that assessment allowed 

the agency to conduct future risk assessments on a 

triennial basis. In its FY 2014 PAR, the NRC reported 

on the results of the improper payment risk assessment 

completed in that year.

The results of the FY 2014 risk assessment did not 

identify any programs that were susceptible to making 

significant improper payments. While the results of the 

FY 2014 risk assessment identified programs as low risk, 

the NRC continues to monitor its payment processes, in 

addition to conducting periodic reviews of key controls 

for IPIA programs identified by management. The NRC 

will continue to conduct a risk assessment every 3 years, 

in accordance with the IPIA, as amended by IPERA and 

IPERIA as well as OMB guidance. The next NRC IPIA 

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

NRC will conduct additional risk assessments, as needed, 

if there are material changes in the way programs operate 

or if the NRC establishes new programs. 

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 2015 FFMIA Results 

The Office of Chief Financial Officer (OCFO) successfully 

completed a system upgrade for its core general ledger 

system, the Financial Accounting and Integrated 

Management Information System (FAIMIS).  The upgrade 

provides the platform for the required functionality 

to incorporate the U.S. Treasury Government-wide 

Treasury Accounting Symbol (GTAS) reporting mandate 

for FY 2015.  The agency successfully migrated to the 

E-Gov Travel Service 2 system (ETS2) in May 2015.   The 

Human Resource Management System (HRMS), formerly 

known as Time and Labor Modernization (TLM), 

has completed the upgrade planning and has begun 

the migration to the new release to address legislative 

requirements and strengthen controls.  Finally, the Budget 

Formulation System (BFS) has launched a pilot program 

for interactive reporting to enhance and centralize the 

agency’s resource planning and forecasting business 

process.     

In accordance with guidance established in A-123, 

Appendix D, the Chief Financial Officer reviewed audit 

reports and other sources of information, and as of 

September 30, 2015, can provide reasonable assurance 

that NRC’s financial systems substantially comply with the 

requirement of the FFMIA.    

Financial Management Systems 

Strategies 

For a second consecutive fiscal year, the OCFO has 

completed significant financial system modernization 

projects in FY 2015.  The NRC plans to further upgrade 

FAIMIS to acquire the necessary required functionality 

for the FY 2018 OMB-mandated Internet Payment 

Platform (IPP) implementation.  The agency will continue 

to integrate and further automate FAIMIS with the 
C h a p t e r 1 n Management’s Discussion and Analysis

29

newly implemented ETS2.  The BFS has introduced a 

pilot integrated reporting dashboard and completed 

a minor system upgrade to coincide with the agency’s 

infrastructure internet browser upgrade project.  

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 2015, the NRC paid 98 percent of the 8,043 invoices 

subject to the Prompt Payment Act on time.

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 2015, delinquent debt was $4.6 

million or .5 percent of annual billings.  The NRC was 

able to refer 93.5 percent of all eligible debt over 180 days 

delinquent to the Treasury for collection. In addition, the 

NRC met the collections requirements of Omnibus Budget 

Reconciliation Act of 1990 which requires the agency 

to recover through fees approximately 90 percent of its 

budget authority in the current fiscal year.  

The Digital Accountability and Transparency Act of 2014

reduces the referral of delinquent invoices from 180 to 120 

days for FY 2016. To accomplish this new requirement, 

the NRC will request input from the program and regional 

offices earlier in the quarter and the amount of time given 

to respond to requests will be limited so that appropriate 

actions can be taken in a timely manner.

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, 2015, 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) , Defense Nuclear Facilities 

Safety Board, and amounts appropriated for generic 

homeland security activities.  Based on the Consolidated 

and Further Continuing Appropriations Act of 2015, the 

NRC’s fee recovery amount for the FY 2015 budget was 

$895.5 million.  After accounting for billing adjustments, 

the total amount to be billed as fees to licensees was 

$888.7 million.  The NRC Fee Recovery Schedules for 

FY 2015 are located at http://www.gpo.gov/fdsys/pkg/

FR-2015-06-30/pdf/2015-15763.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 (OIG) open audit 

recommendations. The status of these recommendations 

can be found at: http://www.nrc.reading-rm/

due-collections/insp-gen/.
30 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 31
32
C h a p t e r 2 n Program Performance

33

MEASURING AND REPORTING

This chapter presents detailed information on the 

U.S. Nuclear Regulatory Commission’s (NRC’s) activities 

and performance in achieving its mission during fiscal 

year (FY) 2015. The agency’s FY 2014–2018 Strategic 

Plan presents the agency’s mission, strategic goals, 

objectives, and strategies. This chapter describes the 

NRC’s performance results and program achievements in 

accomplishing the agency’s strategic goals and objectives. 

The NRC has implemented improved performance 

indicators that took effect at the beginning of FY 2015 to 

reflect the updated Strategic Plan.

The NRC’s mission is to 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. The NRC’s vision 

is to carry out the mission as a trusted, independent, 

transparent, and effective nuclear regulator. The agency’s 

strategic goals are to ensure the safe and secure use of 

radioactive materials.

The NRC’s safety and security activities are carried out 

through two major programs: Nuclear Reactor Safety, 

consisting of Operating Reactors and New Reactors, 

business lines, and Nuclear Materials and Waste Safety, 

consisting of Fuel Facilities, Nuclear Materials Users, 

Decommissioning and Low‐Level Waste, Spent Fuel 

Storage and Transportation, and High-Level Waste 

business lines. The agency accomplishes its mission to 

ensure safety and security through regulatory activities 

that include licensing, oversight, and rulemaking. 

Licensees are subject to oversight through inspection, 

assessment, investigation, and enforcement actions, the 

last two constituting a subset of oversight when there are 

suspected or proven instances of noncompliance with 

safety or security regulations. The NRC’s event response 

activities prepare the agency to respond to emergencies 

involving radioactive materials.

In addition, the NRC’s safety research program supports 

the agency’s regulatory activities. The program evaluates 

and resolves safety issues for nuclear power plants 

and other facilities and materials users that the agency 

regulates. The research program assesses and confirms 

existing and potential safety issues; supplies independent 

expertise, information, and technical judgments to 

support timely and realistic regulatory decisions; reduces 

uncertainties in risk assessments; and develops technical 

regulations and standards. The NRC also engages in 

cooperative research with other government agencies, the 

nuclear industry, universities, and international partners.

This chapter also describes the agency’s progress 

in achieving crosscutting strategies of regulatory 

effectiveness and openness, its management objectives 

related to information technology, information 

management, and human capital. In addition, this chapter 

includes information on the program evaluations used to 

assess performance and to develop the agency’s annual 

performance plan. A discussion of the data sources, data 

quality, and completeness and reliability of performance 

data is also included.

Ensure the safe use of 1 radioactive materials.

strategic goal

STRATEGIC OBJECTIVE

Strategic objectives express more specifically the results 

that are needed to achieve a strategic goal. The strategic 

objective for Goal 1 is to:

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. 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.
C h a p t e r 2 n Program Performance

34

In FY 2015, the NRC demonstrated that it achieved the 

Safety strategic objective by meeting the targets for the 

performance indicators listed below. Since the agency 

is required to report on performance information for 

the previous five fiscal years, Table 3 shows the agency’s 

annual safety performance indicators and results for 

FYs 2010–2014.

PERFORMANCE INDICATORS: FY 2015

The purpose behind the NRC’s performance indicators 

is to prevent or minimize undesirable outcomes. 

Therefore, the trends indicating the agency’s success in 

accomplishing its mission would be at or near zero.

The following performance indicators were developed 

in conjunction with the development of the agency’s 

FY 2014–2018 Strategic Plan. More information on the 

abnormal occurrence (AO) criteria is found in the Data 

Sources, Data Quality, and Data Security section of this 

chapter.

Safety Objective 1: Prevent and mitigate accidents and 

ensure radiation safety.

Performance Goal 1: Prevent radiation exposures that 

significantly exceed regulatory limits.

Performance Indicator: Number of radiation exposures 

that meet or exceed AO criteria I.A.1 (unintended 

radiation exposure to an adult), I.A.2 (unintended 

radiation exposure to a minor), or I.A.31

 (radiation 

exposure that has resulted in unintended permanent 

functional damage to an organ or physiological system)

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

New Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Nuclear Materials Users Target: ≤3 Actual: 2

1

All references to the AO criteria in this section refer to the definitions in 

Appendix A of the “Report to Congress on Abnormal Occurrences: Fiscal 

Year 2014,” NUREG‐0090, Volume 37, published in May 2015.

Discussion: This indicator tracks the effectiveness of 

the NRC’s nuclear safety regulatory programs, in part 

through the number of radiation exposures to the public 

and occupational workers that exceed AO criteria. This 

indicator tracks both nuclear reactors and other nuclear 

materials users, such as hospitals and industrial users. 

Two such exposures took place during FY 2015. Incidents 

of this nature would be included in the NRC’s annual 

report to Congress, the latest version of which is available 

online through the NRC’s Agencywide Documents Access 

and Management System (ADAMS) at Accession No.  

ML15140A285. 

Performance Goal 2: Prevent releases of radioactive 

materials that significantly exceed regulatory limits.

Performance Indicator: Number of releases of 

radioactive materials that meet or exceed AO criterion 

I.B (discharge or dispersal of radioactive material from its 

intended place of confinement that results in releases of 

radioactive material)

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

New Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Nuclear Materials Users Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s nuclear material regulatory programs. Exceeding 

the applicable regulatory limits is defined as a release 

of radioactive material that causes a total effective 

radiation dose equivalent to individual members of the 

public greater than 0.1 rem in a year, exclusive of dose 

contributions from background radiation. In FY 2015, 

there were no releases of this nature.

Performance Goal 3: Prevent the occurrence of any 

inadvertent criticality events.

Performance Indicator: Number of instances 

of unintended nuclear chain reactions involving 

NRC‐licensed radioactive materials

Timeframe: Annual
C h a p t e r 2 n Program Performance

35

Business Line FY 2015

Operating Reactors Target: 0 Actual: 0

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s criticality regulatory programs through the number 

of unintended self‐sustaining nuclear reactions occurring 

within a fiscal year. Intended criticality events include 

the startup of a nuclear power reactor.

Performance Goal 4: Prevent accident precursors and 

reductions of safety margins at commercial nuclear power 

plants (operating or under construction) that are of high 

safety significance.

Performance Indicator: Number of malfunctions, 

deficiencies, events, or conditions at commercial nuclear 

power plants (operating or under construction) that meet 

or exceed AO criteria II.A‐II.D (events at commercial 

nuclear power plant licensees)

Timeframe: Annual

Business Line FY 2015

Operating Reactors Target: ≤3 Actual: 0

New Reactors Target: ≤3 Actual: 0

Discussion: The NRC’s Reactor Oversight Process (ROP) 

monitors nuclear power plant performance in three areas: 

(1) reactor safety, (2) radiation safety, and (3) security. 

Analysis of individual plant performance is based on both 

licensee‐submitted performance indicators and NRC 

inspection findings, which are independent assessments 

of licensee performance by the NRC as the regulatory 

authority. Each issue is evaluated and assigned one of 

four categories in order of increasing significance: green, 

white, yellow, or red. Greater oversight by the NRC results 

as the severity of the findings increase. A red finding or 

performance indicator signals a significant reduction in 

the safety margin in the measured area. No red findings 

were issued in FY 2015.

Performance Goal 5: Prevent accident precursors and 

reductions of safety margins at nonreactor facilities or 

during transportation of nuclear materials that are of high 

safety significance.

Performance Indicator: Number of malfunctions, 

deficiencies, events, or conditions at nonreactor facilities 

or during transportation of nuclear materials that meet or 

exceed AO criteria III.A or III.B (events at facilities other 

than nuclear power plants and all transportation events)

Timeframe: Annual

Business Line FY 2015

Fuel Facilities Target: 0 Actual: 0

Decommissioning and Low-Level 

Waste Target: 0 Actual: 0

Spent Fuel Storage and 

Transportation Target: 0 Actual: 0

Discussion: This indicator tracks the effectiveness of the 

NRC’s safety programs for nonreactor facilities or during 

transportation of nuclear materials through the number of 

instances in which safety margins at nonreactor facilities 

are at unacceptable levels.

Performance Goal 6: Prevent medical events involving 

radioactive materials that result in death or have a 

significant unintended impact on patient health.

Performance Indicator: Number of medical events that 

meet or exceed a revised version of AO criterion III.C.3 

(events involving the medical use of radioactive materials 

in patients or human research subjects) to be developed 

in 2016

Timeframe: Annual

Business Line FY 2015

Nuclear Materials Users Target: N/A* Actual: 

* This indicator has been discontinued because the Commission approved 

alternate metrics in FY 2015 and did not approve the addition of Criterion 

III.C.3.

Discussion: This indicator tracks the effectiveness of the 

NRC’s regulatory safety program for the medical use of 

nuclear material through the number of medical events 

meeting or exceeding criterion III.C.3.
C h a p t e r 2 n Program Performance

36

Table 3 – FY 2010-2014 Performance Indicators Results

Goal – Safety: Ensure safe use of radioactive materials

1. Number of New Conditions Evaluated as Red by the NRC’s Reactor Oversight Process*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3

Replaced by Safety 

Performance 

Goal 4

Actual 0 1 1 0 0

* This measure is the number of new red inspection findings and the number of new red performance indicators during the fiscal year. Programmatic issues at 

multiunit sites that result in red findings for each individual unit are considered separate conditions for purposes of reporting for this measure. A red performance 

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

reporting for this measure. 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 ROP external Web page was updated to show the red indicator. 

2. Number of Significant Accident Sequence Precursors (ASPs) * of a Nuclear Reactor Accident

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 0 ≤ 0 ≤ 0 ≤ 0 ≤ 0

Replaced by Safety 

Performance 

Goal 4

Actual 0 0 0 0 0

*Significant ASP events have a conditional core damage probability (CCDP) or ΔCDP of greater than 1×10−3. Such events have a 1/1000 (1×10−3) 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 is ≤ 3 with No Performance Leading to the Initiation of an Accident Review 

Group*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 3 ≤ 3 ≤ 3 ≤ 3 ≤ 3

Replaced by Safety 

Performance 

Goal 4

Actual 0 2 1 0 0

*This measure is the number of plants that have entered the process in Inspection Manual Chapter (IMC) 0350, “Oversight of Reactor Facilities in a Shutdown 

Condition due to Significant Performance and/or Operational Concerns,” dated December 15, 2006; the multiple/repetitive degraded cornerstone column; or the 

unacceptable performance column during the fiscal year (but, were not in these columns or process the previous fiscal year). Data for this measure are obtained 

from the NRC’s external Web 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 IMC 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 Performance is ≤ 1*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 Discontinued** Actual 0 0 0 0 0

*Considering all indicators qualified for use in reporting

**Indicator discontinued with the adoption of the indicators for the FY2014-2018 Strategic Plan
C h a p t e r 2 n Program Performance

37

5. Number of Events with Radiation Exposures to the Public or Occupational Workers That Exceed Abnormal Occurrence 

(AO) Criterion I.A.3*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Reactors Target 0 0 0 0 0 Replaced by Safety 

Performance Goal 1

Reactors Actual 0 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2 Replaced by Safety 

Performance Goal 1

Materials Actual 0 0 0 0 0 1

Waste Target 0 0 0 0 0 Replaced by Safety 

Performance Goal 1

Waste Actual 0 0 0 0 0 0

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

6. Number of Radiological Releases to the Environment That Exceed Applicable Regulatory Limits*

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Reactors Target 0 0 0 0 0 Replaced by Safety 

Performance Goal 2

Reactors Actual 0 0 0 0 0 0

Materials Target ≤ 2 ≤ 2 ≤ 2 ≤ 2 ≤ 2 Replaced by Safety 

Performance Goal 2

Materials Actual 0 0 0 0 0 0

Waste Target 0 0 0 0 0 Replaced by Safety 

Performance Goal 2

Waste Actual 0 0 0 0 0 0

*With no event exceeding AO criterion I.B

Table 3 – FY 2010-2014 Performance Indicators Results (continued)

rulemaking, research, international activities, event 

response, and generic homeland security functions.

The operating level priorities for the Operating Reactors 

business line during FY 2015 were as follows:

1. Ensure safe and secure operation of the nation’s 

nuclear power plants by effectively implementing the 

Reactor Oversight Process and responding to events/

emergencies as needed.

2. Resolve emergent technological and security issues in a 

safe and efficient manner.

3. Ensure plants resolve safety, security, and technical 

issues.

4. Implement the Tier 1 actions regarding the lessons 

learned from the Fukushima Dai-chi Accident.

5. Work to reduce the licensing action backlog in 

accordance with agency metrics.

Nuclear Reactor Safety

The NRC regulates activities that provide for the safety and 

security of 99 operating reactors, 31 test and research reactors, 

and 5 reactors under construction. Following is a description 

of the safety and security activities during FY 2015 that resulted 

in achievement of the strategic goals, strategic objectives, and 

performance‐indicator targets for the Operating Reactors 

and New Reactors business lines to ensure the safe use of 

radioactive materials.

Operating Reactors

NRC‐licensed nuclear reactors account for about 

20 percent of U.S. net electric generation, providing 

roughly 770 billion kilowatt‐hours of electricity. The 

agency monitors the safe and secure operation of 

the 99 operating power reactors. The NRC achieves 

its strategic goals through its licensing, oversight, 
C h a p t e r 2 n Program Performance

38

6. Completion of Watts Bar 2 licensing and providing 

effective oversight of startup activities.

7. Ensure safe transition to decommissioning for affected 

plants.

8. Timely and efficient review of Molybdenum-99 

(Moly-99) license applications.

Licensing

The agency’s nuclear reactor licensing activity ensures that 

the operation of civilian nuclear power reactors and test 

and research reactors adequately protect public health and 

safety and the environment while safeguarding radioactive 

material used in nuclear reactors. Licenses establish 

specific technical and operating standards for individual 

facilities. During FY 2015, the NRC continued actions to 

address a backlog of operating reactor licensing actions 

caused by priority on the Fukushima enhancements. More 

information is available at this link: http://www.nrc.gov/

reactors/operating/ops-experience/japan-dashboard.html.

Prairie Island Nuclear Generating Plant, Units 1 and 2

In FY 2015, the NRC approved the Vogtle Units 1 and 2 

license amendment to implement risk‐informed 

categorization and treatment of structures, systems, and 

components for nuclear power reactors in accordance 

with 10 CFR 50.69, “Inspections, Records, Reports, 

Notifications.” This is the first plant to implement the rule.

Progress continued on assessing and implementing the 

regulatory activities that were an outcome of the agency’s 

response to Fukushima. The Commission provided 

direction on all of the Tier 1 activities (i.e., items to 

impement without delay), which continue to be worked 

under aggressive schedules, requiring close monitoring to 

ensure that implementation of the activities is successful. 

As part of Tier 1 actions staff will have completed 

regulatory audits at 49 of the 63 reactor sites to support 

implementation of the Mitigation Strategies and Spent 

Fuel Pool Instrumentation orders by the end of 2016; staff 

issued Interim Safety Evaluations to all operating units 

with Mark I or Mark II containments related to Phase 1 of 

EA-13-109; the Commission approved a staff-developed 

action plan to ensure each site’s reevaluated flooding 

hazard is addressed by mitigating strategies by the end 

of 2016; and the staff issued Staff Assessments to half of 

the operating fleet for their reevaluated seismic hazards. 

The staff has continued work on remaining Tier 2 & 3 

activities and will submit a paper to the Commission 

detailing closeout plans for each activity at the end of 

October 2015.

During FY 2015, the NRC continued to review 

the construction permit application for a medical 

radioisotope facility from SHINE Medical Technologies, 

Inc. (SHINE), submitted in FY 2013. Additionally 

in FY 2015, the NRC received a construction permit 

application from Northwest Medical Isotopes, LLC. 

(NWMI) to build a medical radioisotope facility in 

Columbia, Mo. The NWMI two-part construction permit 

application, consisting of an environmental report and 

preliminary safety analysis report was submitted to the 

NRC on February 5 and July 20, 2015, respectively. The 

NRC also continued to review a license amendment 

request submitted by Oregon State University (OSU) 

requesting approval to irradiate low-enriched uranium 

targets in the OSU TRIGA® reactor for the explicit 

purpose of demonstrating the production of Moly-99 in 

a research reactor. On March 26, 2015, the NRC issued 

a materials license to Niowave, Inc. to possess and use 

small quantities of uranium isotopes to demonstrate 

the ability to produce small quantities of Moly-99. The 

NRC continued to hold public meetings in FY 2015 with 

SHINE and NWMI to discuss technical information 

related to these ongoing reviews as well as with potential 
C h a p t e r 2 n Program Performance

39

applicants, including Coqui Radiopharmaceuticals 

Corporation, General Atomics, and Niowave in 

anticipation of potential construction permit applications 

or licensing amendment requests.

The NRC prioritizes all licensing action reviews in 

accordance with their safety significance; however, 

because of Fukushima-related work competing for the 

same critical skillsets, the backlog inventory of operating 

reactor licensing actions over one year old grew since 

2012. The staff applied additional resources to support 

reducing the licensing action backlog. Additionally, staff 

and senior management increased focus on the timeliness 

of all licensing actions, specifically by heightening 

attention on actions 9-12 months old to ensure they 

do not enter the backlog, as well as to complete actions 

over one year old already in the backlog. The efforts 

have enabled staff to improve timeliness performance 

in processing licensing actions. The annual average 

performance at the end of August 2015 was 88 percent 

of licensing actions completed within one year, which is 

an improvement from the annual average of 87 percent 

reported at the end of FY 2014, and a more significant 

improvement from the spring of 2014 when staff 

performance declined to 83 percent. Further, the staff 

has reduced the backlog by more than 60 percent since 

November 2014 (112 actions to 43 actions). The staff 

anticipates that continued focus in this area will support 

improving timeliness performance further in FY 2016. 

The NRC completed preoperational test inspections at 

Watts Bar 2 in FY 2015, and published documentation 

of the closure of a number of open items including 

hydrology, emergency preparedness, cyber security, and 

electrical issues. 

Power Uprates

Since the 1970s, the Nation’s utilities have sought power 

uprates as a way to generate more electricity from existing 

nuclear plants. By August 2014, the NRC had approved 

156 power uprates, resulting in a gain of approximately 

7,326 megawatts electric at existing plants, equivalent 

to the gain of seven new power reactors added to the 

power grid. The NRC evaluates nuclear reactor power 

uprate applications to determine whether licensees can 

safely increase the power output of their plants. The NRC 

review focuses on the potential impacts of the proposed 

power uprate on overall plant safety and confirms that 

plant operation at the increased power level will be safe.

In December 2014, the NRC staff conducted its most 

recent survey of nuclear power plant licensees’ plans to 

submit power uprate applications over the next five years. 

This latest information indicates licensees plan to request 

power uprates for seven nuclear power plants during the 

next five years.

License Renewal

The NRC grants reactor operating licenses for 40 years, 

which can be renewed for additional periods of 20 years. 

The NRC has issued renewed licenses for 76 power reactor 

units currently licensed to operate and has 9 license 

renewal applications for 16 reactor units under review. 

The review process for renewal applications is designed to 

assess whether a reactor can continue to be operated safely 

during the extended period. To renew a license, the utility 

must demonstrate that aging will not adversely affect 

passive, long‐lived structures or components important 

to safety during the renewal period. Additionally, the 

agency assesses the potential impacts of the extended 

period of operation on the environment. Inspectors travel 

to the nuclear reactor facility to verify the information 

in the license renewal application and confirm that 

aging management programs have been, or are ready 

to be, implemented. Following the safety review, the 

NRC prepares and makes available to the public a safety 

evaluation report.

The agency issued the renewed operating license for 

Limerick Generating Station, Callaway Nuclear Plant, 

Unit 1, and Sequoyah Nuclear Plant, Units 1 and 2 

during FY 2015. These represented the first renewed 

license used since the Commission’s approval of the 

revised rule at 10 CFR 51.23, “Environmental Impacts 

of Continued Storage of Spent Nuclear Fuel Beyond the 

Licensed Life for Operation of a Reactor,” and associated 

Generic Environmental Impact Statement for Continued 

Storage of Spent Nuclear Fuel, NUREG-2157, “Generic 

Environmental Impact Statement for Continued Storage 

of Spent Nuclear Fuel.
C h a p t e r 2 n Program Performance

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Oversight

The NRC provides continuous oversight of nuclear 

reactors through the Reactor Oversight Process (ROP) 

to verify that nuclear plants are operated safely and in 

accordance with the agency’s rules and regulations. 

The NRC performs a rigorous program of inspections 

at each plant, performs supplemental inspections, 

and takes additional actions to ensure that the plants 

address significant safety issues consistent with the 

ROP (see Figure 14). The NRC has at least two full‐time 

resident inspectors at each operating nuclear power plant 

site performing inspections and oversight activities. 

Inspectors from NRC regional offices and headquarters 

also conduct inspections at each nuclear power plant site 

in accordance with the ROP. The NRC has full authority 

to take action to protect public health and safety, up 

to and including shutting the plant down. The NRC 

also conducts public meetings with licensees to discuss 

the results of the agency’s assessments of their safety 

performance.

The NRC achieved the following significant oversight 

highlights in FY 2015.

•	 Issued a finding of substantial safety significance 

(Yellow) at Arkansas Nuclear One, Units 1 and 2, 

caused by internal flood protection deficiencies.

•	 Completed the inspection and assessment activities 

at Fort Calhoun Station necessary for the NRC to 

conclude that the licensee adequately satisfied the 

criteria for transition from the IMC 0350 process to the 

IMC 0305 oversight process. As a result, Fort Calhoun 

transitioned back to regular ROP oversight effective 

April 1, 2015.

•	 Conducted special inspections at Pilgrim (loss of offsite 

power because of winter storm Juno), at River Bend 

(actuation of the Reactor Protection System), and at 

Duane Arnold (torus coating delamination).

• Issued White findings to Pilgrim (safety/relief valve’s 

failure to open, Clinton (failure of service water pump), 

Dresden (reliable operation of valves), and River Bend 

(simulator fidelity). The agency completed a special 

inspection at Ft. Calhoun (aux FW valve failures), 

and completed inspections at Palisades (radiation 

safety), Millstone (TDAFW pump trips), and Salem 

(unplanned manual scrams). 

Investigation and Enforcement

Compliance with NRC requirements plays an important 

role in giving the agency confidence that safety is being 

maintained not only for operating reactors but for all 

areas that the agency regulates. NRC policies deter 

noncompliance and encourage prompt identification 

and timely, comprehensive corrective actions. Willful 

violations are of particular concern. Licensees, 

contractors, and their employees who do not achieve 

the high standard of compliance expected by the NRC 

are subject to enforcement sanctions. Each enforcement 

action depends on the circumstances of the case. The 

NRC will not permit licensees to continue to conduct 

licensed activities if they cannot achieve and maintain 

adequate levels of safety. 

In FY 2015, the NRC processed 37 escalated enforcement 

actions with 8 of the escalated actions supported through 

an investigation of potential criminal wrongdoing. In 

FY 2015, the NRC issued one confirmatory order with 

civil penalty to the River Bend Station for willful loss of 

Safeguards Information (SGI). The agency also issued 

one notice of violation with civil penalty to Sequoyah for 

falsification of fire watch records and a notice of violation 

to an individual for attempting to subvert the fitness-forduty program at the Columbia Generating Station. 

Figure 14 – Reactor Oversight Action Matrix 

Performance Indicators
C h a p t e r 2 n Program Performance

41

Operating Reactors Rulemaking

During FY 2015, there was one final operating reactor 

rulemaking issued: The final American Society of 

Mechanical Engineers (ASME) Code Case rulemaking 

was published in November 2014. In addition, the staff 

also reviewed and resolved 17 petitions for rulemaking. 

The staff also accomplished a major milestone by 

completing one of the Fukushima Lessons-Learned 

rulemaking activities, the Mitigation of Beyond 

Design Basis Events (MBDBE) by providing the 

proposed rule to the Commission on April 30, 2015. A 

Commission meeting was conducted in July 2015. On 

the other Fukushima Lessons-Learned rulemaking (i.e., 

Containment Protection Release Reduction (CPRR)), 

upon consideration of the draft regulatory basis provided 

to the Commission in June 2015, the Commission 

directed the staff to cease rulemaking activities on CPRR.

The staff continues to develop several high-priority 

rulemakings, including the 10 CFR 50.46c, “Emergency 

Core Cooling System Performance during Loss-ofCoolant Accidents,” final rule, which is due to the 

Commission in February 2016. 

Operating Reactors Research

The NRC research program supports the agency mission 

by providing independent technical advice, expertise, 

tools, and information for identifying and resolving safety 

issues, making regulatory decisions, and promulgating 

regulations and guidance for nuclear power plants and 

other facilities and materials regulated by the agency. 

In support of the licensing and oversight of operating 

reactors, the research program develops technical bases 

and information to support timely and realistic regulatory 

decisions and provides confirmatory research to verify 

licensee submittals independently. The research program 

also reduces uncertainties in risk assessments and 

coordinates the development of consensus and voluntary 

standards for agency use. In FY 2015, substantive research 

work was performed in the following technical areas. 

Fire Safety Research

The NRC has continued conducting independent and 

collaborative research with the Electric Power Research 

Institute (EPRI) and international parties to develop 

state-of-the-art tools, methods, and data in support of 

regulatory activities related to fire protection and fire risk 

analyses. 

In FY 2015, key fire research included: testing and expert 

elicitation to develop state-of-the-art advancements for 

determining the probability of circuit hot shorting as 

a result of electrical fires in commercial nuclear power 

plants; evaluation of fire protection compensatory 

measures used in nuclear power plants; publication 

of an updated fire events database; continued 

improvements and advancements in fire probabilistic 

risk assessment (PRA) and human reliability analysis, 

specifically, main control room abandonment; fire 

modeling development and advancing the (a) verification 

and validation of select fire modeling, (b) continued 

study of electrical cable combustion, flame spread, 

and fire retardant coatings, and (c) testing of Very 

Early Warning Fire Detection Systems; performing 

experiments to better understand the heat release rate 

from electrical enclosures;  and leading a High Energy 

Arcing Fault (HEAF) project with the international 

community under a program with the Organization 

for Economic Co-operation and Development to better 

understand the risk from HEAF events.

Radiation Protection Research

This research supports the agency in the areas of 

radiation protection, dose assessment, and assessment 

of human health effects for reactor licensing, emergency 

preparedness, and nuclear security activities. 

In FY 2015, the NRC released an updated version of 

the Radiological Assessment System for Consequence 

Analysis (RASCAL) computer code version 4.3.1. This 

version of the code contains a number of new features and 

revisions to support licensee implementation of multi-unit 

dose assessment capability as addressed in the proposed 

rule on MBDBE, which addressed lessons learned during 

the NRC’s response to the events during the Fukushima 

accident in Japan. Also in FY 2015, the NRC released 

an updated version of Radionuclide Transport, Removal 

and Dose Estimation (RADTRAD) computer code 
C h a p t e r 2 n Program Performance

42

version 4.5. This version of the code enhances the user 

interface and adds new features to aid the agency in 

performing licensing reviews. Finally, the agency recently 

launched a new program called the Radiation Protection 

Code Analysis and Maintenance Program (RAMP), 

which is a collaborative international effort supporting the 

development and maintenance of radiation protection and 

dose assessment codes.

Materials Degradation

The NRC continues to research material degradation 

issues for currently licensed reactors and waste and 

decommissioning facilities. The purpose of this research 

is to identify component-specific degradation mechanisms 

and their implications for structural and component 

integrity of existing reactors as well as waste and 

decommissioning facilities. 

In FY 2015, in cooperation with DOE, the NRC continued 

to advance the technical basis for subsequent license 

renewals by identifying technical gaps that need to be 

addressed. The NRC continued its ongoing scrutiny of 

the integrity of steam generators to support response to 

emergent issues and future needs. The NRC also supports 

the development of confirmatory tools incorporating 

uncertainty quantification to assess piping and reactor 

pressure vessel integrity for independent verification of 

licensee submittals.  

Nondestructive Examination Research

In accordance with 10 CFR Part 50.55(a), “Codes and 

Standards,” licensees must inspect structures, systems, 

and components to ensure that the requirements of 

the American Society of Mechanical Engineers Boiler 

and Pressure Vessel Code (ASME Code) are met and 

that structures, systems, and components can continue 

to perform their safety functions. The NRC conducts 

research on nondestructive examination (NDE) of 

light-water reactor (LWR) components and structures 

and provides the technical basis for regulatory decisionmaking related to these requirements. The NRC program 

at Pacific Northwest National Laboratory (PNNL) is 

evaluating the ability to detect and characterize primary 

water stress-corrosion cracking in LWR components. In 

addition, the NRC is directing research at PNNL on the 

inspection of coarse-grained austenitic alloys and welds. 

NDE of these components is especially difficult because 

of signal attenuation and reflections. Research findings 

will support appropriate inspection requirements for these 

components to ensure safety. 

Digital Instrumentation and Control

Research

The NRC’s research supports the licensing of new digital 

instrumentation and control systems intended for use 

in retrofits to operating reactors and for use in new and 

next generation reactors. Research topics include safety, 

security, and knowledge management aspects of digital 

instrumentation and control systems. The research 

involves hazard analysis and failure mode analysis to 

assess safety, reliability, and security and to support safety 

assurance of digital systems. The research supports 

development of technical bases for improved regulatory 

guidance for licensing reviews of digital systems. 

Knowledge management research includes technical 

collaborations with the Electric Power Research Institute 

(EPRI) and international entities and learning from 

operational experience. 

Electrical Engineering Research

NRC electrical engineering research supports developing 

technical bases for regulatory guidance, confirmatory 

research, assessing impacts of emerging technologies, 

and specific technical licensing issues to ensure safer 

operation of nuclear power plants (NPPs). Ongoing 

research is examining the reliability of onsite and offsite 

power systems, including station blackout mitigation, 

vital direct current system performance, environmental 

qualification of safety-related equipment, and Fukushimarelated topics. Research into limitations of electrical cable 

condition monitoring and qualification was initiated to 

support license renewal and the potential for extended 

license renewal. Long-term research in this area includes 
C h a p t e r 2 n Program Performance

43

impacts of smart grid implementation on NPP offsite 

power reliability.

Probabilistic Risk Assessment

The NRC continues to research the development 

of models, methods, and tools for probabilistic risk 

assessment (PRA) activities to support risk-informed 

regulatory decision-making such as licensing, rulemaking, 

and oversight of licensee performance. Specific examples 

include continued investigation of PRA methods for 

digital instrumentation and control systems, improved 

PRA software calculational and modeling capabilities, 

and development of new fire and external hazard nuclear 

power plant risk models for agency use. In FY 2015, the 

NRC continued to work on a multi-year project to develop 

a new integrated site PRA study that will quantitatively 

estimate the consequences of severe accidents for all 

modes of operation, all significant hazard categories, and 

all significant radiological sources onsite (i.e., reactors 

and spent fuel in pool and dry cask storage). The agency 

also continues to support PRA standards to support riskinformed regulatory activities for both operating and new 

reactors.

Natural Hazards Research

The NRC’s natural hazards research plan that has 

been broadly reviewed for both technical quality and 

programmatic elements. The current emphases of this 

research plan is to evaluate potential risks to U.S. nuclear 

plants from severe earthquakes, tsunamis and other 

flooding hazards, and to ensure the continued safety of 

new and operating U.S. nuclear power plants. Over the 

last year the flooding portion of this work has produced 

a Probabilistic Flood Hazard Research Program Plan and 

initiated eleven research projects to address both shortand long-term goals expressed in the joint user-need from 

the operating and new reactor licensing programs. The 

NRC research on natural hazards is needed to meet the 

agency’s safety strategies to enhance the risk-informed 

and performance-based regulatory framework. The 

research also produces timely results and insights that 

are essential for the review of the licensee responses to 

the 50.54(f) letter that was sent to licensees related to the 

implementation of the Tier 1 recommendations from the 

Fukushima Near-Term Task Force (NTTF) on seismic and 

flooding reevaluations (recommendations 2.1 and 2.2). 

Concrete Degradation Research

In support of license renewal and future revisions of the 

Generic Aging Lessons Learned (GALL) report, the NRC 

initiated a research program with the National Institute 

of Standards and Technology (NIST) to increase the 

understanding of chemical processes that can degrade 

the long-term performance of concrete. In particular, 

alkali silicate reaction is being studied to determine the 

progress of the chemical process over time and the effect 

on the strength of affected concrete over the service life of 

the structure. Coordinated efforts with the international 

community (Nuclear Energy Agency/Committee on 

the Safety of Nuclear Installations) are bringing in the 

experience of other countries and cooperative efforts are 

yielding ongoing research results. The NRC participated 

in an international workshop on concrete degradation 

held at NIST in June 2015.

Severe Accident and Consequence

Research Analysis

The NRC plans, develops, and manages research programs 

that create computer codes, models, and experimental 

databases for evaluating nuclear reactor and plant systems 

under severe accident conditions for current, new, and 

advanced reactors. State-of-the-art analytical techniques 

are used to develop realistic best estimates of the potential 

consequences for the public of low-likelihood accidents 

involving nuclear power plants and spent fuel storage and 

transportation, which could release radioactive material 

into the environment. Major projects in this area are 

detailed below. 

In FY 2015, research was completed to develop the 

technical basis for the boiling-water reactor (BWR) 

Mark I/II containment protection and release reduction 

(CPRR) rulemaking effort. The analysis estimated 

the risk of potential radioactive releases and offsite 
C h a p t e r 2 n Program Performance

44

consequences of Mark I and Mark II containment failure 

due to an extended loss of alternating power (ELAP) 

accident caused by a beyond-design-basis external event. 

Additional analytical work is being conducted to analyze 

accident progression and offsite consequences for a PWR 

plant with an ice condenser containment. The NRC is 

participating in domestic research with DOE and the 

EPRI and international research with the Organization 

for Economic Co-operation and Development (OECD) 

and other international bodies to better understand 

the accident progression and lessons learned from the 

multiple reactor units during the Fukushima Dai-ichi 

Nuclear Power Plant accident. Examples include the 

OECD-led Fukushima accident benchmark exercise, 

a DOE/NRC joint effort on Fukushima accident 

reconstructions, and several Nuclear Energy Agency 

(NEA) studies on related topics. 

Through the State-of-the-Art Reactor Consequence 

Analyses (SOARCA) project, the NRC has developed an 

updated body of knowledge on the realistic outcomes of 

selected important severe reactor accidents for two pilot 

plants, Peach Bottom and Surry. The NRC completed an 

uncertainty analysis of one of the SOARCA scenarios, the 

Peach Bottom unmitigated long-term station blackout, 

to take an integrated look at uncertainties in the accident 

progression and offsite consequence analyses. The results 

of the analysis show that the uncertainties studied do 

not change the overall SOARCA conclusions for this 

accident scenario. The analysis is publicly available in 

draft NUREG/CR-7155 (ML13189A145) and is in the 

process of being published as a finalized NUREG report. 

The staff is currently conducting two other related 

analyses to further update the severe accident knowledge 

base and support a variety of ongoing projects: (1) an 

uncertainty analysis of the SOARCA Surry unmitigated 

short-term station blackout and (2) an analysis of accident 

progression and offsite consequences for a PWR plant 

with an ice condenser containment (Sequoyah). 

Human Reliability Analysis Research

The NRC continues to conduct research to improve 

human reliability analysis (HRA) methods, data, 

and models. Based on research insights, the NRC is 

developing an improved HRA model for agency use and a 

standard agencywide expert elicitation process. Further, 

the NRC is collaborating with the nuclear power reactor 

industry and international partners to collect human 

performance data from simulator exercises to inform 

both the qualitative and quantitative analysis portions of 

HRA methods. The agency is also developing a standard 

agencywide expert elicitation process for use in many 

regulatory processes. 

The NRC is creating updated human factors review 

guidance for the review of license applications for new and 

advanced reactors and is performing research in support 

of rulemaking activities on fatigue, technologies for drug 

and alcohol testing, and severe accident mitigation. 

Generic Issues Program

The NRC’s Generic Issues Program enables the public and 

the NRC staff to raise issues with potentially significant 

generic safety or security implications in order to ensure 

that those issues are assessed through an effective, 

collaborative, and open process and that pertinent 

information is appropriately disseminated. The agency 

is currently addressing four active generic issues and one 

proposed generic issue. 

Collection and Analyses of Operating

Experience Data

The NRC continues to collect and analyze operating 

experience data from power reactors to support risk 

analysis tools that are used in regulatory decision-making. 

Sources of information include, for example, NRC 

inspection reports, licensee event reports, and voluntary 

information provided by nuclear plant licensees to the 

Institute for Nuclear Power Operations (INPO). The 

NRC purchases the right to access the INPO Consolidated 

Events System, formerly known as the Equipment 

Performance Information and Exchange (EPIX) system, 

to use this data to support updates to risk analysis tools, 

such as the Standardized Plant Analysis Risk models. 

Analysis of the operating experience data is used to 

improve the understanding of the uncertainty associated 

with component reliability and performance, common-
C h a p t e r 2 n Program Performance

45

cause failure parameters, and initiating event frequencies. 

Further, trending analysis of operating experience has led 

the NRC to initiate research into causal factors associated 

with equipment failures that have challenged the safe 

operation of nuclear power plants. 

Collection and analysis of operating experience data also 

supports the NRC’s ROP Significance Determination 

Process (SDP), Operating Experience Clearinghouse, NRC 

Incident Investigation Program, event assessment process, 

the Generic Issues Program resolution process, and the 

Accident Sequence Precursor (ASP) Program. Operating 

experience data also supports development of generic 

communications and informs inspections conducted 

under the ROP to review, for example, equipment and 

performance issues related to age-related degradation 

of active components and the risk contribution from 

electrical equipment failures. Applying risk assessment 

techniques to operating experience has provided risk 

insights for the Operating Experience Clearinghouse on 

the potential risk significance of event notifications.

Thermal-Hydraulics Research and

Analysis

The NRC plans, develops, and manages research programs 

that develop computer codes, models, and experimental 

databases for evaluating coupled neutronic and thermalhydraulic transient behavior of nuclear reactors and plant 

systems under normal, abnormal, and accident conditions 

for current, new, and advanced reactors. The agency 

also performs thermal-hydraulic and computational 

fluid dynamics analytical analyses to support regulatory 

decision-making and safety assessments. The results 

of thermal-hydraulic research are also used to quantify 

margins, reduce unnecessary burden, and reduce 

uncertainties for areas of potentially high risk or safety 

significance. By working in partnerships with universities, 

laboratories, and other national and international 

research centers, the agency is able to leverage resources 

in this area. The agency recently released TRACE/ 

PARCS Version 5.0 Patch 4. This version incorporates 

new features for confirmatory analysis of contemporary 

nuclear plant designs and design changes. During FY 

2015, the updated code was used for modeling small 

modular reactors, simulating containment behavior, 

performing more accurate fuel rod behavior studies, and 

simulating plant transients such as Anticipated Transient 

Without Scram (ATWS), and Maximum Extended Load 

Line Limit Analysis Plus (MELLLA+). 

Event Response

The agency participated in the on-site visit to the 

Tennessee Valley Authority’s Clinch River site and led 

the emergency preparedness review for the early site 

permit pre-application readiness assessment. During the 

assessment, the staff identified approximately 70 questions 

spanning the 16 planning standards. NRC staff engaged 

in in-depth discussion to determine the extent of the 

readiness of the TVA application and the basis for the 

exemptions being requested. 

The NRC’s emergency preparedness and incident response 

activities ensure that adequate measures can and will 

be taken to mitigate plant events, to minimize possible 

radiation doses to members of the public, and to ensure 

that the agency can respond effectively to events at 

licensee sites.

The NRC successfully planned, executed, and evaluated 

a full participation exercise with the Sequoyah Nuclear 

Power Plant in a hostile‐action‐based exercise in 

November 2014 and a similar exercise at Fort Calhoun 

in August 2015. These exercises involved incident 

responders from various NRC program and regional 

offices.

The agency took part in the Southern Exposure 2015 

exercise on July 21-23 and September 9-10. For the first 

time in response to a (simulated) domestic nuclear reactor 

incident, the NRC continued exercise participation 

with the licensee after the completion of the licensee’s 

inspected exercise. The continued exercise play explored 

emergency response actions and considerations that could 

be necessary after the immediate actions and activations 

were completed (i.e., recovery aspects). This unique 

experience will inform future response planning and assist 

in development of an agency recovery plan. 
C h a p t e r 2 n Program Performance

46

New Reactors

The NRC reviews applications for standard new reactor 

design certifications (DCs), early site permits (ESPs), 

limited work authorizations, combined licenses (COLs), 

construction permits, and operating licenses. The current 

and anticipated applications for new reactors involve 

both large light‐water reactor facilities and small modular 

reactor facilities in a variety of projected locations 

throughout the United States. The NRC oversees 

construction activities for commercial nuclear power 

plants that include inspection, licensee performance 

assessment, investigation of allegations, and enforcement 

activities. This also includes the NRC’s Vendor Inspection 

Center of Expertise, which develops and implements 

quality assurance and vendor inspection programs for 

both new and operating reactors.

The operating level priorities for the New Reactors 

business line during FY 2015 were as follows:

1. Execute construction oversight at Watts Bar Unit 2 

and four AP 1000 Units, including the construction 

inspection program, ITAAC closure verification 

reviews, and necessary license amendments to ensure 

that the facilities are being constructed in conformity 

with the license or construction permit, the provisions 

of the Atomic Energy Act, and the Commission’s rules 

and regulations.

2. Implement the agency’s Vendor Inspection Program, 

including inspection, allegations, enforcement, 

communication to stakeholders, and self-assessments 

in support of the safety of both new reactor 

construction and operating reactors.

3. Plan for the effective transition of regulatory oversight 

and licensing authority for plants licensed under 

Part 52 to the operating reactor business line.

4. Conduct timely and high quality safety, security, and 

environmental reviews for all active combined licenses, 

design certification, and early site permit applications 

for large light-water reactors. Conduct appropriate 

rulemaking activities to support decisions on the 

licenses. Participate in mandatory and adjudicatory 

hearings to support the staff ’s licensing conclusions.

5. Establish and maintain the regulatory, technical, and 

policy infrastructure necessary to support timely and 

high-quality safety and environmental reviews for SMR 

applications and associated licensing actions expected 

in 2016- 2017.

6. Prepare for the licensing of non-light water reactors 

at a level commensurate with the industry’s pace of 

developing technologies and anticipated timeframes for 

potential industry submttals.

Licensing

New Reactor Design Certifications

The NRC reviews applications for standard DCs using 

10 CFR Part 52, “Licenses, Certifications, and Approvals 

for Nuclear Power Plants.” By issuing a DC, the NRC 

approves a nuclear power plant design independent of an 

application to construct or operate a plant. A DC is valid 

for 15 years from the date of issuance but can be renewed 

for an additional 10 to 15 years.

During FY 2015, the NRC published the final rule on the 

Economic Simplified Boiling‐Water Reactor (ESBWR) 

DC, and the rule became effective. The NRC also 

completed the acceptance review of the APR1400 DC 

application, accepted the application for docketing, 

and commenced the NRC staff ’s detailed technical review.

In FY 2015, the NRC continued the reviews of DC 

applications for the AREVA Evolutionary Power 

Reactor (EPRTM) design and Mitsubishi’s U.S. Advanced 

Pressurized‐Water Reactor design. Both of these DC 

application reviews were of limited scope at the requests 

of the applicants.

In February 2015, AREVA, Inc. requested that the NRC 

suspend the U.S. EPR DC application review. AREVA did 

not define an end date for the review suspension period.

Early Site Permits

As part of the licensing process, the NRC can issue an 

ESP to approve a site for a domestic nuclear power plant 

independent of an application for a COL. ESPs are valid 

for 10 to 20 years and can be renewed for an additional 10 

to 20 years.
C h a p t e r 2 n Program Performance

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During FY 2015, the NRC continued its safety and 

environmental review of one ESP application for the 

PSEG ESP site located adjacent to the operating Salem and 

Hope Creek Generating Stations in Salem County, NJ. In 

September 2015, the NRC issued its final safety evaluation 

report (FSER) for the PSEG ESP application, completing 

the safety review for this application. In addition, the 

NRC continued to prepare for the review of the Tennessee 

Valley Authority (TVA) ESP application for the Clinch 

River site. As part of this preparation, the NRC held preapplication meetings with TVA to discuss technical and 

policy topics and completed a pre-application readiness 

assessment and an emergency planning site visit.

Combined Licenses

A COL authorizes construction and operation of a 

nuclear power plant, through the 10 CFR Part 52 licensing 

process. The application for a COL is one option to 

receive a license; the other is through the conventional 

process used since the 1960s, 10 CFR Part 50, “Domestic 

Licensing of Production and Utilization Facilities,” 

which provides a construction permit followed by an 

operating license. The COL application must include 

the inspections, tests, analyses, and acceptance criteria 

(ITAAC) that are necessary prior to plant operation to 

ensure that the plant has been properly constructed and 

will operate safely.

During FY 2015, the NRC supported the safe construction 

at the Vogtle and V.C. Summer COL sites by issuing 

16 license amendments with six exemptions for Vogtle, 

Units 3 and 4, and issuing 16 license amendments with 

seven exemptions for V.C. Summer, Units 2 and 3. 

The NRC also continued its review of eight COL 

applications to build and operate new reactors at sites 

throughout the United States, including Bell Bend, Calvert 

Cliffs, Fermi, Levy County, North Anna, South Texas 

Project (STP), Turkey Point, and Lee Station. At the end 

of FY 2015, the NRC was reviewing six remaining COL 

applications.

In FY 2015, the NRC issued the FSER for the Fermi Unit 3 

COL application and concluded its mandatory hearing. 

The NRC issued the COL to DTE Electric Company 

on May 1, 2015. This was the first COL issued for an 

application referencing the ESBWR design. The agency 

also issued the FSER for the South Texas Project, Units 

3 and 4, COL. During FY 2015, the NRC published the 

draft environmental impact statements for the Turkey 

Point, Units 6 and 7, and the Bell Bend COL applications. 

In June 2015, UniStar Nuclear Energy (UNE) requested 

withdrawal of its COL application for Calvert Cliffs 

Nuclear Power Plant, Unit 3. The review of this 

application was under suspension based on a previous 

request by UNE in February 2015. In July 2015, the 

NRC accepted UNE’s withdrawal request and published 

the notice of withdrawal of the COL application in the 

Federal Register.

Figure 15 – Locations of New Nuclear Power 

Reactor Applications

Construction Permits and Operating

Licenses

The NRC has continued the extensive inspection and 

licensing efforts associated with the reactivation of 

the TVA Watts Bar, Unit 2, nuclear power plant. The 

agency issued a construction permit for this unit in 1973; 

however, construction was suspended in 1985. Watts Bar, 

Unit 1, received a full-power operating license in early 

1996 and is presently the most recent power reactor to 

be licensed under 10 CFR Part 50 in the United States. 
C h a p t e r 2 n Program Performance

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In August 2007, TVA informed the NRC of its plan to 

resume construction of Watts Bar, Unit 2. In FY 2011, 

the NRC continued its review of the operating license 

application for Unit 2, which TVA updated in March 2009, 

and assigned dedicated resident inspectors to monitor 

TVA’s construction activities. The NRC is continuing its 

safety review. The current schedule calls for the NRC to 

complete its review efforts in calendar year (CY) 2015, 

with inspection activities continuing into FY 2016 

(startup testing).

Small Modular Reactors

The NRC continued to prepare for future review of the 

NuScale Power small modular reactor (SMR) design 

and licensing application, including development of the 

regulatory framework to support reviews of this new 

design and extensive outreach to external stakeholders. 

As part of this preparation, the NRC published for public 

comment draft sections of the design specific review 

standard (DSRS) for the NuScale design. The NuScale 

DSRS Scope and Safety Review Matrix provides ADAMS 

Accession Nos. for draft DSRS sections that are designspecific to NuScale, identifies which Standard Review Plan 

(SRP) sections will be used for the NuScale design review, 

and identifies which SRP sections are not applicable to the 

NuScale design. The matrix is available through ADAMS, 

accessible through the agency’s Web site at http://www.

NRC.gov/reading-rm/adams.html, by searching for 

Accession No. ML15156B063. In addition, the NRC 

held pre-application meetings on technical and policy 

topics associated with the NuScale design to develop an 

understanding on how major issues could be resolved 

prior to the application submittal.

In FY 2015, the NRC staff issued SECY-15-0077, “Options 

for Emergency Preparedness for Small Modular Reactors 

and Other New Technologies.” The purpose of this 

paper was to seek Commission approval of the staff ’s 

recommendation to initiate a rulemaking to revise 

regulations and guidance for emergency preparedness for 

SMRs and other new technologies, such as non light water 

reactors (non-LWRs) and medical isotope production 

facilities. In a Staff Requirements Memorandum to 

SECY-2015-0077, the Commission approved the staff ’s 

recommendation to initiate a rulemaking to revise 

regulations and guidance for emergency preparedness 

for SMRs, non-light water reactors, and other new 

technologies. 

Advanced Non-light Water Reactors

During FY 2015, the NRC continued to take strategic 

steps to prepare for future non-LWR applications, 

and have collaborated with DOE, industry standards 

organizations like the American Nuclear Society, and with 

the Generation IV International Forum. The development 

of a regulatory framework tailored to advanced reactors 

will increase the efficiency and effectiveness of the NRC’s 

regulatory process. In addition, the NRC and DOE 

have engaged in a joint initiative to develop general 

design criteria for advanced non-light water reactors. A 

workshop was held on September 1–2, 2015 to explore 

steps the NRC, DOE, and industry could take to facilitate 

development and deployment of innovative reactor 

technologies focused on safety, timeliness, and costeffectiveness. 

New Reactors Oversight

Construction Inspection

The NRC continues to inspect construction of the four 

AP1000 units at the Vogtle and Summer sites and for 

Watts Bar, Unit 2. In FY 2015, AP1000 construction 

activities were focused on the structural modules and 

concrete pours.

The agency also completed construction and preoperational testing inspections at Watts Bar, Unit 2. 

Some of the significant activities included an Operational 

Readiness Assessment Team inspection and hot 

functional testing (HFT) inspections. HFT is a series of 

tests, some of which are conducted at normal operating 

pressure and temperature conditions, that demonstrate 

that systems can meet their specified design safety 

functions to control primary pressure and temperature.

In FY 2015, the agency received and processed 32 

ITAAC closure notifications. The NRC continues to 

refine the processes and guidance for ITAAC closure, 

including facilitating several public workshops to solicit 
C h a p t e r 2 n Program Performance

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input, exchange views, and reach consensus on issues 

such as the early submittal of uncompleted ITAAC 

closure notifications. The agency also issued in July 2015 

Revision 2 of Regulatory Guide 1.215, “Guidance for 

ITAAC Closure under 10 CFR Part 52,” which updated the 

guidance for the ITAAC closure process based on lessons 

learned and industry outreach.

Vendor Inspection

The NRC continued implementation of the Vendor 

Inspection Program, including conducting 39 vendor or 

quality assurance implementation inspections in FY 2015 

to support both new and existing reactor licenses. A 

majority of the inspections were related to ITAAC for the 

AP1000 or were specific to commercial grade dedication. 

All inspections focused on the design, qualification, and 

testing of safety-related structures, systems, components 

and services, and the findings were reported in areas 

of inadequate design control and commercial grade 

dedication.

Investigations and Enforcement

Consistent with the description for investigations and 

enforcement of operating reactors, the NRC will not 

permit applicants for new licenses, nor their contractors 

and vendors, to continue to conduct licensed activities if 

they cannot achieve and maintain adequate levels of safety. 

In FY 2015, the NRC processed one escalated enforcement 

action, which was supported through an investigation. 

On April 20, 2015, the NRC issued a notice of violation 

and proposed imposition of civil penalty in the amount of 

$11,200 to the Chicago Bridge & Iron Company (CB&I) 

based on a Severity Level (SL) II problem involving 

deliberate misconduct on the part of CB&I officials and 

employees related to a dropped module incident. A 

notice of violation was also issued to a CB&I official for 

deliberate misconduct.

New Reactors Rulemaking

In FY 2015, the NRC published for public comment the 

draft regulatory basis for the “Financial Qualifications 

Requirements for Reactor Licensing” rulemaking. The 

draft regulatory basis explains, in part, why the existing 

regulations should be updated, estimates the cost, and 

provides other impacts of the potential changes. If 

approved, the rule would amend the current financial 

qualification requirements of “reasonable assurance” 

under 10 CFR Part 50 to conform to the 10 CFR Part 70, 

“Domestic Licensing of Special Nuclear Material,” review 

standard of “appears to be financially qualified.” The draft 

regulatory basis is available on the Federal Government’s 

regulations Web site at http://www.regulations.gov by 

searching for docket number NRC 2014‐0161. 

The NRC published an advanced notice of proposed 

rulemaking to obtain input from stakeholders on 

the development of a regulatory basis for the NRC’s 

regulations governing radioactive effluents from nuclear 

power plants. The regulatory basis would support 

potential changes to better align the NRC regulations 

governing dose assessments for radioactive effluents from 

nuclear power plant operations with the most recent 

terminology and dose-related methodology published by 

the International Commission on Radiological Protection 

(ICRP) contained in the ICRP Publication 103, “The 2007 

Recommendations for International Commission on 

Radiological Protection,” (2007). 

The NRC published in the Federal Register for public 

comment 47 sections of the NUREG-0800, “Standard 

Review Plan for the Review of Safety Analysis Reports for 

Nuclear Power Plants: LWR Edition” during FY 2015. An 

annual total of 54 Interim Staff Guidance documents and 

Standard Review Plan sections were published, 14 sections 

above the annual metric.

New Reactors Research

Much of the technical work and research described 

earlier for operating reactors applies to new reactors 

as well. Over the past several years, the NRC has 

focused its new reactor regulatory research 

efforts on potential new light-water reactor 

facilities to prepare for and evaluate standard 

design certifications. The NRC research program 

addressed key areas that support the agency’s 

safety mission. Some of the more important issues 

addressed include the following: 

•	 assessment of digital systems, including hazard 

analysis and failure mode effects analysis.
C h a p t e r 2 n Program Performance

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•	 development of advanced tools for probabilistic 

risk assessment activities that support riskinformed regulatory decisionmaking, and 

seismic and structural research.

•	 research on hazards from natural events, 

including seismic hazard issues, flooding, and 

tsunami events.

•	 thermal-hydraulic research and analysis.

•	 severe accident and consequence research and 

analysis.

•	 radiation protection research.

•	 human reliability analysis research.

Research related to small modular reactor (SMR) 

concepts focuses on identifying phenomenological 

differences from large reactors and developing and 

validating tools for analyses to support potential 

licensing reviews.

In FY 2015, the NRC completed the following 

research: 

•	 initial thermal-hydraulic model to be used 

to support containment and severe accident 

confirmatory analyses related to the Advanced 

Power Reactor 1400.

•	 phenomena identification and ranking effort for an 

SMR design.

•	 initial updates to computer models used for 

confirmations of estimated concentrations of toxic 

gases in certain postulated accidents.

•	 updates to human factors guidance.

•	 improvements to PRA models on new reactors that 

will be used to support agency post-construction 

inspection oversight efforts at those sites.

•	 regulatory guidance related to closure of ITAAC.

•	 hazard analysis of digital safety systems for SMRs.

•	 evaluation of seismic structural regulations and 

regulatory guidance for SMRs.

In FY 2015, the NRC issued NUREG/CR-7196, 

“Large- Scale Earthquake Simulation of a Hybrid Lead 

Rubber Isolation System Designed with Consideration 

of Nuclear Seismicity.” Seismic isolation systems can 

decouple structures from their foundations to protect 

them from the effects of earthquake ground motions. 

The study performed large-scale testing of isolation 

systems to confirm their behavior for a wide range of 

seismic ground motions as well as to assess analysis 

tools, models and modeling assumptions. The results 

of this study can be used by the NRC to develop, 

design, and review guidance for seismic isolation 

systems for nuclear power plants. 

Nuclear Materials and 

Waste Safety

Effective October 5, 2014, the NRC reorganized its 

materials and waste programs by merging the Office 

of Federal and State Materials and Environmental 

Management Programs and the Office of Nuclear Material 

Safety and Safeguards. The new office retained the name 

of the Office of Nuclear Material Safety and Safeguards 

(or NMSS), an office established by Congress when it 

created the NRC in 1974. The merger reflects changes in 

the NRC’s materials and waste management workload and 

an effort to integrate regulatory activities of the front and 

back ends of the nuclear fuel cycle, as well as to reduce 

costs and improve efficiency.

The following narrative describes major activities and 

accomplishments under the Nuclear Materials and Waste 

Safety business lines that contributed to achieving the 

strategic goal for ensuring the safe use of radioactive 

materials. 

Fuel Facilities

The NRC licenses and inspects all commercial nuclear fuel 

facilities that process and fabricate uranium concentrates 

into the reactor fuel that powers the Nation’s nuclear 

reactors. Licensing activities include detailed health, 

safety, safeguards, and environmental evaluations. 

Oversight involves reviews of licensee programs, 

procedures, operations, and facilities to ensure safe and 

secure operations.

The operating level priorities for the Fuel Facilities 

business line during FY 2015 were as follows:

1. Ensure safety and security through effective oversight 

of operating fuel facilities and facilities under 
C h a p t e r 2 n Program Performance

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construction, and through effective management 

of licensing actions, including Section 106 Tribal 

Consultations, environmental reviews and other 

regulatory activities.

2. Support U.S. non-proliferation activities through 

implementation of international safeguards and 

domestic material control and accounting.

3. Maintain effective communications with stakeholders 

on staff approaches to emergent issues, rulemaking, 

guidance development, and other regulatory activities.

Licensing and Oversight

The NRC issued a confirmatory order to GE-Vallecitos 

to enhance physical security and material control 

and accounting and accepted the license renewal 

application for review. This confirmatory order resolved 

a longstanding issue on implementing appropriate site 

security documentation.

The NRC completed its environmental and safety reviews 

and approved an amendment for Louisiana Energy 

Services to expand its gas centrifuge uranium enrichment 

plant from an annual production rate of 3.7 million 

separative work units (SWU) to 10 million SWU. The 

amendment also increases the possession limits for 

natural, depleted, and enriched uranium. 

The NRC closed the Nuclear Fuel Services (NFS) 

confirmatory action letter, dated March 2013, related to 

the NFS material control and accounting program and 

inventory differences within the control limits of the 

license. 

The NRC issued an order to Shaw AREVA MOX 

Services extending the construction authorization from 

March 30, 2015, to March 30, 2025. 

On June 26, 2015, the NRC issued the second revision 

of NUREG-1520, “Standard Review Plan for Fuel Cycle 

Facilities License Applications.” NUREG-1520 provides 

guidance to NRC staff members who perform safety and 

environmental impact reviews of applications to construct 

or modify and operate nuclear fuel cycle facilities.

The NRC issued Generic Letter 2015-01, “Treatment of 

Natural Phenomena Hazards in Fuel Cycle Facilities.” 

The NRC also issued Interim Staff Guidance (ISG) 

FCSE-ISG-15, “Natural Phenomena Hazards in Fuel Cycle 

Facilities,” to provide additional guidance for evaluating 

events that may result from natural phenomena hazards. 

The NRC issued its “Fuel Cycle Oversight Process” 

cornerstone technical basis document for public 

comment.

The NRC issued draft “Guidance for the Evaluation 

of Acute Chemical Exposures and the Proposed 

Quantitative Standards,” for public comment and held 

an implementation workshop with stakeholders on 

March 4, 2015. 

Figure 16 – Locations of Fuel Cycle Facilities

During FY 2015, the NRC issued NUREG/CR-7168, 

“Regulatory Approaches for Addressing Reprocessing 

Facility Risks: An Assessment.” This report addressed 

methods for assessing the risks posed by a reprocessing 

facility, which have not previously been quantified relative 

to other fuel-cycle facilities. Reprocessing facilities can 

have higher potential source terms than other fuel cycle 

facilities, which heighten the risk relative to the other 

facilities. 
C h a p t e r 2 n Program Performance

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In FY 2015, the NRC performed special inspections at 

Honeywell to review an unplanned uranium hexafluoride 

leak and declaration of an Alert at the site, and at BWX 

Technologies to review failure of double contingency 

requirements for nuclear criticality safety.

Investigation and Enforcement

The NRC will not permit licensees to conduct licensed 

activities if they cannot achieve and maintain adequate 

levels of safety. In FY 2015, the NRC processed two 

escalated enforcement actions associated with fuel 

facilities. On March 11, 2015, the NRC issued a 

confirmatory order to Honeywell International, Inc. 

(Honeywell), to formalize commitments made as a 

result of an alternative dispute mediation session held on 

December 9, 2014. An investigation, dated May 15, 2014, 

conducted by the Office of Investigations determined that 

an employee of a Honeywell contractor was terminated 

on June 15, 2012, in part, for engaging in a protected 

activity. Terminating an employee for engaging in a 

protected activity is a violation of 10 CFR 40.7, “Employee 

Protection.”

Event Response

The NRC successfully planned, executed, and evaluated 

an exercise with URENCO-USA in November 2014. The 

exercise involved responses from various NRC program 

offices and Region II.

Nuclear Materials Users

The operating level priorities for Nuclear Materials Users 

business line in FY 2015 were as follows:

1. Oversight and implementation of materials licensing 

and inspection activities. 

2. Agreement State Program oversight and enhancements 

to Integrated Materials Performance Evaluation 

Program (IMPEP) guidance.

3. Source security initiatives through the implementation 

of 10 CFR Part 37 and the recommendations of the 

Radiation Source Protection and Security Task Force.

4. Implement Integrated Source Management Portfolio 

(ISMP) 10-year plan and continue investment 

protection.

5. Rulemaking activities including the development of 

the final Part 35 rule and guidance and evaluation of 

comments collected on the Part 20 advanced notice of 

proposed rulemaking.

6. Develop Tribal Program initiatives that support 

implementation of the Tribal Policy Statement.

Licensing

The NRC licenses and inspects the commercial use of 

nuclear materials for industrial, medical, and academic 

purposes. Commercial uses of nuclear materials include 

medical diagnosis and therapy, medical and biological 

research, academic training and research, industrial 

gauging and nondestructive testing, production of 

radiopharmaceuticals, and fabrication of commercial 

products (such as smoke detectors) and other radioactive 

sealed sources and devices. The agency currently 

regulates about 2,800 specific licensees for the use of 

radioactive materials. Under the NRC’s Agreement State 

program, 37 States have assumed regulatory responsibility 

for approximately 18,000 licenses for the industrial, 

medical, and other users of nuclear materials in their 

States. The agency reviews Agreement State programs as 

well as certain NRC licensing and inspection programs 

through the Integrated Materials Performance Evaluation 

Program.

Detailed health and safety reviews of license applications, 

as well as inspections of licensee procedures, operations, 

and facilities, provide reasonable assurance of safe 

operations and the production of safe products. The NRC 

routinely inspects nuclear materials licensees to ensure 

that they are using nuclear materials safely, maintaining 

accountability of those materials, and protecting public 

health and safety. The agency also analyzes operational 

experience from the NRC and Agreement State licensees 

and regularly evaluates the safety significance of events 

reported by licensees and Agreement States. 

Oversight

The NRC will not permit licensees to conduct licensed 

activities if they cannot achieve and maintain adequate levels 

of safety. The NRC conducted over 800 nuclear materials 
C h a p t e r 2 n Program Performance

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licensing inspections with significant safety findings 

associated with nuclear materials licenses during FY 2015. 

These resulted in the issuance of notices of violation to three 

licensees. The agency also performed reactive inspections as 

follow-up to six medical events occurring in four States, the 

District of Columbia, and Puerto Rico. 

During FY 2015, the NRC performed a special inspection to 

provide oversight of the removal, transport and final disposal 

of ten U.S. Air Force owned Radioisotope Thermoelectric 

Generators containing a total of 440,000 curies of 

strontium-90 sealed sources, from Burnt Mountain, AK, 

to a disposal site in Nevada. This project concluded nearly 

two decades of interactions with the licensee to complete 

environmental impact assessments, finalize transportation 

and disposal logistics, and obtain regulatory approvals from 

State and Federal agencies. 

In FY 2015, the NRC coordinated and conducted training 

on Inspection Procedure 87132 for brachytherapy programs. 

This training was made available by video and teleconference 

for NRC and Agreement State employees to participate. 

The agency published a revision to Inspection Procedure (IP) 

87121, “Industrial Radiography Programs.” These changes 

to the IP reflect revisions to close out recommendations by 

the OIG. 

Investigation and Enforcement

Compliance with NRC requirements plays an important 

role in giving the agency confidence that safety is being 

maintained not only for operating reactors but for all 

areas that the agency regulates. NRC policies deter 

noncompliance and encourage prompt identification 

and timely, comprehensive corrective actions. Willful 

violations are of particular concern. Licensees, 

contractors, and their employees who do not achieve 

the high standard of compliance expected by the NRC 

are subject to enforcement sanctions. Each enforcement 

action depends on the circumstances of the case. The 

NRC will not permit licensees to continue to conduct 

licensed activities if they cannot achieve and maintain 

adequate levels of safety.

The agency imposed escalated enforcement for six 

licensees. Of particular note was a case that involved 

the issuance of a confirmatory order stemming from 

alternative dispute resolution2

. The NRC initiated a 

reactive inspection related to the potential improper 

handling, processing, and sale of radioactive materials 

on e-Bay. The initial onsite portion of the inspection 

identified improperly used and processed uranium and 

other radioactive materials resulting in contamination 

of a residential location in Boise, ID. This incident 

involved extensive coordination with the State of Idaho, 

the U.S. Environmental Protection Agency, DOE, and law 

enforcement agencies. 

The NRC issued a confirmatory order to a cardiologist/

radiation safety officer prohibiting the individual from 

performing the duties and functions of a radiation safety 

officer for his license or for any other NRC radioactive 

materials license until the individual meets certain 

requirements spelled out in the order. This resulted 

from a history of poor performance from the licensee 

and a determination that the root cause was inadequate 

oversight by the licensee principal who was also listed as 

the radiation safety officer. 

In FY 2015, the agency issued five notices of violation to 

Howard University, Howard University Hospital, Ronan 

Engineering, Monongalia General Hospital, and NRD, 

LLC (which included a civil penalty). 

Event Response

The NRC successfully planned, executed, and evaluated 

several materials scenarios during a tabletop exercise in 

March 2015. The materials tabletop exercise resulted in 

the identification of potential gaps and enhancements to 

the agency’s response to materials events. 

The NRC responded to a materials event involving a 

radiation overexposure of a licensee employee during a 

source handling/transfer operation involving a cobalt-60 

source. Based on a reenactment of the event, the licensee 

2

The NRC’s alternative dispute resolution process is described at http://www.nrc.

gov/about-nrc/regulatory/enforcement/adr.html
C h a p t e r 2 n Program Performance

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estimated that the technician might have received a 

significant whole body and extremity dose, depending 

upon various assumptions. A Special Team Inspection 

was chartered to review the circumstances surrounding 

the incident, including an independent review of dose 

calculations and a root cause analysis. 

Rulemaking and Policy

Development

In FY 2015, the NRC published the direct final rule 

for 10 CFR Part 70 related to reportable safety events 

involving special nuclear materials. The agency also 

issued a proposed revision to the Commission’s policy 

statement for reporting AOs to Congress, “Proposed 

Revisions to Policy Statement on Reporting Abnormal 

Occurrences Criteria.” This proposed revision to 

the Commission’s policy statement would enhance 

consistency with the NRC’s current guidance, regulations, 

and strategic plan. 

State and Tribal Programs

In FY 2015, the NRC issued an enhanced report 

template for use to improve quality and consistency of 

Integrated Materials Performance Evaluation Program 

reports. In addition, the agency performed Integrated 

Materials Performance Evaluation Programs reviews, 

and corresponding Management Review Boards, for the 

Commonwealth of Virginia, the State of Florida, State 

of Maine, State of New Jersey, State of North Dakota, 

the NRC’s Region I materials program, and the NRC’s 

sealed source and device evaluation program. The NRC 

determined that the programs were adequate to protect 

public health and safety.

A consolidated Agreement State policy statement was 

submitted for Commission consideration that included 

recommendations for developing a more comprehensive 

approach to assessing Agreement State compatibility 

and improving the Integrated Materials Performance 

Evaluation Program.

Figure 17 – Agreement States

During FY 2015, the NRC published the draft Tribal 

policy statement for public comment in the Federal 

Register and revised the Tribal Protocol Manual. The 

agency completed Tribal outreach and information 

exchanges at the Wind River Reservation Tribal College, 

Wyoming (October 28–29, 2014); Tsaile, Arizona (January 

13–14); Bismarck, North Dakota (February 10–11); and 

Crownpoint, New Mexico (March 10–11). The comment 

period ended June 1, 2015. 

The NRC completed the transfer of 57 sealed source and 

device registration certificates from the State of Georgia 

on February 10, 2015, ahead of the planned March 2015 

completion date. 

In FY 2015, Wisconsin became the second Agreement 

State to implement Web-Based Licensing (WBL) for their 

licensing and inspection program using the NRC hosted 

WBL. The State fully implemented WBL in July 2015. 

Spent Fuel Storage and 

Transportation

The NRC conducts detailed technical reviews to 

ensure that storage, transportation, and domestic and 

international shipments of spent nuclear fuel and other 

risk-significant radioactive materials are safe and secure 

and comply with agency regulations. The NRC closely 
C h a p t e r 2 n Program Performance

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coordinates transportation-related activities with those 

of DOT and, as appropriate, DOE. The NRC inspects 

vendors, fabricators, and licensees that build and use 

storage systems and transportation packages. The NRC 

also inspects independent spent fuel storage installations 

(ISFSI) both at and away from reactor sites. 

The operating level priorities for the Spent Fuel Storage 

and Transportation business line in FY 2015 were as 

follows:

1. Continue effective oversight of licensed facilities.

2. Continue effective processing of licensing actions.

3. Identify technical and administrative issues and 

determine effective solutions.

4. Maintain focus on establishing firm technical bases 

for intermediate and long-term waste management 

framework to support future licensing actions and the 

evolving national policy. 

Licensing and Oversight

In FY 2015, the agency completed the inspection of 

construction activities for the first-of-its-kind Holtec 

HI-STORM Underground Maximum Capacity Canister 

Storage System (UMAX) located at the Callaway Plant. 

The inspection consisted of observations of various 

evolutions of construction of the 20‐foot (6-meters) 

underground ISFSI over a period of 8 months. 

The NRC issued the Calvert Cliffs independent spent 

fuel storage installation (ISFSI) license renewal in 

October 2014. This renewal involved a first-of-a-kind 

approach that was developed in concert with extensive 

stakeholder interactions. 

Figure 18 – Ensuring Safe Spent Fuel Shipping 

Containers

The NRC completed review and approval of the Model 

No. M-290 spent fuel transportation package for the 

DOE Office of Naval Reactors during FY 2015. With an 

authorized weight of 520,000 pounds (235,868 kilograms), 

this package represented the heaviest of any certificate of 

compliance (CoC) the NRC has issued. The package will 

be shipped by rail to support future movements of the 

Navy’s spent fuel. 

The agency also issued a CoC approving high-enriched 

uranyl nitrate liquid (HEUNL) contents in the NAC, 

International legal weight truck (LWT) transportation 

package. This was a complex review and approval of 

a transportation package that is designed to support 

the return of the HEUNL material to DOE’s Savannah 

River site to support the National Nuclear Security 

Administration’s (NNSA’s) Global Threat Reduction 

Initiative. 

The NRC issued approval of West Valley Melter Package 

(WVMP), the first package in almost 10 years to be 

approved under 10 CFR 71.41(d). This was the first 

package approved under the new harmonized DOT 

regulations, therefore, not requiring a DOT special permit 

for use. 

The agency completed an inspection at Limerick, Unit 1, 

following a significant drain-down of a dry shielded 

canister, which resulted in the top of the fuel assemblies 

being exposed to a helium/air mixture and higher than 

expected dose rates at the top of the canister. The NRC 

review of the licensee’s evaluation determined there 

was reasonable assurance that the fuel cladding was not 

damaged. 

As part of the development of the revised renewal 

guidance framework, the NRC issued Draft NUREG-1927, 

Revision 1, SRP for Renewal of Specific Licenses and 

CoCs for Dry Storage of Spent Nuclear Fuel for public 

comment on July 7, 2015

The NRC also completed pre-operational inspections and 

initial loading campaign inspections at the Holtec UMAX 

underground ISFSI at Callaway.
C h a p t e r 2 n Program Performance

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Rulemaking

The NRC completed and published several rulemaking 

actions to add new spent fuel storage casks to the list 

of approved designs and requested comments on a 

stakeholder petition to revise 10 CFR Part 37, “Physical 

Protection of Category 1 and Category 2 Quantities of 

Radioactive Material.” 

During FY 2015, the NRC published several rulemakings 

for CoCs. The final rule for Transnuclear NUHOMS, CoC 

No. 1029, Amendment 3, took effect February 23, 2015. 

The final rule addressing public comments for the new 

HI–STORM UMAX, CoC No. 1040, took effect on 

April 6, 2015, supporting loading at the Callaway Nuclear 

Station later in 2015. Additionally, the final rule for NAC 

MAGNASTOR, CoC No. 1031, Amendment 4, took 

effect April 14, 2015, and Amendment 5 of this same CoC 

took effect June 29, 2015. The final rule for Holtec HISTORM, CoC 1032, Amendment 1, Revision 1, took effect 

June 2, 2015. 

The agency also completed the review of NEI 14-03, “Dry 

Cask Storage License Renewal Industry Guidance for 

Operations-Based Aging Management,” and provided 

direct feedback to NEI through a letter and a follow-on 

public meeting. 

The NRC completed a defense-in-depth risk framework, 

part of the initiative to risk-inform 10 CFR Part 72

activities, and presented the framework at a public 

meeting. The agency issued Information Notice 2015-03, 

“Improper Operation of Spent Fuel Transfer Cask Neutron 

Shield Equipment Leading to Elevated Radiation Levels 

Adjacent to Spent Fuel Transfer Cask” (ADAMS Accession 

No. ML14213A477), regarding neutron shield operations 

of spent fuel transfer casks to all 10 CFR Part 72 specific 

and general licensees and certificate holders. It also issued 

a NUREG on the first phase of an initiative to develop 

a BWR burnup credit analysis in anticipation of future 

applications that take credit for BWR fuel burnup.

On June 12, 2015, the NRC published the final rule 

language containing amendments to 10 CFR Part 71, 

“Packaging and Transportation of Radioactive Material,” 

in the Federal Register. These amendments make 

conforming changes to the NRC’s regulations based 

on the International Atomic Energy Agency’s (IAEA’s) 

2009 standards for the international transportation of 

radioactive material and maintain consistency with the 

DOT’s regulations. The rule took effect July 13, 2015, to 

coincide with the compliance date of DOT’s final rule. 

Decommissioning and Low-Level 

Waste

The operating level priorities for the Decommissioning 

and Low-Level Waste business line during FY 2015 were 

as follows:

1. Maintain oversight activities at unique, complex, and 

high-risk-activity decommissioning sites.

2. Continue to focus on optimizing available resources 

for licensing and inspection activities (especially, 

uranium recovery).

3. Continue efforts to complete high priority rulemaking 

(10 CFR Part 61/Sight Specific Analysis).

4. Continue to support DOE on waste incidental to 

reprocessing (WIR) activities.

Decommissioning removes radioactive contamination 

from buildings, equipment, ground water, and soil and 

achieves levels that permit the release of the property 

while protecting the public. The NRC terminates the 

licenses for decommissioned facilities after the licensees 

demonstrate that the residual onsite radioactivity is 

within regulatory limits and is sufficiently low to protect 

the health and safety of the public and the environment. 

Completing decommissioning, environmental, and 

performance assessment activities provides assurance that 

residual radioactivity does not pose an unacceptable risk 

to the public. 

Low-level radioactive waste includes items that are 

contaminated with radioactive material or have become 

radioactive through exposure to neutron radiation. 

Although the NRC regulates low-level waste (LLW) 

disposal, currently all commercial LLW disposal sites in 
C h a p t e r 2 n Program Performance

57

the United States are in Agreement States. The NRC’s 

LLW regulatory program includes the following activities: 

•	 coordinating with, and providing technical assistance 

to, Agreement States on LLW issues.

•	representing the NRC in international waste 

management activities.

•	 consulting with Federal and State officials, Indian 

Tribes, and other entities to promote understanding of 

LLW issues and resolve concerns in a timely manner. 

Under the WIR program, per Section 3116 of the Ronald 

W. Reagan National Defense Authorization Act for 2005 

(NDAA), DOE consults with the NRC on incidental 

waste determinations in a covered State (Idaho and South 

Carolina). If the DOE Secretary’s final determination is that 

the waste is WIR, then the NRC monitors DOE disposal 

actions in coordination with the covered State by assessing 

the DOE disposal actions to determine compliance with 

the performance objectives in 10 CFR Part 61, “Licensing 

Requirements for Land Disposal of Radioactive Waste.” 

The NRC completed expected NDAA consultation with 

DOE at Idaho and South Carolina. 

Uranium recovery (UR), the processing of uranium ore, is 

also regulated under the Decommissioning and Low-Level 

Waste business line. The NRC ensures that UR facilities 

are licensed, operated, decommissioned, and monitored 

to protect the public and environment. This consists of 

oversight, inspection, and licensing of operating facilities; 

licensing of new sites or expansion of existing sites 

through license amendments; and the management of 

legacy sites in decommissioning or long‐term care.

Licensing and Oversight

In FY 2015, the NRC issued a subsequent order to Waste 

Control Specialists (WCS) (“Supersede Exemption for 

Waste Control Specialists, LLC; Andrews Texas”). The 

previous order exempted WCS from the NRC’s regulations 

concerning special nuclear material (SNM). The 

subsequent order was issued in response to a July 2014 

request in which WCS requested an exemption from NRC 

regulations to possess SNM in excess of the critical mass 

limits specified in 10 CFR 150.11, “Critical Mass,” while 

temporarily storing specific waste at a different location at 

the WCS facility than the previously approved location. 

The agency terminated the license for the Army facility 

at Walter Reed Medical Center after a thorough review 

of survey and other documentation for the release of 

facilities for unrestricted use. This included significant 

coordination to conclude that the current radiological 

conditions met the NRC criteria for unrestricted use. In 

addition, the agency terminated the research and test 

reactor license for the Worcester Polytechnic Institute, in 

Worcester, Massachusetts and the University of Michigan 

in Ann Arbor, Michigan. 

The agency approved the decommissioning plan for 

the U.S. Department of Veterans Affairs in Omaha, NE, 

to ensure the effectiveness and efficiency of licensing 

activities to maintain both quality and timeliness. 

The NRC supported the U.S. Department of Justice in 

negotiating and signing a new forbearance agreement with 

Fansteel/FMRI. Fansteel/FMRI has been in bankruptcy 

proceedings. The forbearance agreement will allow 

certain specified remediation work to continue at the site 

while the legal issues surrounding the bankruptcy are 

resolved.

In FY 2015, oversight of the Kewanuee, San Onofre 

Units 2 and 3, and Crystal River Unit 3, nuclear power 

plants was transferred from operating reactor oversight to 

decommissioning status. Oversight of 18 power reactors 

undergoing decommissioning, including 7 under active 

decommissioning, continued during 2015.

The NRC approved completion of AAR Manufacturing 

Inc. (AAR) remediation activities. AAR has a long 

history: initial license in1957, license termination in 

1971 (the license was never reinstated), reevaluation by 

NRC in 1994, remediation work conducted in 2000, and 

2007. After consideration of possible restricted release 

of a portion of the site, further extensive soil remediation 

was completed in 2014 rendering the site acceptable for 

unrestricted release. 

In FY 2015, the agency issued a license renewal to 

Crow Butte Resources Inc., allowing it to operate an in 
C h a p t e r 2 n Program Performance

58

Waste Storage

As documented in the safety evaluation report, the staff 

concluded that it could not recommend authorization 

of construction at this time, because DOE has not met 

certain land and water rights requirements and it has not 

yet completed a supplement to its environmental impact 

statement (EIS). A final licensing decision, should funds 

beyond those available be appropriated, could come 

only after completion of a supplemental EIS, hearings on 

contentions in the adjudication, and Commission review. 

On March 12, 2015, the NRC announced that it would use 

a portion of its remaining funds to prepare a supplement 

to DOE’s EIS that will address repository-related effects 

on ground water and surface discharges of ground water. 

In August, the NRC released the draft environmental 

impact statement supplement. After considering public 

comments received on the draft, the staff will revise 

the supplement, as appropriate, before issuing a final 

supplement in early 2016.

Ensure the secure use of 2 radioactive materials

strategic goal

STRATEGIC OBJECTIVES

The strategic objectives for Goal 2 are:

Ensure protection of nuclear facilities and 

radioactive materials.

situ uranium recovery facility in Crawford, NE, for an 

additional 10 years. This involved two major uranium 

recovery adjudicatory hearings for Crow Butte license 

renewal and Dewey Burdock licensing.

rulemaking

The NRC issued the proposed 10 CFR Part 61 rule and 

guidance document for a 120‐day comment period to 

enhance the regulatory framework in a risk-informed and 

performance-based manner. The rule described licensing 

requirements for land disposal of radioactive waste. 

The agency issued the Draft NUREG 2126, “Standard 

Review Plan for Conventional Uranium Mills and 

Heap Leach Facilities,” for public comment on 

December 18, 2014. It also issued the Revised Branch 

Technical Position on Concentration Averaging and 

Encapsulation. This updated guidance provided 

acceptable methods that can be used to perform 

concentration averaging of LLW for determining its waste 

class for disposal. 

In FY 2015, the agency issued SECY 15-0094, “Historical 

and Current Issues Related to Disposal of GreaterThan-Class-C (GTCC) Low-Level Radioactive Waste.” 

The paper provided the Commission with a historical 

perspective on disposal of GTCC low-level radioactive 

waste in which the staff identifies pathways for licensing 

the disposal of GTCC waste.

High-Level Waste

Between October 2014 and January 2015, the agency 

released the final four volumes of the Yucca Mountain 

safety evaluation report, completing the technical safety 

review of DOE’s application. Volume 2 covers repository 

safety before permanent closure, Volume 3 covers the 

period after a repository at Yucca Mountain would be 

permanently closed, Volume 4 covers administrative 

and programmatic requirements for the repository, and 

Volume 5 covers proposed conditions on the construction 

authorization, probable subjects of license specifications, 

and the staff ’s overall conclusions.
C h a p t e r 2 n Program Performance

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Protecting nuclear facilities and radioactive materials 

are key elements 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 classified 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. 

Classified information at the NRC and at the facilities 

it regulates is primarily of two types. National security 

information is classified by an Executive order, the 

compromise of which could cause some degree of damage 

to the national security. Restricted data is information 

classified by the Atomic Energy Act, the compromise 

of which could assist in the design, manufacture, or 

use of nuclear weapons. SGI is a special category of 

sensitive unclassified information concerning the physical 

protection of operating power reactors, spent fuel 

shipments, strategic special nuclear material, or other 

radioactive material. 

The strategic objectives specify the conditions that must be 

met for the agency to ensure the secure use of radioactive 

materials. 

In FY 2015, the NRC demonstrated that it achieved 

the two security strategic objectives by meeting the 

performance indicators listed below. Because the agency 

is required to report on performance information for 

the previous 5 fiscal years, Table 4 shows the agency’s 

annual Security performance indicators and results for 

FYs 2010–2014. Prior indicators 1-4 address the first 

security objective. Indicator 5 addresses the second 

security objective.

Security Objective 1: Ensure protection of nuclear 

facilities and radioactive materials.

Performance Goal 1: Prevent sabotage, theft, diversion, or 

loss of risk‐significant quantities of radioactive material.

Performance Indicator: Number of instances of 

sabotage, theft, diversion, or loss of risk‐significant 

quantities of radioactive material that meet or exceed 

AO criteria I.C.1 (unrecovered lost, stolen, or abandoned 

sources), I.C.2 (substantiated case of actual theft or 

diversion), or the portion of criterion I.C.3 (subtantiated 

loss of a formula quantity) concerning theft or diversion 

of special nuclear material.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: 0 Actual: 0 

Discussion: This indicator tracks the agency’s effectiveness 

at preventing sabotage, theft, diversion, or loss of risksignificant qualities of radioactive material through 

tracking any loss or theft of radioactive nuclear sources 

that the NRC has determined to be of significant risk. The 

indicator tracks the agency’s performance in ensuring the 

proper accounting for radioactive sources of significant 

risk that could be used for malicious purposes. It also 

tracks whether NRC-licensed facilities maintain adequate 

protective capabilities to prevent theft or diversion 

of nuclear material or sabotage that could result in 

substantial harm to the public health and safety, tracks 

whether special nuclear material is accounted for, and 

verifies that formula-quantity losses of this material do 

not occur. The indicator also tracks whether the systems 

in place at NRC-licensed facilities maintain accurate 

inventories of the special nuclear material (SNM) that the 

facilities process, use, or store. No such incidents took 

place during FY 2015.

Performance Goal 2: Prevent substantial breakdowns of 

physical security, cyber security, or material control and 

accountability.
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Performance Indicator: Number of substantial 

breakdowns of physical security, cyber security, or 

material control and accountability that meet or exceed 

a revised version of AO criterion I.C.4 (substantial 

breakdown in physical security or materials control) that 

will include breakdowns of cyber security and the portion 

of AO criterion I.C.3 concerning breakdowns of the 

accountability system for special nuclear material.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: ≤1 Actual: 0 

Discussion: This indicator tracks the agency’s effectiveness 

in maintaining security through tracking any breakdowns 

in access control, containment, or accountability systems 

that significantly weakened the protection against 

theft, diversion, or sabotage for nuclear materials that 

the agency has determined to be of significant risk. In 

FY 2015, there were no incidents of this nature.

Security Objective 2: Ensure protection of classified and 

Safeguards Information.

Performance Goal 3: Prevent significant unauthorized 

disclosures of classified or SGI.

Performance Indicator: Number of significant 

unauthorized disclosures of classified or Safeguards 

Information by licensees as defined by AO criterion I.C.5 

and by NRC employees or contractors as defined by 

analogous NRC internal criteria.

Timeframe: Annual

Business Line FY 2015

All Business Lines Target: 0 Actual: 0 

Discussion: This indicator includes significant 

unauthorized disclosures of classified or Safeguards 

Information that cause damage to national security or 

public safety. This indicator tracks whether information 

that can harm national security (classified information) 

or cause damage to the public health and safety (SGI) has 

been stored and used in ways as to prevent its disclosure 

to the public, terrorist organizations, other nations, 

or personnel without a need to know. No significant 

unauthorized disclosures occurred in FY 2015.
C h a p t e r 2 n Program Performance

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Table 4 – FY 2010-2014 Performance Indicators Results

Goal – Security: Ensure secure use of radioactive materials

1. Unrecovered Losses of Risk Significant* Radioactive Sources

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 1** 0 0 0

* “Risk-significant” is defined as any unrecovered, lost, or abandoned sources that exceed the values listed in Appendix P, “Category 1 and 2 Radioactive Material,” 

to 10 CFR Part 110, “Export and Import of Nuclear Equipment and 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 in 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 that 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) a source for which the agency has made a determination 

that its risk significance is low based on its location (e.g., water depth) or its physical characteristics (e.g., half life and housing) and its surroundings, (6) cases 

in which all reasonable efforts have been made to recover the source, and (7) the determination was made that the source is not recoverable and will not be 

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

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

2. Number of Substantiated* Cases of Actual Theft or Diversion of Licensed, Risk Significant Radioactive Sources, or 

Formula Quantities** of Special Nuclear Material or Attacks That Result in Radiological Sabotage***

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 0 0 0 0

*“Substantiated” means a situation in which an indication of loss, theft, or unlawful diversion, such as an allegation of diversion, report of lost or stolen material, 

statistical processing difference, or other indication of loss of material control or accountability cannot be refuted following an investigation and requires further 

action on the part of the agency or other proper authorities. 

**A formula quantity of special nuclear material is defined in 10 CFR

***”Radiological sabotage” is defined in 10 CFR 23.2, “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 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 1

Actual 0 0 0 0 0

4.Number of Substantial Breakdowns* 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 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target ≤ 1 ≤ 1 ≤ 1 ≤ 1 ≤ 1 Replaced by Security 

Performance Goal 2

Actual 0 0 0 0 0

*A “substantial breakdown” is defined as a red finding in the security cornerstone of the ROP or any plant or facility that is determined either to 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 or operational events.

5. Number of Significant Unauthorized Disclosures* of Classified and/or Safeguards Information

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Target 0 0 0 0 0 Replaced by Security 

Performance Goal 3

Actual 0 0 0 0 0

*“Significant unauthorized disclosure” is defined as a disclosure that harms national security or public health or safety
C h a p t e r 2 n Program Performance

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Nuclear Reactor Security

The NRC continues to maintain an appropriate regulatory 

infrastructure and perform its licensing and oversight 

functions to ensure protection of public health and 

safety, promote the common defense and security, and 

protect the environment. NRC security and emergency 

preparedness programs contribute to fulfilling this 

mission.

The following narrative describes major activities and 

accomplishments under the Nuclear Reactor Safety 

business lines that contributed to achieving the strategic 

goal for ensuring the secure use of radioactive materials. 

The NRC conducts a robust security inspection program 

within the security cornerstone of the agency’s ROP. The 

security cornerstone focuses on five key attributes of 

licensee performance: 

1.Access authorization.

2.Access control.

3.Physical protection systems.

4.Material control and accounting.

5.Response to contingency events.

Through the results obtained from all oversight activities, 

including baseline security inspections and performance 

indicators, the agency determines whether licensees 

comply with NRC requirements and can provide high 

assurance of adequate protection against the design‐basis 

threat for radiological sabotage.

The NRC carries out force-on-force inspections at 

commercial operating nuclear power plants and 

Category I fuel facilities at least once every 3 years as 

part of its comprehensive security program. The agency 

uses these inspections to evaluate the effectiveness of 

security programs to prevent radiological sabotage and 

theft or diversion of Category I material. Force-onforce inspections assess the ability of nuclear facilities to 

defend against the applicable design‐basis threat, which 

characterizes the adversary against which licensees must 

design appropriate defenses, such as physical protection 

systems and response strategies. A force-on-force 

inspection includes tabletop drills and simulated combat 

between a mock commando-type adversary force and 

the site security force. During the attack, the adversary 

force attempts to reach and simulate damaging key safety 

systems and components at a nuclear power plant or 

simulate theft of material at a Category I fuel facility. 

Integrated and Coordinated Security

Activities

The Integrated Response Program (IRP) is a partnership 

between the Federal Government (NRC, Federal Bureau 

of Investigation (FBI), and DHS) and the nuclear power 

plant industry. It seeks to establish or leverage existing 

tactical law enforcement capabilities to respond to 

significant threats at a nuclear power plant effectively. 

One aspect of the IRP is the Contingency Response Tool 

(CRT), which is a computer-aided planning tool to assist 

tactical law enforcement in navigation and response 

planning inside nuclear power plants.

Cyber Security

The NRC has developed an oversight program for 

cybersecurity that includes an inspection program, 

inspector training, and a process for evaluating 

the significance of inspection findings. This was 

accomplished collaboratively with stakeholders, including 

members of industry and representatives from the DHS, 

the Federal Energy Regulatory Commission, and NIST. 

The NRC has begun inspecting activities related to the 

interim milestones and will complete these inspections in 

calendar year 2015.

During FY 2015, senior leaders from independent 

and executive branch regulatory agencies launched 

the interagency Cybersecurity Forum. Led by the 

NRC Chairman, the forum’s objectives are to enhance 

communication, share lessons learned, and develop 

a common understanding of cybersecurity activities 

through the sharing of best practices and exploring 

approaches to enhance cybersecurity protections. The 

officials established areas of initial discussion that 

included lessons learned with regulation‐based and 

voluntary approaches to cybersecurity, proactive cyber 

risk assessment, and management and information 

sharing.
C h a p t e r 2 n Program Performance

63

The agency completed, and the Commission approved, 

the final rulemaking package for the Cyber Security Event 

Notification Rule. The package was sent to the Office of 

Management and Budget in July 2015, for review prior to 

publication. This rule would make generally applicable 

certain voluntary reporting activities associated with 

cyber-security events contained in security advisories. 

The rule also would establish new cyber security event 

notifications that would contribute to the NRC’s analysis 

of the reliability and effectiveness of licensees’ cyber 

security programs, and played an important role in 

the continuing effort to ensure digital computer and 

communication systems and networks are protected 

adequately against cyber attacks, up to and including the 

Design Basis Threat. 

The agency also engaged industry to inform and endorse 

guidance to facilitate a consequence‐based, graded 

approach to implementing cyber security programs. 

The NRC is following a cyber security roadmap 

(SECY‐12‐0088, “The Nuclear Regulatory Commission 

Cyber Security Roadmap”) to evaluate the need for 

cyber-security requirements for non‐power reactors, 

independent spent fuel storage installations, and 

byproduct materials licensees. Implementation of the 

roadmap will help ensure that appropriate cyber-security 

actions are carried out promptly and efficiently at all 

NRC‐licensed facilities. Also, implementation of the 

roadmap will identify whether, or to what extent, the 

program needs to be improved.

Nuclear Materials and Waste 

Security

The following narrative describes major activities and 

accomplishments under the Nuclear Materials and Waste 

Safety business lines that contributed to achieving the 

strategic goal for ensuring the secure use of radioactive 

materials. 

Fuel Facilities

On December 30, 2014, the NRC staff submitted a 

proposal to the Commission, SECY-14-0147, “Cyber 

Security for Fuel Cycle Facilities,” which provides options 

and a recommendation for strengthening cyber security 

at fuel cycle facilities. The Commission disapproved an 

order, but approved the proposal to develop requirements 

via rulemaking on March 24, 2015. The agency developed 

the cyber security regulatory basis and provided it to 

stakeholders in early September. 

The NRC developed a path forward to take appropriate 

enforcement actions on the Louisiana Energy Services 

information security issue during FY 2015. On 

May 19, the agency issued a confirmatory order to GEVallecitos to address physical security and material 

control and accounting and accepted the license renewal 

application for review. This confirmatory order resolved 

a longstanding issue on implementing appropriate site 

security documentation. 

On September 4, 2015, the NRC published the draft 

regulatory basis related to cyber security for fuel cycle 

facilities rulemaking.

Nuclear Materials Users

During FY 2015, the NRC completed critical source 

security actions such as the 2015 National Source Tracking 

System (NSTS) Annual Inventory Reconciliation. 

NSTS inventories were sent to roughly 1,400 NRC and 

Agreement State licensees to confirm information about 

approximently 80,000 Category 1 and Category 2 sources. 

The Radiation Source Protection and Security Task Force 

biennial Implementation Plan was submitted to the 

Commission in January 2015 and is available on the NRC 

public Web site. 

The NRC published the direct final rule for Safeguards 

Information—Modified Handling during FY 2015. 

This rule removes the requirement for specific 

materials licensees to handle security information as 

Safeguards Information - Modified Handling and rather 

implements the requirements for handling information 

under 10 CFR Part 37.

The NRC coordinated an interagency threat brief for 

the Radiation Source Protection and Security Task 

Force. This threat brief, provided by the FBI, was held 

at the NRC Headquarters in June 2015 for all task force 
C h a p t e r 2 n Program Performance

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members, including the Organization of Agreement 

States, to provide a common understanding of the threat 

environment regarding Category 1 and Category 2 

quantities of radioactive materials in support of a 2018 

report. 

Spent Fuel Storage and

Transportation

The NRC completed a multiagency memorandum 

of understanding (MOU) on radioactive material 

transportation security. This MOU serves as the 

foundation for cooperation in the establishment of 

a comprehensive and consistent transport security 

program for risk‐significant sources. All parties had 

signed the MOU (i.e., the NRC, DOT, and DHS) as of 

January 17, 2015. 

CROSS-CUTTING STRATEGIES

The NRC has two crosscutting strategies: Regulatory 

Effectiveness and Openness, which support the fulfillment 

of the Safety and Security Objectives. 

REGULATORY EFFECTIVENESS

The effort to improve performance in government, 

coupled with increased demands on the NRC’s resources, 

requires the agency to become more effective, efficient, 

and timely in its regulatory activities. The NRC’s 

effectiveness initiatives sharpen the agency’s focus on 

safety and security and ensure that its available resources 

are optimally directed toward accomplishing the agency’s 

mission. 

In late January 2015, the NRC staff sent to the 

Commission its Project Aim 2020 report detailing staff 

recommendations designed to improve the agency’s 

agility, effectiveness, and efficiency while ensuring its 

ability to protect the public health and safety. The Project 

Aim 2020 report recommended a number of strategies 

under the themes of people, planning, and process 

to prepare the NRC for the future. The staff ’s report 

proposed that the NRC could function more efficiently by 

performing the following: 

•	Right-sizing the agency to retain appropriate skill sets 

needed to accomplish its mission.

•	 Streamlining agency processes to use resources more 

wisely.

•	Improving timeliness in regulatory decision-making 

and responding quickly to changing conditions.

•	Promoting unity of purpose with clearer agencywide 

priorities.

On June 8, 2015, the Commission approved many of 

the recommendations presented in the staff ’s report. 

Key among the items included in its Staff Requirements 

Memorandum, the Commission directed the staff to 

undertake a “re-baselining” effort to make the agency 

more efficient. This effort will review the agency 

workload, which has evolved over the past decade, and 

develop a list of tasks that could be shed as no longer 

needed or justified, or able to be performed at a reduced 

resource level. The Commission also approved a staff 

utilization target of 3,600 employees by September 30, 

2016, but deferred setting a 2020 target until after the rebaselining review is completed.

A wide range of implementation activities are currently 

underway and are being tracked as 19 discrete tasks.  

In FY 2015, staff completed two of the 19 tasks, with 

substantial progress on four additional tasks.

In addition, the agency has continued implementation of 

the changes identified in a 2011 comprehensive review 

of NRC overhead functions—(e.g.,  administrative 

services, human capital, financial management (including 

contract management), information management (IM), 

and information technology (IT))—to identify effective, 

efficient, and cost conscious business solutions and 

eliminate duplicative processes and functions.

Beyond these agencywide efforts, the agency has 

undertaken a number of other improvements in various 

program areas: 

•	The agency has undertaken six initiatives in the 

operating reactors business line to be better positioned 

as an efficient and effective regulator, using riskinformed principles while improving how the agency 

sets expectations, obtains alignment, makes timely 

decisions, and implements the agency’s plans. The 

agency implemented these initiatives in the first quarter 

of FY 2015, and they will continue into FY 2016. 
C h a p t e r 2 n Program Performance

65

As a result of these efforts, the agency has already 

made progress in reducing the licensing backlog and 

anticipates further progress by the end of CY 2015.

•	The construction Reactor Oversight Process (cROP) 

CY 2014 self-assessment, issued on May 1, 2015, 

concluded that it met its program goals and the 

agency’s strategic goals of ensuring safety and security 

through objective, risk-informed, understandable, and 

predictable oversight. All 11 performance metrics met 

predetermined criteria. The one out-of-standard metric 

identified in CY 2013 was met in 2014, demonstrating 

that the corrective action implemented was successful. 

•	The Vendor Inspection Program’s FY 2014 selfassessment, issued on December 18, 2014, concluded 

that the program met its goals. Ten of 11 program 

performance metrics met the predetermined criteria, 

and the agency identified corrective actions for the one 

that was not met. Both of the out-of-standard metrics 

identified in 2013 were met in 2014, demonstrating 

that the corrective actions implemented last year were 

successful.

•	The agency established an approach for addressing 

mitigation of beyond-design-basis events for new 

reactor applicants for DCs, COLs, and other licenses 

and permits in FY 2015. The agency also issued the 

following documents:

1. NUREG/CR-7193, “Evaluations of NRC SeismicStructural Regulations and Regulatory Guidance, 

and Simulation-Evaluation Tools for Applicability to 

Small Modular Reactors (SMRs),” which assessed the 

regulatory guidance in the seismic structural area. 

2. Research Information Letter–1101, “Technical Basis 

to Review Hazard Analysis of Digital Safety Systems,” 

which supports the Office of New Reactors (NRO) 

reviews of applicant hazard analysis and NRO 

development of the Design Specific Review Standard 

for the mPower SMR.

3. Phase 1 of User Need NRO-2011-007, “Improve and 

Benchmark the Control Room Habitability Package 

Code and Assess the Areal Locations of Hazardous 

Atmospheres Codes for Control Room Habitability,” 

by re-hosting the Habit Code in a Windows‐based 

environment. 

•	The NRC issued office instruction NRO-REG-104, 

“Pre-application Readiness Assessment,” to provide 

expectations for implementation of the safety preapplication readiness of a draft application before 

being submitted for a formal licensing or certification 

review. The pre‐application readiness assessment will 

allow the identification of information gaps between 

the draft application and the technical content expected 

to be included in the final application submitted to 

the NRC, identify major technical or policy issues 

that may adversely impact the docketing or technical 

review of the application, and become familiar with 

the application, particularly in areas where prospective 

applicants are proposing new concepts or novel design 

features. 

•	In response to the “New Reactor Licensing Process 

Lessons Learned Review: 10 CFR Part 52 Report,” 

dated April 2013, the NRC issued a revision to office 

instruction NRO-REG-100, “Acceptance Review 

Process for Early Site Permit, Design Certification, 

and Combined License Applications.” The revision 

changed the standard for accepting an application from 

enough information to “begin” the review to enough 

information to “conduct” the review and added criteria 

to support the new standard for acceptance. 

OPENNESS

The openness objective explicitly recognizes that the 

public must be informed about, and have a reasonable 

opportunity to participate in, the NRC’s regulatory 

processes. The NRC is firmly committed to transparency, 

participation, and collaboration as key principles 

governing the agency’s relationship with the public and 

other stakeholders. The agency has demonstrated its 

commitment to these openness principles through its 

longstanding efforts to keep stakeholders informed and 

involved in the NRC’s regulatory process. 

The annual Regulatory Information Conference (RIC) 

is a significant event that the agency holds to provide 

an opportunity for attendees to discuss issues related to 

the safety and security of commercial nuclear facilities 

and current regulatory activities. Over 2,700 people 
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attended the 2015 RIC, which was held on March 10-12, 

2015, including industry executives, representatives from 

state governments, non-governmental organizations, 

individual community members, and representatives from 

dozens of foreign countries. Notable sessions from the 

2015 RIC included “Implementation of Lessons Learned 

from the Fukushima Dai-ichi Accident (an international 

panel discussion)” and “Regulatory Agility in the New 

Millennium.” Other technical sessions addressed 

significant domestic and international issues associated 

with nuclear safety and security, reactor decommissioning, 

public participation in the regulatory process, spent 

fuel storage, and new reactor licensing. In addition, the 

agency set up tables during the conference to demonstrate 

improved search capability in ADAMS to allow greater 

access to agency information. The demonstration was 

highly attended, received positive feedback, and aided in 

informing both internal staff and external stakeholders on 

system use and current and future records management 

activities

public meetings

The agency holds over 1,000 public meetings every year to 

engage and inform the public about the NRC’s regulatory 

activities. The purpose of the majority of these meetings 

is for the NRC to meet with licensees, applicants, or 

other groups. These meetings are conducted in an open 

manner to increase the transparency of the NRC’s actions, 

and time is set aside for members of the public to ask 

questions of the NRC staff. For other public meetings, the 

NRC is seeking to interact directly with members of the 

public to inform and educate them on regulatory topics, 

or, in certain cases, to take public comments. 

In the spirit of continual improvement, the agency 

assembled a task group beginning in June 2014 

to complete a comprehensive review of its public 

meeting policies, processes, and guidance to identify 

potential improvements. The task group produced a 

set of recommendations in January 2015. The agency 

is currently in the process of implementing select 

recommendations by revising the existing public meeting 

policy and guidance as well as drafting new guidance.

2015 RIC Technical Session

In September 2015, the agency supported the National 

Association of Employee Concerns Professionals 

conferences, including presentations on evaluating 

chilling effect concerns, allegation trends, and safety 

culture. This forum was widely attended by NRC licensees 

and certificate holders, NEI, industry vendors and 

consultants, concerned individuals and their advocates, 

and representatives from the Department of Labor and 

DOE to share best practices and lessons learned regarding 

the handling of employee concerns. The NRC participants 

provided perspectives on the agency’s Allegations 

Program, Safety Conscious Work Environment, and 

Safety Culture policies.

Several of the more notable meetings the agency held 

during FY 2015 are described below. 

Nuclear Reactor Safety

•	The agency held several public meetings during FY 2015 

regarding the decommissioning of plants at four sites 

(Kewaunee, Crystal River, San Onofre, and Vermont 

Yankee) to keep the public informed of plans, changes 

to security, and emergency planning requirements, and 

to solicit public feedback and input. 

•	The NRC issued the annual report for the New 

Reactor Program (NUREG/ BR-0476) highlighting the 

significant accomplishments and goals of the program 

and the status of its activities. 
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•	On September 1–2, 2015, the NRC and DOE held a 

joint workshop on advanced non-light water reactors 

to explore what steps could be taken by the NRC, DOE, 

and industry to facilitate development and deployment 

of innovative reactor technologies focused on safety, 

timeliness, and cost-effectiveness.

Nuclear Materials and Waste Safety

•	The NRC held a public meeting and a Governmentto-Government Meeting in Brattleboro, VT, on the 

Vermont Yankee post-shutdown decommissioning 

activities report (PSDAR) on February 19, 2015. The 

purpose of these meetings was to share information 

with external stakeholders about the decommissioning 

process, including the status of the licensee’s efforts and 

the anticipated decommissioning schedule. 

•	The NRC held a public meeting in Carlsbad, CA, 

on October 27, 2015, to discuss the submittal of the 

PSDAR by the San Onofre Nuclear Generating Station. 

The agency presented information and answered 

questions from the public related to inspection activities 

for reactor decommissioning and spent fuel storage. 

•	The NRC led an international discussion of approaches 

to management of LLW at the 2015 NRC Regulatory 

Information Conference to enhance regulatory 

programs using lessons learned from domestic and 

international operating experience. In addition, the 

agency conducted a series of public outreach meetings 

to answer clarifying questions on the proposed 

10 CFR Part 61 rule, “Licensing Requirements for 

Land Disposal and Radioactive Waste,” to facilitate 

understanding and meaningful comments by external 

stakeholders, given the multiple changes involved. 

•	The NRC held a public meeting in FY 2015 on 

the defense-in-depth framework, as part of the 

risk‐informing framework for 10 CFR Part 72 activities 

and its review of NEI 14-03: “Dry Cask Storage 

License Renewal Industry Guidance for OperationsBased Aging Management.” The NRC also held 

two public meetings on the proposed changes in 

draft NUREG-1927, Rev. 1, “Standard Review Plan 

for Renewal of Specific Licenses and Certificates of 

Compliance for Dry Storage of Spent Nuclear Fuel,” 

and the proposed changes to the position of fuel 

irretrievability for storage under 10 CFR Part 72. 

•	The agency held a public meeting with Spectrum 

Pharmaceuticals, Inc., related to proposed training 

and experience requirements in the 10 CFR Part 35, 

“Medical Use of Byproduct Material,” proposed rule. 

•	The NRC held an implementation workshop with 

stakeholders on March 4, 2015, regarding the draft 

guidance for the evaluation of acute chemical exposures 

and proposed quantitative standards. The agency held 

an implementation workshop with stakeholders on 

March 5, 2015, about the Interim Staff Guidance on 

treatment of natural phenomena. 

• The agency developed the final Report to Congress 

on the Status of the Gaseous Diffusion Plants, and the 

Commission approved it on September 25, 2015. 

additional examples

In addition to public meetings, the agency completed 

several other efforts to support openness during FY 

2015. 

•	The NRC issued the annual report for the New 

Reactor Program (NUREG/ BR-0476) highlighting the 

significant accomplishments and goals of the program 

and the status of its activities. 

•	To increase the openness and transparency of its 

rulemaking process to the public, the NRC launched 

a new public Web page, “Rulemaking Priorities,” on 

June 30, 2015. This Web page provides information 

about the NRC’s common prioritization of rulemaking 

process and lists each active rulemaking activity for the 

current planning period. 

•	The NRC held a webinar on the basics of dry spent fuel 

storage for State Liaison Officers (individuals designated 

by State Governors to serve as their main-points-of 

contact to the NRC) and their staff. A total of 60 people 

from a variety of States participated in the event.

•	The NRC organized and hosted a seminar with the 

Onondaga Nation, a federally recognized tribe, at NRC 

Headquarters. Onondaga tribal speakers provided 

information on Tribal history, culture, and concerns 

about radioactive material.
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•	The NRC continued to leverage social media as part of 

its strategy to support openness and transparency. The 

NRC blog remains the centerpiece of the agency’s social 

media program with more than 580 posts viewed nearly 

720,000 times. In 2015, the NRC’s Facebook page 

marked its 1-year anniversary and reached a milestone 

2,000 “likes.” In addition, the NRC piloted live 

tweeting during the 2015 RIC. Finally, to demonstrate 

its understanding of the need for openness and 

transparency during a crisis situation, the NRC focused 

on social media communications during the large-scale 

2015 Southern Exposure exercise in South Carolina. 

•	The agency received its 13th consecutive Certificate 

of Excellence in Accountability Reporting from the 

Association of Government Accountants (AGA) for its 

FY 2014 Performance and Accountability Report. The 

report was also recognized as Best in Class for having 

the “most comprehensive schedule of spending.” 

MANAGEMENT OBJECTIVES

This section focuses on the activities related to the key 

management objectives of human capital and information 

management and IT. Other management objectives 

include acquisitions, space and facilities management, and 

financial management and financial stewardship.

Management Objective 1: People: Attract, develop, and 

retain a high-performing, diverse, and engaged workforce 

with the skills needed to adapt to workload changes and 

effectively carry out the NRC’s mission now and in the 

future.

Performance Goal: Sustain scores reflecting healthy 

organizational engagement, training and development, 

and leadership on the Safety Culture and Climate 

Survey (SCCS) and rate competitively against external 

benchmarks.

Performance Indicator: Safety Culture and Climate scores 

in the Sustained Engagement Index, as well as indices 

reflecting Training and Development and Leadership 

(comprising Senior Management, Office/Region 

Management, and Management categories).

Timeframe: Data will be available in FY 2016 and every 

3 years thereafter

Business Line FY 2015

Corporate Support Target: Sustain scores; 

perform above at 

least 2 of 3 external 

benchmarks used in the 

SCCS Report

Actual: NA 

(data available 

in FY 2016)

Performance Goal: Sustain average scores and ratings 

in the OPM indices on the Federal Employee Viewpoint 

Survey (FEVS).3

Performance Indicator: Average scores in the OPM 

indices on the FEVS

Timeframe: Annual

Business Line FY 2015

Corporate Support Target: Top 5 rating 

against other Federal 

agencies

Actual: 4

Performance Goal: Meet a specified percentage of key 

human capital indicators.

Performance Indicator: Percent of key human capital 

indicators met.4

Timeframe: Annual

Business Line FY 2015

Corporate Support Target: Meet 75 

percent of key human 

capital indicators

Actual: 75

Management Objective 2: Information Management 

and IT: Make it easier for NRC staff members to perform 

their mission and obtain the information they need from 

authoritative sources anytime, anywhere, on any device, 

while managing the risk of compromise of sensitive 

information.

3

Examples are Global Satisfaction and Employee Engagement Indices, as well as support 

for diversity.

4

Examples include retention of professional hires within 3 years, FEVS 

participation, percent of veterans and employees with targeted disabilities 

hired, percent of attrition, iLearn user satisfaction, and percent of participants 

completing development programs.
C h a p t e r 2 n Program Performance

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Performance Goal: Achieve target for aggregate score on 

agency-specific questions addressing information and IT 

on the annual FEVS survey.

Performance Indicator: Score on agency-specific 

questions addressing information and information 

technology on the annual FEVS

Timeframe: Annual

Business Line FY 2015

Corporate Support Target: Set baseline in 

FY 2014 and determine 

target for 2015 and 

beyond

Actual: (Results will 

not be available until 

December 2015)

HUMAN CAPITAL

The operating level priorities for Human Resources 

Management in FY 2015 were as follows:

1.Ensure there is a solid infrastructure in place to support 

all agency functions.

2.Enhance knowledge of managers and staff to provide 

high-quality service and advice to stakeholders. 

Communicate such services to maximize their benefits.

3.Increase knowledge of NRC supervisors to ensure they 

have the information to successfully perform their 

supervisory duties.

4.Agency hiring goals are met and positions are filled to 

meet the needs of the agency in a timely manner.

5.Develop, enhance, and implement human resources 

policies and programs such that they contribute to the 

NRC’s accomplishment of its goals and attracting and 

retaining engaged employees.

Human Resources Management

The agency is implementing strategies to right-size while 

retaining appropriate skill sets to accomplish its mission 

and to address the agency’s ability to respond quickly to 

changing industry and workload conditions in the future. 

Towards achieving this goal, the agency is focusing efforts 

on re-baselining and strategic workforce planning to 

ensure there is a firm understanding of what skills and 

capabilities exist, where gaps exist, and the best ways 

to close those gaps through external hiring or internal 

mobility. 

During FY 2015, the agency supported executive resource 

management by responding to the Office of Personnel 

Management’s (OPM) biennial review request regarding 

the NRC’s Senior Executive Service (SES) allocation needs 

for FY 2016 and FY 2017. The agency also successfully 

obtained OPM Qualifications Review Board certification 

for several new executives competitively selected for SES 

positons and graduates of the SES Candidate Development 

Program. In addition, the NRC started a new SES 

Candidate Development Program class in June 2015 to 

meet present and future executive resources staffing needs. 

The NRC continues its strong commitment to work 

life and benefit programs, which support creating a 

flexible and supportive environment for employees, 

maximizes organizational performance, and maintains an 

exceptionally engaged workforce. Programs such as the 

Employee Wellness Program, the Employee Assistance 

Program, alternative work flexibilities, and telework allow 

employees to balance work and personal or family lives. 

These factors have contributed to the NRC continuing 

to be one of the best places to work in the Federal 

Government based on Federal Employee Viewpoint 

Survey (FEVS) data.

The agency also hosted the agency Annual Veterans Day 

Recognition Program to show the agency’s appreciation 

for the tremendous personal sacrifice that our Nation’s 

veterans have made, and hosted a presentation for 

all supervisors on the Operation Warfighter Federal 

internship program for recovering military service 

members. As a result of the increased emphasis on 

the hiring of veterans and disabled veterans, the NRC 

exceeded its FY 2015 established hiring goals. In FY 2015, 

the agency attended 49 recruitment events of which 14 

focused on individuals with disabilities including disabled 

veterans, and has hired a total of 63 veterans and 22 

disabled veterans, which represents 26.6 percent and 9.3 

percent of all NRC hires respectively.

Employee Engagement

According to the Federal Human Capital Survey results, 

specifically the FY 2014 FEVS, OPM placed the NRC in 

the top three of 37 Federal departments and agencies in 

the Employee Engagement Index. The agency was in the 

top four in each of the four Human Capital Assessment 
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and Accountability Framework indices (Leadership and 

Knowledge Management, Results-Oriented Performance 

Culture, Talent Management, and Job Satisfaction) 

covered by the survey. The agency was also ranked fourth 

with regard to the survey’s measure of Global Satisfaction 

and third on the New Inclusion Quotient.

The success of the agency depends on the talent and 

commitment of agency employees, and an engaged 

workforce is key to agency performance. In FY 2015, the 

NRC developed and implemented both agency-wide and 

Office/Region specific action plans to continue to improve 

the NRC work environment. The agency-wide action 

plan focused on improving leadership while continuing to 

build on activities to improve in the areas of performance 

management, employee development, valuing human 

differences, and environment for raising concerns. 

Training and Development

The FEVS results over the last 5 years show that the 

agency has remained consistent in scores for sharing 

job knowledge at 82%. Knowledge Management (KM) 

remains a top priority for the agency. The 2014 – 2018 

NRC Strategic Plan outlines KM as one of the six key 

contributing human capital strategies. A number of 

practices are implemented at every level of the agency 

to ensure critical knowledge is identified and captured 

from employees, transferred to those who need it, 

and made accessible for the future. The month of 

November, marketed as KNOWvember, is dedicated to 

acknowledging the agency’s KM successes and provides an 

opportunity to enhance awareness and remind employees 

about the importance of KM. 

As part of this effort, the agency conducted a KM Best 

Practice Showcase featuring 20 different best practices 

with participation from eight offices. The 2-day showcase 

reached staff agency-wide to facilitate information sharing 

on various KM strategies, activities, programs, and 

software applications being used around the agency to 

capture, share, and transfer knowledge and information. 

In addition, throughout the year the NRC held learning 

sessions by subject matter experts on mission critical 

topics. These sessions were recorded and will be made 

available to the workforce on-demand, increasing the 

opportunity for staff to access them while reducing the 

cost of conducting such training.

The agency is adapting its training and development 

programs to meet the changing needs of the agency as 

a result of the critical skills and competencies identified 

through the strategic workforce planning. Illustrative 

of this is the agency’s recent effort to gather information 

on requested training and associated skills. The NRC 

continues to focus on a competency-based approach to 

training, ensuring alignment between employees’ learning 

experiences and the agency’s mission. Training and 

development programs are designed to shorten the time 

to competency. The NRC’s learning and development 

programs continue to evolve to support the needs of 

the next generation of regulatory experts. The agency 

is continuing development of an initiative to accelerate 

the transformation of the learning environment from 

an instructor-led environment to an on-line or blended 

delivery environment. This initiative focuses on the 

needs of the learner and is geared to providing the right 

information at the right time for individual staff members. 

By using these approaches, the NRC ensures effective 

training with the added benefits of a reduction in costs 

and schedule convenience for the learner.

During FY 2015, the NRC maintained its commitment to 

ensure a pipeline of highly qualified staff to fill supervisory 

and executive positions.  To support these efforts, the 

agency established a leadership competency model to 

support the development of leadership skills at all levels.  

In addition, the NRC launched the non-competitive 

Aspiring Leaders Certificate Program (ALCP) to focus 

on building leadership competencies in non-supervisory 

GG 13 – 15 staff. The ALCP served as a precursor to 

the NRC’s Leadership Potential Program, which is a 

competitive leadership development program for nonsupervisors.  The agency continued to offer courses to 

ensure that new supervisors receive the OPM-required 

supervisory training.  
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Outreach

The operating level priorities for Outreach in FY 2015 

were as follows:

1.Continued focus on activities to ensure successful 

implementation of the management of the civil rights 

program, affirmative employment and diversity 

management program, outreach and compliance 

coordination program, and the small business program. 

2.Continue effective administration of the minority 

serving institution (MSI) grants program and the 

Minority Serving Institutions Program to assist in 

efforts to develop a diverse skilled workforce to benefit 

the NRC, the industry, and nation.

3.More effectively explore and access the small business 

marketplace. Demonstrate leadership, teaming and 

support in achieving the agency’s small business goals. 

4.Effectively manage the equal employment opportunity 

complaints process in compliance with Equal 

Employment Opportunity Commission regulations to 

promptly address alleged discrimination, harassment, 

and retaliation in the workplace.

5.Continue to provide guidance and technical assistance 

in developing and executing strategies in support of the 

agency’s Comprehensive Diversity Management Plan. 

The Small Business Program’s collaborative efforts with 

its internal and external partners resulted in the agency 

exceeding three out of five of its small business prime 

contract goals. This included the award of $19.5 million 

out of $73.8 million to small businesses. The agency’s 

outreach events included presentations on how to conduct 

business with the NRC, small business counseling 

to companies, and contract connection sessions that 

matched business capabilities with agency requirements.

The Affirmative Employment & Diversity Management 

Program enhanced awareness of diversity and inclusion 

initiatives through activities and partnerships during 

FY 2015. These included the Commission briefing on 

equal opportunity and diversity at the NRC, establishment 

of the Veterans Employee Resource Group, a celebration 

of Native American Heritage Month, an NRC Veterans’ 

Day celebration, and presentations on diversity and 

inclusion during agency refresher courses for managers 

and supervisors. The program also held celebration 

dinners for African American History Month, and 

Women’s History Month and the agency hosted selected 

students from Gallaudet University. 

The Outreach & Compliance Coordination Program 

completed resolution of stakeholder comments on draft 

Management Directive (MD) 10.164, “NRC Outreach and 

Compliance Coordination Program,” and the Directive 

Handbook. This MD and other compliance directives and 

manuals play an important role by providing regulatory 

oversight and promoting nondiscrimination in NRCconducted and Federal financial assistance programs and 

activities. 

During FY 2015, the Civil Rights Program initiated five 

informal complaints and filed seven formal complaints. 

The agency filed one request for a hearing and settled one 

case. One prior dismissal was affirmed upon appeal to the 

Equal Employment Opportunity Commission.

The Outreach and Compliance Coordination Program 

facilitated a roundtable discussion between the NRC and 

U.S. Environmental Protection Agency staff related to 

Tribal outreach and training in and around New Mexico, 

and participated in the Tribal Policy Working Group of 

the Office of Nuclear Material Safety and Safeguards to 

complete the task assigned by the Executive Director for 

Operation related to the review of office guidance and 

procedures. 

Information Management and

Information Technology

The operating level priorities for Information 

Management and Information Technology in FY 2015 

were as follows:

1.Improve the business value of the NRC’s IT solutions 

by providing automated processes, IT solutions, and 

mobile capabilities.

2.Better enable the NRC staff and stakeholders to easily 

find and use the information they need.
C h a p t e r 2 n Program Performance

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3.Improve the accessibility, delivery, and utility of the 

services needed by stakeholders

4.Provide the infrastructure to deliver consistent solutions 

to meet stakeholder needs

5.Maximize IT/IM resources by practicing IT portfolio 

management, planning, and best practices.

6.Implement an effective cybersecurity program for 

protection of the NRC’s information technology assets 

and identification of attempts at compromise.

The agency has made great strides towards compliance 

with records management statutes and regulations and 

the Presidential Memorandum for Managing Government 

Records (M-12-18). The agency completed several 

priority projects during FY 2015 such as digitization of all 

Headquarters and Region III records for active dockets. 

The agency also developed business requirements and 

began assessing technical solutions for email management.

To enhance the user experience and improve employee 

productivity, the NRC upgraded and enhanced its 

telecommunications and internet services. The agency 

also upgraded infrastructure components in all regional 

offices and headquarters buildings. 

In accordance with the Federal Data Center Consolidation 

Initiative (FDCCI), the NRC closed two non-core data 

centers in FY 2015. In addition, a private cloud was 

implemented in the NRC’s core data center, which 

provided a virtualized/standardized hosting environment 

for agency business applications.

The NRC issued standards, processes, and templates 

providing consistent security practices, reducing system 

lifecycle costs, improving overall functionality, enabling 

agility, and addressing risk and security posture. The 

agency also developed and delivered an extension to 

the Incident Response Database to support the Physical 

Threat Assessment Team. 

The federal government recently initiated a 30-day 

“Cybersecurity Sprint” exercise in 2015 that included 

seven cybersecurity actions to improve the security 

posture of federal systems, networks, and data. Among 

the most prominent actions was the mandatory use of 

personal identity verification (PIV) cards usage and 

personal identification numbers (PINs) for logging 

into agency computers and systems for 75 percent of all 

network accounts by July 15, 2015. The NRC met this 

action by successfully achieving 78 percent. Additionally, 

the agency as part of its security program was able to 

reduce the number of privileged network accounts by 

over 50 percent over the last several years. The agency’s 

two-factor PIV strong authentication is at 97 percent 

for privileged and 93 percent for unprivileged network 

accounts. Furthermore, the agency developed and 

submitted its Cybersecurity Corrective Action Plan to the 

Office of Management and Budget on July 31, 2015, which 

includes the agency’s strategy to achieve 100 percent PIV 

implementation for unprivileged and privileged network 

accounts and to review and validate high valued assets as 

it relates to cybersecurity and physical protection by the 

end of the calendar year 2015.

In FY 2015, the percentage of NRC employees who 

succumbed to the social engineering scenarios tests 

decreased by seven percentage points to nine percent. 

The agency implemented an improved mobility solution 

as a replacement for the existing capabilities. Pilots are 

underway to use the new solution to satisfy a number 

of new mobility requirements, including adding new 

capabilities, such as intranet, SharePoint, and file access, 

and replacing older agency-provided devices with current 

and more effective models. 

During FY 2015, the NRC completed agencywide 

deployments of several new software packages and 

upgrades to provide staff with new communication and 

collaboration capabilities including instant messaging, 

presence management, virtual meetings, video 

teleconferencing, and desktop sharing capabilities. In 

addition, a new hosted search site was implemented to 

provide users with a familiar interface and new search 

features such as thumbnail images, social media platforms, 

and new collection searches.  

The NRC closed the final Freedom of Information Act 

(FOIA) requests relating to dam safety, covering more 
C h a p t e r 2 n Program Performance

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than 10,000 pages of records.  A new FOIA staff training 

plan has been implemented in accordance with audit 

findings. The use of a FOIA redaction tool is increasing, 

and the NRC has continued to shorten response times for 

requests and lowered the number of backlogged requests. 

There were tremendous improvements in the Freedom of 

Information Act (FOIA) program within OIS and across 

the agency to improve efficiency and responsiveness to 

requestors. Average response time for simple requests was 

10 days in FY 2015, a 23 percent decrease from FY 2014; 

Average response time for complex requests was 57 days, a 

21 percent decrease from FY 2014. The agency ended FY 

2015 with a backlog of eight cases, a 62 percent decrease 

from the FY 2014 backlog.

Other Management Objectives

Acquisitions

The operating level priorities for Acquisitions in FY 2015 

were as follows:

1.Continue collaboration with stakeholders to optimize 

agency procurement activities and ensure mission needs 

are met.

2.Ensure sourcing strategies are strategic and are executed 

with an agencywide view.

3.Demonstrate leadership in achieving the agency’s small 

business goals.

4.Continue training and change management to ensure 

the success of acquisition centralization, implemented 

technologies, and the Business Advisory Center 

operations.

The agency made significant progress in refining the 

strategic sourcing of support for research and other 

technical assistance through the following:

1.The use of a Portfolio Council, comprised of agency 

subject matter experts, which identified the first set of 

unique capabilities and facilities of the DOE labs by 

issuing and evaluating responses to the first round of 

sources sought notices. The agency issued the second 

round of sources sought notices, and the responses 

will also be evaluated to validate the uniqueness of 

additional DOE lab capabilities and facilities. The 

results will be used to develop a strategy for sourcing 

the appropriate work to the DOE labs in a more efficient 

manner. 

2.A joint effort by agency Acquisition, Small Business 

Program, and Technical Program office representatives 

to host a successful Industry Day for Technical 

Assistance and Research (TA&R) on June 9. The 

purpose of the event was to provide potential vendors 

the opportunity to gain a better understanding of the 

competencies that the NRC is seeking. The event will 

help the NRC continue to find additional opportunities 

to use commercial vendors rather than the DOE labs for 

TA&R work.

Business process changes have resulted in significant 

efficiency and standardization improvements in the 

agency’s acquisition program. The streamlined and 

automated process, the Strategic Acquisition System 

(STAQS), eliminated paper and previous manual and 

decentralized tasks in the areas of workflow (including 

reviews and approvals), acquisition planning, and 

data analysis in the acquisition lifecycle (including 

contract closeouts). STAQS also eliminated manual and 

duplicative data entry and reconciliation and provided the 

ability to report accurately on commitment and obligation 

of agency funds for procuring goods and services. 

Program offices now have real-time access to reports that 

allow close monitoring and tracking of commitments 

and obligations that go through the procurement process. 

Data quality has significantly increased, and the agency 

can now perform spend analysis on a quarterly basis, 

saving the agency approximately $500,000 per year. 

Furthermore, STAQS provides the ability to meet the 

NRC’s Open Government and other Federal reporting 

requirements on an automated basis, eliminating staff 

time in manual data collection and validation activities.

As part of agency efforts to leverage existing Government 

wide acquisition sources to streamline the agency process 

for the acquisition and provision of supplies and support 

services, while continuing to support small business 
C h a p t e r 2 n Program Performance

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program goals, the agency began procurement of the 

following:

1.Domestic ground delivery services for the NRC’s 

premium delivery service requirements under General 

Service Administration’s (GSA’s) Federal Strategic 

Sourcing Initiative domestic delivery services blanket 

purchase agreements. 

2.Office supplies under the GSA’s Federal Strategic 

Initiative for Office Supplies. 

These two programs serve as a streamlined purchasing 

channel that helps the NRC achieve significant savings on 

office supplies and package delivery services. 

In FY 2015, the agency developed a custom agencywide 

reporting on grants in response to the White House 

performance report on agency actions to assist 

minority‐serving institutions. 

Administrative Services

The operating level priorities for Administrative Services 

in FY 2015 were as follows:

1.Develop and implement an updated strategy for 

housing the agency for the long-term.

2.Continue implementation of a near-term NRC Housing 

and Parking strategy for the White Flint Campus.

3.Provide appropriate level of administrative support to 

the agency in a climate of declining budgets.

As part of agency efforts to enhance security preparedness 

at its headquarters campus, the NRC completed Phase 1 

renovations of vehicle barrier replacements and conducted 

active shooter exercises, including training for NRC 

Headquarters occupants on active shooters. 

As part of agency efforts to “reduce the footprint,” the 

NRC completed the following office moves to support 

consolidation of headquarters staff at the three-building 

White Flint North complex:

•	The Office of Nuclear Regulatory Research moved from 

the Church Street building to the Two White Flint 

North Building (TWFN).

•	The Office of Nuclear Material Safety and Safeguards 

relocated from the Three White Flint North (3WFN) 

building to TWFN, including the high-performance 

computing system, thus releasing the agency’s last 

satellite location. 

These moves reduced the NRC’s space footprint by 

155,955 usable square feet. The NRC completed and 

submitted agency’s “Reduce the Footprint” 5 Year Real 

Property Efficiency Plan to OMB and GSA. 

The agency reduced overall energy consumption in 

FY 2015 by 35 percent compared to the FY 2010 baseline. 

This was due to several energy savings projects that the 

NRC undertook in FY 2015.

The agency met all major milestones and responded 

to correlating data calls related to the Revised Federal 

Investigative Standards, the National Security 

Adjudicators Training Requirements, and the government 

wide Periodic Reinvestigation Backlog effort. 

Financial Management and Financial

Stewardship

The operating level priorities for Financial Management in 

FY 2015 were as follows:

1.Continue centralization of financial management 

processes and activities.

2. Strengthen fee policy and billing processes.

3.Enhance budget execution and analysis.

4.Transition to new and upgraded financial management, 

travel, time and labor, and acquisition systems.

5.Enhance financial management reporting capabilities.

The NRC completed a streamlined FY 2016 Congressional 

Budget Justification and the final phase of budget 

formulation centralization activities within the agency, 

and it implemented the new 2080 full-time equivalent 

(FTE) method to better align FTE results with the 

productive hour method. Also, the agency accomplished 

an end-of-year analysis of budget execution during this 

fiscal year. 
C h a p t e r 2 n Program Performance

75

The NRC also implemented five of nine process 

improvements designed to strengthen internal controls 

for its Management Directive (MD) system. The MD 

system contains a comprehensive set of publications that 

address all major regulatory and support activities of 

the agency. This business process improvement activity, 

scheduled for completion in FY 2016, stems from the 

September 15, 2014, OIG audit of the NRC’s process for 

revising MDs. 

The agency continued its centralization of timekeeping 

functions and management of cost accountability codes. 

In addition, the NRC worked on implementing cost 

accountability improvements. 

The NRC published the FY 2015 Proposed Fee Rule in 

the Federal Register. The NRC Fee Recovery Schedules 

for FY 2015 are located at http://www.gpo.gov/fdsys/pkg/

FR-2014-06-30/pdf/2014-15193.pdf. The agency issued 

100 percent of all invoices on a timely basis for licenses 

under 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.” It also referred 

100 percent of all eligible debt to the U.S. Treasury and 

wrote off 100 percent of all 2‐year‐old debt by the end of 

the calendar year. 

The NRC undertook multiple efforts in FY 2015 to increase 

transparency in the fee calculations and processes. These 

have included: 

•	Developing enhanced explanations of fee calculations in 

the work papers.

•	Convening a public meeting on fees. 

•	Contracting with an independent vendor to conduct a 

benchmarking study of our fee processes with those of 

similar agencies for best practices; and 

•	Initiating other outreach effort with stakeholders.  

The agency has also undergone efforts to reduce overhead 

by reclassifying direct supervisory support to better align 

resources to mission program support; reduced fulltime equivalents (FTEs); cut the information technology 

budget; and consolidated its headquarters facilities.

In February 2015, the NRC contracted with Ernst & 

Young (EY) to conduct a review of the agency’s overhead 

functions and to identify ways to reduce costs with no 

impact on the agency’s ability to carry out its mission.  

The EY review confirmed that there is no standard 

government-wide definition of overhead costs, but found 

that NRC overhead costs are roughly in line with peer 

agencies with respect to the standard corporate support 

cost categories used by the Federal Chief Executive 

Officers Council for acquisition, financial management, 

information technology, human capital, and real property.  

However, the review recommended the realignment 

of some resources currently categorized as overhead 

that provide direct support to the NRC’s programmatic 

activities.

The April 30, 2015, EY report recommendations include 

but are not limited to the following: 

•	 centralizing budget execution activities in order to 

increase efficiency and reduce staffing requirements.

•	 continuing an initiative to consolidate data centers to 

reduce housing costs.

•	streamlining the size and deployment of security 

staffing at NRC facilities to reduce costs.

•	reintegrating the International Activities Product Line 

back into the programmatic areas it supports.

•	 conducting a cost-benefit analysis on outsourcing 

transactional mission support processes to evaluate 

opportunities for cost reduction through the use of 

external shared service providers.

The agency is working to implement the recommendations 

in the EY report.

International Activities

The operating level priorities for International Activities 

in FY 2015 were as follows:

1. Support new and continued commitment to improving 

nuclear regulatory infrastructure worldwide.
C h a p t e r 2 n Program Performance

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2.Promote U.S. national security interests and nuclear 

nonproliferation policy objectives through participation 

in negotiations and implementation of international 

treaties, conventions and other multilateral or bilateral 

agreements, including Atomic Energy Act Section 123 

Agreements for Peaceful Nuclear Cooperation. 

The NRC supports U.S. interests abroad in the safe and 

secure use of nuclear materials and in guarding against 

the spread of nuclear weapons. These activities involve 

all business lines under Nuclear Reactor Safety and 

Nuclear Materials and Waste Safety but are presented 

in this separate section, since these activities are at the 

Commission policymaking level. The agency actively 

participates in international working groups and provides 

advice and assistance to international organizations 

and foreign countries to develop effective regulatory 

organizations and enforce rigorous safety standards. 

The NRC is the U.S. licensing authority for exports and 

imports of nuclear materials and equipment.

The NRC’s international work and engagements cover 

a wide variety of technical and policy issues in multiple 

venues. For example, the NRC supports U.S. Government 

commitments to the major safety, security, and safeguards 

treaties and conventions. The NRC has 45 information 

sharing agreements with different countries, Taiwan, and 

the European Atomic Energy Community to exchange 

information to benefit both foreign and domestic 

programs. The NRC engages with over 85 countries 

that have mature nuclear power or radioactive materials 

programs, focusing on sharing operational information 

and best practices. NRC-supported assistance 

is provided, both bilaterally and multilaterally, to 

approximately 140 countries through training, workshops, 

peer reviews of regulatory documents, working group 

meetings, and exchanges of technical information and 

specialists. The NRC also participates in cooperative 

research programs with 30 countries and Taiwan through 

approximately 100 multilateral agreements in order to 

share U.S. operating experience and to learn from the 

experiences of other countries.

In FY 2015, the Commission issued an International 

Policy Statement highlighting the importance of NRC 

engagement internationally and directing that these 

engagements include and support high-level strategic 

elements such as implementing obligations pursuant 

to international treaties and conventions, providing 

international assistance, and fostering international 

technical cooperation and collaborative research. These 

are elements within which international activities are 

examined, prioritized, and conducted as an integral 

component of the NRC’s mission.

International Treaties and

Agreements

The NRC supports many U.S. Government treaties and 

obligations. For example, in FY 2015, the NRC actively 

supported interagency preparations for, and attaining 

leadership positions at, the Conventions on Nuclear 

Safety (CNS) Diplomatic Conference. In addition, the 

NRC provided technical insights into the development 

of the Vienna Declaration, participated in consultancy 

meetings concerning the template for National Reports, 

and supported the interagency preparation for and 

participation in the 7th CNS Organizational meeting. 

The NRC also participated in interagency coordination 

and cooperation for the 5th Review cycle of the Joint 

Convention on the Safety of Spent Fuel Management and 

on the Safety of Radioactive Waste Management (Joint 

Convention), which included serving as officers for the 

Joint Convention, specifically as Country Group ViceChair and Rapporteur. 

Also in FY 2015, the NRC reviewed the proposed U.S.–

China Agreement for Cooperation on the Peaceful Uses 

of Nuclear Energy (123 Agreement). The Chairman’s 

letter to the President dated March 19, 2015, conveyed the 

Commission’s recommendation that the President make 

the requisite positive statutory determination, approve 

the proposed renewal of the U.S.–China 123 Agreement, 

and authorize its execution by the U.S. Department 

of State. The NRC also reviewed the proposed U.S.–

Republic of Korea Agreement for Cooperation on the 

Peaceful Uses of Nuclear Energy. The Chairman’s letter 

to the President dated May 21, 2015, conveyed the 

Commission’s recommendation that the President make 
C h a p t e r 2 n Program Performance

77

the requisite positive statutory determination, approve the 

proposed renewal, and authorize its execution by the U.S. 

Department of State.

Export and Import Licensing

Through its export and import authority, the NRC 

upholds the U.S. Government goals of limiting the 

proliferation of materials that could be used in weapons 

and supports the safe and secure use of civilian nuclear 

and radioactive materials worldwide. The NRC continues 

to work to strengthen the export and import regulations 

of nuclear equipment and materials and to improve 

communication between domestic and international 

stakeholders.

In FY 2015, the NRC completed 84 specific export or 

import licensing actions; 12 reviews of 10 CFR Part 810, 

“Assistance to Foreign Atomic Energy Activities,” 

authorization requests; and 5 subsequent arrangements 

requested by the Executive Branch. The NRC also 

participated in U.S. interagency bilateral physical 

protection visits to support export licensing.  The NRC’s 

export/import licensing reviews ensure that nuclear 

equipment and material are transferred to authorized 

parties in ways consistent with applicable U.S. law and 

international obligations. The NRC continued to monitor 

policy and technical changes at the Nuclear Suppliers 

Group for impacts on its export regulations.

International Cooperation and

Assistance

The NRC has a robust relationship with both the 

Nuclear Energy Agency (NEA) in France and with the 

International Atomic Energy Agency (IAEA) in Austria. 

The NEA’s membership comprises countries with mature 

nuclear programs and regulatory organizations, which 

facilitates beneficial dialogue on detailed technical topics. 

The NEA’s research activities enable multiple countries 

to benefit from research conducted in a single location, 

which promotes cooperation and efficient use of limited 

resources. Due to the more comprehensive international 

membership of the IAEA, and its focus on safety, security, 

and safeguards, the NRC is engaged in a broader and 

more varied number of IAEA activities.

In FY 2015, the NRC continued to co-chair the NEA’s 

Committee on Nuclear Regulatory Activities (CNRA). 

CNRA is the NEA committee responsible for facilitating 

cooperation among its member countries in regulation, 

licensing, and inspection of nuclear installations to 

improve safety. The NRC participated in all four NEA 

working groups and two senior level task groups under 

CNRA, and chaired one working group. The NRC also 

chairs the recently established NEA CNRA ad-hoc Group 

on the Safety of Advanced Reactors. The NRC also chairs 

the NEA’s Committee on Safety of Nuclear Installations. 

Some of the most significant work is done in this group 

is with the Halden Reactor Project, a program of research 

covering a broad range of areas including fuels, materials, 

digital systems, human factors, and human reliability. 

The NRC plays a leadership role in the Multinational 

Design Evaluation Program (MDEP), which facilitates 

cooperation among 14 countries in evaluating the 

designs for new nuclear power plants, including the 

AP1000, EPR, APR1400, and ABWR. The NRC 

Chairman participates in the MDEP Policy Group. The 

agency participated in seven working groups and led 

three of them.

At the IAEA, the NRC participates in the development 

of safety standards, the application of international 

safeguards in the United States and abroad, assistance 

to countries through the IAEA Technical Cooperation 

program, participation in the work of the Department 

of Nuclear Energy, and support for the IAEA’s security 

activities. The NRC actively participates in each of the 

IAEA’s safety standards committees and the Nuclear 

Security Guidance Committee and represents the U.S. 

Government in the Commission on Safety Standards. Of 

particular note is the increasing engagement of the NRC 

in the IAEA’s many assessment missions, including those 

focused on national regulatory and security programs.

For example, the NRC is engaged both domestically 

and internationally in efforts to enhance nuclear 

safety and security through the regulatory oversight of 

radioactive sources. In FY 2015, the NRC participated 
C h a p t e r 2 n Program Performance

78

in numerous meetings of technical and legal experts on 

the IAEA’s Code of Conduct for the Safety and Security of 

Radioactive Sources, both to ensure that its implementing 

guidance is clear and accurate and to encourage Member 

States that have not yet made a political commitment to 

implement the Code to do so.

The NRC also helped to establish an international 

regulatory forum for design review of small modular 

reactors at IAEA, and it provided primary support to 

implement the forum and multilateral cooperation in 

this area. 

Under its assistance program, the NRC continued 

engagement on establishing basic regulatory 

infrastructure needed for oversight of a nuclear power 

program with countries in Africa, Europe, the Middle 

East, and Southeast Asia. The agency continued 

expanding its engagement with regulatory counterparts in 

Africa, Asia, and Latin America on establishing effective 

regulatory oversight of radioactive materials. The NRC 

participates in numerous IAEA-sponsored coordination, 

information exchange, and knowledge management 

forums. These include the Global Nuclear Safety and 

Security Network, the Asian Nuclear Safety Network, the 

Regulatory Cooperation Forum, the Technical Support 

Organization Forum, the Forum of Nuclear Regulatory 

Bodies in Africa, and the Arab Network of Nuclear 

Regulators. 

The NRC continues to work with its Japanese 

counterparts on lessons learned from the Fukushima 

Dai-chi accident and other safety and security related 

activities. The NRC and the Japan nuclear regulator, 

the Nuclear Regulatory Agency (NRA), held two 

Steering Committee meetings on nuclear security. The 

cooperative framework provides the basis for more 

structured bilateral cooperation between the NRC and 

the NRA. Additionally, the NRC held information 

exchanges with numerous other Japanese government 

agencies and non-government organizations.

The NRC continues to implement a strategic plan 

with China’s regulatory authority, National Nuclear 

Safety Administration (NNSA), for cooperation on the 

regulatory oversight of the construction of AP1000 

reactors in both countries. The plan includes exchange 

of inspectors, joint vendor inspections, information 

exchanges, and observations during the pre-operational 

testing phases. In FY 2015, the NRC held multiple 

meetings and discussions with China’s NNSA on AP1000 

regulation, resulting in additional information exchanges 

and multiple NRC staff trips to the Sanmen site to observe 

pre-operational and simulator testing.

COSTING TO GOALS

This year’s PAR presents the full cost of achieving the 

Safety and Security goals for the NRC’s major programs, 

Nuclear Reactor Safety and Nuclear Materials and Waste 

Safety. The total cost of achieving the agency’s strategic 

goals was $1,083.5 million. The cost of achieving the 

agency’s Safety goal was $1,025.5 million and the cost of 

achieving the agency’s Security goal was $58.0 million 

(see Figure 19).

Figure 19 – NRC Safety and Security 

Costs (in millions)

Security – $58.0

5%

95%

Safety – $1,025.5

PROGRAM EVALUATIONS

The NRC conducted several program evaluations of its 

regulatory operations during FY 2015. The evaluations 

were conducted for both the nuclear reactor and the 

nuclear materials programs.
C h a p t e r 2 n Program Performance

79

Construction Reactor

Oversight Process

Objective: The objectives of the annual cROP selfassessment are as follows:

1.To determine whether the ongoing program is effective 

in supporting the achievement of the performance goals 

and the agency’s strategic goals.

2.To provide timely, objective information to inform 

program planning and to develop recommended 

improvements to the cROP.

3.To inform the Commission, NRC senior management, 

and the public of the results of the cROP selfassessment program, including any conclusions and 

resultant improvement actions.

Scope: The self-assessment includes the following:

1.Evaluations of the construction inspection program, 

the construction significance determination process, 

and the construction assessment and enforcement 

programs.

2.Discussions and assessments of cROP communications, 

performance metrics, and resource expenditures.

3.Updates on the ITAAC and construction experience 

programs.

Outcome: The CY 2014 self-assessment, issued May 1, 2015, 

concluded that the cROP met its program goals and the 

agency’s strategic goals of ensuring safety and security 

through objective, risk-informed, understandable, and 

predictable oversight. All 11 performance metrics met 

predetermined criteria, demonstrating that the corrective 

action taken to resolve the one out-of-standard metric 

identified in CY 2013 was successful.

Vendor Inspection Program (VIP)

Objective: The annual VIP self-assessment determines if 

the VIP is meeting the following objectives: 

1.Verify that applicants and licensees are providing 

effective oversight of supply chain.

2.Effectively communicate with stakeholders.

3.Perform timely and adequate allegation follow-up.

4.Ensure that agency staff has necessary knowledge 

and skills.

Scope: The self-assessment evaluates performance 

metrics under each objective to demonstrate that 

overarching goals are being supported.

Outcome: The FY 2014 self-assessment, issued 

December 18, 2014, demonstrated the VIP met its 

program goals. Ten of 11 performance metrics met 

the predetermined criteria, and the agency identified 

corrective actions for the one that did not. Both of the 

out-of-standard metrics identified in FY 2013 were met 

in FY 2014, demonstrating that the corrective actions 

implemented last year were successful. 

Integrated Materials 

Performance Evaluation

Programs

During FY 2015, the NRC conducted Integrated Materials 

Performance Evaluation Program (IMPEP) reviews 

and corresponding Management Review Boards for the 

Commonwealth of Virginia, the State of Florida, State of 

Maine, State of New Jersey, State of North Dakota. IMPEP 

reviews were also conducted for the NRC’s Region I 

materials program, and with respect to the regulation 

of nuclear material the NRC’s sealed source and device 

evaluation program. These programs help to fulfill 

the NRC’s mission to protect public health and safety, 

promote the common defense and security, and protect 

the environment. Additionally, the agency reviewed 

regulations for 20 different Agreement States to ensure 

compatibility with NRC regulations. During the reviews, 

the NRC determined that the performance of each 

program was adequate and helped to contribute to the 

successful completion of the NRC’s mission.

Abnormal Occurrences 

Reporting Criteria

During FY 2015, the NRC conducted a review of the 

existing Abnormal Occurrence (AO) Reporting Criteria 

mandated under Section 208 of the Energy Reorganization 

Act of 1974, as amended (Public Law 93-438). The review 
C h a p t e r 2 n Program Performance

80

concluded that changes were needed to adopt current 

requirements, and clarify and restructure the existing 

criteria used by the NRC and Agreement States for 

determining whether to consider an incident or event as 

an AO.  The proposed revisions to the policy statement 

will ensure consistency with current NRC guidance and 

regulations.  The policy will reflect a range of health 

and safety concerns and applies to incidents and events 

involving a single individual, as well as those having an 

overall impact on the general public.  The AO criteria 

use a high reporting threshold so that only those events 

considered significant from the standpoint of public 

health and safety are reported to Congress. In summary, 

the proposed changes were impacted by the changes to 

10 CFR Part 37, clarification of the criteria for medical 

AOs, and other administrative clarifications.

DATA SOURCES, DATA QUALITY, AND

DATA SECURITY

The NRC’s data collection and analysis methods are 

driven largely by the regulatory mandate that Congress 

entrusted to the agency. 

As part of the NRC’s regulatory requirement under 

10 CFR 20.2206, “Reports of Individual Monitoring,” 

several NRC-regulated industries are required to submit 

occupational radiation exposure reports to the Radiation 

Exposure Information and Reporting System (REIRS) 

database. The agency analyzes these reports to ensure that 

licensees comply with the annual occupational dose limit 

of 50 millisieverts (5 rem). The agency uses the data in the 

following ways: 

1.As a metric in the agency’s ROP to evaluate the 

effectiveness of licensee programs used to keep 

occupational radiation doses as low as reasonably 

achievable and for inspection planning.

2.To assist in the evaluation of the radiological risk 

associated with certain categories of NRC-licensed 

activities and for comparative analysis of radiation 

protection performance.

3.To provide occupational radiation exposure history 

reports to individuals exposed to radiation or 

radioactive material at NRC-licensed facilities.

4.To provide facts for responding to Congressional and 

administration inquiries and to questions from the 

public regarding occupational radiation exposures at 

NRC‐licensed facilities.

The agency publishes NUREG-0713, “Occupational 

Radiation Exposure at Commercial Nuclear Power 

Reactors and Other Facilities,” annually. NUREG-0713, 

Volume 34, for CY 2012 was issued in April 2014. It is 

available on the agency’s Web site: http://pbadupws.nrc.

gov/docs/ML1412/ML14126A597.pdf. Section 208 of the 

Energy Reorganization Act of 1974, as amended, requires 

the NRC to inform Congress of incidents or events 

that the Commission determines to be significant from 

the standpoint of public health and safety. The agency 

developed the AO criteria to comply with the legislative 

intent of the Energy Reorganization Act of 1974 to 

determine which events should be considered significant. 

Based on these criteria, the agency prepares an annual, 

“Report to Congress on Abnormal Occurrences,” 

(NUREG-0090). One important characteristic of this 

report is that the data presented normally originate from 

external sources, such as Agreement States and NRC 

licensees. NUREG-0090, Volume 37, for FY 2014, issued 

in May 2015, is available on the agency’s Web site: http://

pbadupws.nrc.gov/docs/ML1514/ML15140A285.pdf.

The NRC finds these data sources credible for the 

following reasons:

1.Agency regulations require Agreement States, licensees, 

and other external sources to report the necessary 

information.

2.The NRC maintains an aggressive inspection program 

that, among other activities, includes auditing licensee 

programs and evaluating Agreement State programs 

to ensure that they are reporting the necessary 

information as required by the agency’s regulations.
C h a p t e r 2 n Program Performance

81

3.The NRC has established procedures for inspecting 

and evaluating licensees. The agency employs multiple 

database systems to support this process, including 

the licensee event report Search System, the Accident 

Sequence Precursor database, the Nuclear Materials 

Events Database, and the REIRS. In addition, 

nonsensitive reports submitted by Agreement States 

and NRC licensees are available to the public through 

ADAMS, accessible through the agency’s Web site 

http://www.NRC.gov/reading-rm/adams.html.

The NRC verifies the reliability and technical accuracy of 

event information reported to the agency and periodically 

inspects licensees and reviews Agreement State programs.

In addition, NRC Headquarters, the regional offices, and 

Agreement States hold periodic conference calls to discuss 

event information. Events identified as meeting the AO 

criteria are validated and verified before being reported to 

Congress. 

Additionally, the NRC is an active participant in data.

gov, a Federal Web site designed to increase public access 

to high-value, machine-readable datasets generated 

by the Executive Branch. The NRC published its first 

dataset in October 2009, and, in response to the Open 

Government directive, published three additional datasets 

in January 2010, and as of the end of FY 2014, 33 datasets 

have been published. 

The NRC launched its Master Data Management (MDM) 

Program in January 2015. The goal of the MDM Program 

is to ensure that mission critical systems and staff have 

timely access to data collected, stored, and processed 

across the enterprise. The Program will ensure that 

agency-wide data is accurate; reduce and/or eliminate 

the storage of duplicate information; provide controls 

to improve data quality; and provide a foundation for 

information sharing and exchange. MDM will also be 

an umbrella where more direct public digital services 

and their improvements, will be consolidated and 

integrated. The NRC will continue to encourage public 

feedback on its high-value information, and consistent 

with agency policy and guidance provided by data.gov, 

will continue to add new datasets to its high-value dataset 

publication plan.

INFORMATION SECURITY

The NRC’s information security program performs the 

following functions:

1.Protect NRC and licensee information and information 

systems from unauthorized access, use, disclosure, 

disruption, modification, or destruction.

2.Protect electronic control functions from unauthorized 

access or manipulation.

3.Ensure that adequate controls for protecting securityrelated information are used in the conduct of NRC 

business. 

The NRC information security program includes 

measures to accomplish the following: 

1.Ensure that information security requirements, 

standards, and guidance are clear, concise, appropriate, 

and able to mitigate the potential adverse effects if 

sensitive information is compromised.

2.Ensure that security controls for information owned 

by or under the control of the NRC are consistent with 

established information security controls, operating 

as intended, and having the desired impact, as well 

as that similar controls for licensees regulated by the 

NRC are in compliance with NRC information security 

regulations.

3.Ensure that suspected or actual information security 

violations are evaluated and that appropriate sanctions 

are considered.

4.Ensure that the NRC has made sufficient preparations 

for information security‐related emergencies and 

incidents.

5.Ensure that internal information security program 

components complement each other and are 

periodically evaluated and improved.
82 Performance and Accountability Report n Fiscal Year 2015

C h a p t e r 2 n Program Performance

PERFORMANCE DATA COMPLETENESS

AND RELIABILITY

The NRC assess the completeness and reliability of its 

performance data. Comparisons of actual performance 

with the projected levels are possible only if the data 

used to measure performance are complete and reliable. 

Consequently, the Reports Consolidation Act of 2000

requires the NRC Chairman to assess the completeness 

and reliability of the performance data used in this report. 

The process for ensuring that the data are complete and 

reliable is based upon reporting by the applicable business 

line leaders at the agency’s Quarterly Performance Review 

meetings. The report, “Data Collection Procedures for 

Verification and Validation of Performance Indicators,” 

contains the processes the agency uses to collect, validate, 

and verify performance data. This report is on page 107 

of the NRC’s FY  2015 Congressional Budget Justification 

and is located on the NRC Web site at http://www.nrc.gov/

reading-rm/doc-collections/nuregs/staff/sr1100/v30/.

DATA COMPLETENESS

The NRC considers data to be complete if the agency 

reports actual performance data for every performance 

goal and indicator in the annual plan. Actual 

performance data include all data that are available when 

the agency sends its report to the President and Congress. 

The agency has reported actual data for every strategic 

and performance goal indicator. In addition, all of the 

data are reported for each indicator. As a result, the data 

presented in this report meet the requirements for data 

completeness.

DATA RELIABILITY

The NRC considers data to be reliable when agency 

managers and decisionmakers use the data in carrying out 

their responsibilities. The data presented in this report 

meet this requirement for data reliability because NRC 

managers and senior leaders regularly use the reported 

data in the course of their duties.
h t t p : / / www.nrc.gov n Protecting People and the Environment 83
84
C h a p t e r 3 n Financial Statements and Auditors’ Report

85

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

(NRC) Fiscal Year (FY) 2015 Performance and Accountability Report. An independent 

auditor has rendered an unmodified opinion on the NRC financial statements for the twelfth 

consecutive year. 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.

During FY 2015, the agency began implementation of its Project Aim 2020 initiative to 

improve efficiency, effectiveness, and agility for responding to a range of possible futures 

while fulfilling the NRC’s mission in the present and well into the future. NRC staff has been 

exploring opportunities to improve through examination of what work the agency has been 

doing and what work should be continued and/or discontinued. The Office of the Chief Financial Officer has been 

supporting this initiative through development of Cost Activity Codes to enhance information on labor and contract 

costs. I am confident that the expertise and creativity of NRC staff will ensure that the agency efficiently accomplishes 

its safety and security mission.

FY 2015 saw continued progress within the agency’s accounting and financial management systems. This included a 

system upgrade for its core general ledger system, the Financial Accounting and Integrated Management Information 

System, which allows the required functionality to incorporate the U.S. Treasury Government·wide Treasury Accounting 

Symbol reporting mandate. A pilot program was launched for the NRC’s Budget Formulation System for interactive 

reporting to enhance and centralize the agency’s resource planning and forecasting business process. The agency has 

successfully migrated to the E-Gov Travel Service 2 system in May 2015. The Human Resource Management System, 

formerly known as Time and Labor Modernization, has completed the planned upgrade and begun the migration to the 

new release to address legislative requirements, add new capabilities and strengthen controls.

The NRC performed a fee revenue comparative analysis study in FY 2015 to determine best practices among fee setting 

Federal agencies requirements in an effort to streamline Fee Policy activities and shorten the Fee Rule development 

window. To enhance transparency, the agency held a public outreach meeting on the FY 2015 Proposed Fee Rule to 

discuss the rule in detail and solicit comments from stakeholders. The NRC improved the clarity of the FY 2015 Fee 

Rule work papers and posted them on-line for public access.

The agency also continued to streamline and improve its Programmatic Internal Control Framework to align with 

GAO’s updated Standards for Internal Control in the Federal Government, improve processes, reduced administrative 

burden on technical staff, increase management accountability, and provide a more interdependent approach to 

ensure the effectiveness and efficiency of agency operations. The NRC remains committed to its mission of 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 gratified 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

November 9, 2015

A Message From The Chief Financial Officer
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Balance Sheet (in thousands)

As of September 30, 2015 2014

Assets

Intragovernmental

Fund balance with Treasury (Note 2) $ 353,838 $ 377,391

Accounts receivable (Note 3) 11,095 26,395

Advances and prepayments 11,269 8,056

Total intragovernmental 376,202 411,842

Cash and other monetary assets Accounts receivable, net (Note 3) 84,944 85,172

Property and equipment, net (Note 4) 79,056 90,280

Other 19 20

Total Assets $ 540,221 $ 587,314

Liabilities

Intragovernmental

Accounts payable $ 13,645 $ 12,472

Other (Note 5) 5,215 4,687

Total intragovernmental 18,860 17,159

Accounts payable 23,366 25,713

Federal employee benefits (Note 6) 6,040 6,669

Other (Note 5) 79,700 74,729

Total Liabilities 127,966 124,270

Net Position

Unexpended appropriations 283,151 306,226

Cumulative results of operations (Note 8) 129,104 156,818

Total Net Position 412,255 463,044

Total Liabilities and Net Position $ 540,221 $ 587,314

The accompanying notes to the financial statements are an integral part of this statement.

FINANCIAL STATEMENTS
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Statement of Net Cost (in thousands)

For the fiscal years ended September 30, 2015 2014

Nuclear Reactor Safety

Gross costs $ 838,682 $ 817,279

Less: Earned revenue (814,280) (815,037)

Total Net Cost of Nuclear Reactor Safety (Note 9) 24,402 2,242

Nuclear Materials and Waste Safety

Gross costs 244,777 239,305

Less: Earned revenue (86,554) (81,515)

Total Net Cost of Nuclear Materials and Waste Safety (Note 9) 158,223 157,790

Net Cost of Operations $ 182,625 $ 160,032

The accompanying notes to the financial statements are an integral part of this statement.
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Statement of Changes in Net Position (in thousands)

For the fiscal years ended September 30, 2015 2014

Cumulative Results of Operations

Beginning Balance $ 156,818 $ 160,637

Budgetary Financing Sources

Appropriations used (Note 11) 126,879 121,099

Nonexchange revenue (Note 11) 373 165

Other Financing Sources

Imputed financing from costs absorbed by others (Note 11) 28,032 35,114

Other (373) (165)

Total Financing Sources 154,911 156,213

Net Cost of Operations (182,625) (160,032)

Net Change (27,714) (3,819)

Cumulative Results of Operations $ 129,104 $ 156,818

Unexpended Appropriations

Beginning Balance $ 306,226 $ 242,640

Budgetary Financing Sources

Appropriations received 103,804 184,685

Appropriations used (Note 11) (126,879) (121,099)

Other adjustments Total Budgetary Financing Sources (23,075) 63,586

Total Unexpended Appropriations 283,151 306,226

Net Position $ 412,255 $ 463,044

The accompanying notes to the financial statements are an integral part of this statement.
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Statement of Budgetary Resources (in thousands)

For the fiscal years ended September 30, 2015 2014

Budgetary Resources

Unobligated balance brought forward, October 1 $ 53,464 $ 42,779

Recoveries of unpaid prior-year obligations

Actual 5,047 10,600

Unobligated balance from prior-year budget authority, net 58,511 53,379

Appropriations 1,015,301 1,055,895

Spending authority from offsetting collections 8,001 9,802

Total Budgetary Resources $ 1,081,813 $ 1,119,076

Status of Budgetary Resources

Obligations incurred (Note 12) $ 1,053,813 $ 1,065,612

Unobligated balance, end of year

Apportioned 23,259 48,479

Exempt from apportionment 2,837 4,816

Unapportioned 1,904 169

Total unobligated balance, end of year 28,000 53,464

Total Status of Budgetary Resources $ 1,081,813 $ 1,119,076

Change in Obligated Balance

Unpaid obligations

Unpaid obligations brought forward, October 1 $ 325,876 $ 278,812

Obligations incurred (Note 12) 1,053,813 1,065,612

Outlays (gross) (1,046,990) (1,007,948)

Recoveries of prior-year unpaid obligations (5,047) (10,600)

Unpaid obligations, end of year $ 327,652 $ 325,876

Uncollected payments

Uncollected payments, Federal sources, brought forward, October 1 $ (1,949) $ (3,517)

Change in uncollected payments, Federal sources 135 1,568

Uncollected payments, Federal sources, end of year $ (1,814) $ (1,949)

Memorandum entries:

Obligated balances, start of year $ 323,927 $ 275,295

Obligated balances, end of year $ 325,838 $ 323,927

Budget Authority and Outlays, Net

Budget Authority, gross $ 1,023,302 $ 1,065,697

Actual offsetting collections (8,136) (11,201)

Change in uncollected payments, Federal sources 135 1,568

Budget Authority, Net $ 1,015,301 $ 1,056,064

Outlays, gross $ 1,046,990 $ 1,007,948

Actual offsetting collections (8,136) (11,201)

Outlays, net 1,038,854 996,747

Distributed offsetting receipts (911,501) (871,206)

Agency Outlays, Net $ 127,353 $ 125,541

The accompanying notes to the financial statements are an integral part of this statement.
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NOTES TO THE FINANCIAL

STATEMENTS

 (All tables are presented in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

A. Reporting Entity

The NRC is an independent regulatory agency of the 

Federal Government that the U.S. Congress created to 

regulate the Nation’s civilian use of byproduct, source, and 

special nuclear materials to ensure adequate protection 

of the public health and safety, to promote the common 

defense and security, and to protect the environment. Its 

purposes are defined by the Energy Reorganization Act 

of 1974, as amended, along with the Atomic Energy Act 

of 1954, as amended, which provide the foundation for 

regulating the Nation’s civilian use of nuclear materials.

The NRC operates through the execution of its 

congressionally approved appropriations for Salaries 

and Expenses (which includes funds derived from the 

NWF) and the OIG. In addition, the U.S. Agency for 

International Development (USAID) has provided a 

transfer of funds to develop nuclear safety, regulatory 

authorities, and independent oversight of nuclear reactors 

in Russia, Ukraine, Kazakhstan, Georgia, and Armenia.

B. Basis of Presentation

These financial statements report the financial position 

and results of operations of the NRC as required by the 

Chief Financial Officers Act of 1990 and the Government 

Management Reform Act of 1994. These financial 

statements were prepared from the books and records 

of the NRC in conformance with generally accepted 

accounting principles (GAAP) of the United States and the 

form and content for entity financial statements specified 

by the OMB in Circular No. A-136, “Financial Reporting 

Requirements.” The GAAP for Federal entities are the 

standards prescribed by the Federal Accounting Standards 

Advisory Board, which is the official body for setting the 

accounting standards of the U.S. Government. These 

statements are, therefore, different from the financial 

reports, also prepared by the NRC pursuant to OMB 

directives, which are used to monitor and control the 

NRC’s use of budgetary resources.

The NRC has not presented a Statement of Custodial 

Activity because the amounts involved are immaterial and 

incidental to its operations and mission.

Budgetary information for small budget accounts is 

aggregated by major budget accounts for purposes of the 

Required Supplementary Information.

C. Budgets and Budgetary Accounting

Budgetary accounting measures appropriation and 

consumption of budget spending authority or other 

budgetary resources and facilitates compliance with 

legal constraints and controls over the use of Federal 

funds. Under budgetary reporting principles, budgetary 

resources are consumed at the time of purchase. Assets 

and liabilities, which do not consume current budgetary 

resources, are not reported, and only those liabilities 

for which valid obligations have been established are 

considered to consume budgetary resources.

 In FY 2014, Congress passed the Consolidated 

Appropriations Act, 2014 that funded the NRC’s full 

budget request of $1.04 billion for FY 2014. Not more 

than $9.5 million of the budget may be made available for 

the Office of the Commission as a 2-year appropriation 

that is available for obligation by the NRC through 

September 30, 2015. Additionally, Congress enacted 

a 2-year appropriation of $12.0 million for the OIG, 

which is available for obligation by the NRC through 

September 30, 2015. Congress passed the Consolidated 

Appropriations Act, 2015 that funded the NRC’s budget 

request of $1.00 billion for FY 2015. Not more than 

$7.5 million of the budget may be made available for 

the Office of the Commission as a 2-year appropriation 

that is available for obligation by the NRC through 

September 30, 2016. Additionally, Congress enacted 

a 2-year appropriation of $12.1 million for the OIG, 

which is available for obligation by the NRC through 

September 30, 2016.

D. Basis of Accounting

These financial statements reflect both accrual and 

budgetary accounting transactions. Under the accrual 

method, revenues are recognized when earned and 

expenses are recognized when a liability is incurred, 

without regard to receipt or payment of cash. Budgetary 

accounting is also used to record the obligation of funds 

prior to the accrual-based transaction. The SBR presents 

budgetary resources available to the NRC and changes in 
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obligations during the year. Interest on borrowings of the 

Treasury is not included as a cost to the NRC programs 

and is not included in the accompanying financial 

statements.

E. Revenues and Other Financing

Sources

The NRC is required to offset its appropriations by 

revenue received during the FY from the assessment of 

fees. The NRC assesses two types of fees to recover its 

budget authority:

1. Fees assessed under 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,” for licensing, inspection, and 

other services under the authority of the Independent 

Offices Appropriation Act of 1952 to recover the NRC’s 

costs of providing individually identifiable services to 

specific applicants and licensees.

2. Annual fees assessed for nuclear facilities and materials 

licensees under 10 CFR Part 171, “Annual Fees for 

Reactor Licenses and Fuel Cycle Licenses and Materials 

Licenses.”

Licensing revenues are recognized on a straight-line basis 

over the licensing period. The annual licensing period 

for reactor and materials fees begins October 1 and ends 

September 30. Annual fees for reactors are invoiced in 

four quarterly installments, before the end of each quarter. 

The NRC invoices licensees for materials annual fees in 

the month the license was originally issued. Inspection 

fees are recorded as revenues when the services are 

performed.

For accounting purposes, appropriations are recognized as 

a financing source (appropriations used) at the time goods 

and services are received. Periodically during the FY, 

appropriations recognized are reduced by the amount of 

assessed fees collected during the FY to the extent of new 

budget authority for the year. Collections that exceed the 

new budget authority are held to offset subsequent years’ 

appropriations. Appropriations expended for property 

and equipment are recognized as expenses when the asset 

is consumed in operations as reflected by the depreciation 

and amortization expense.

F. Fund Balance with Treasury

The NRC’s cash receipts and disbursements are processed 

by the Treasury. The Fund Balance with Treasury is 

primarily appropriated funds and license fee collections 

that are available to pay current liabilities and to finance 

authorized purchase commitments. Fund Balance with 

Treasury represents the NRC’s right to draw on the 

Treasury for allowable expenditures.

G. Accounts Receivable

Accounts receivable consist of amounts that other Federal 

agencies and the public owe to the NRC. Amounts due 

from the public are presented net of an allowance for 

uncollectible accounts. The allowance is determined 

based on the age of the receivable and allowance rates 

established from historical experience. Receivables from 

Federal agencies are expected to be collected; therefore, 

there is no allowance for uncollectible accounts for 

Federal agencies.

H. Non-Entity Assets

Non-entity assets consist of miscellaneous penalties and 

interest due from the public, which, when collected, must 

be transferred to the Treasury.

I. Property and Equipment

Property and equipment consist primarily of typical office 

furnishings, leasehold improvements, nuclear reactor 

simulators, and computer hardware and software. The 

costs of internal use software include the full cost of 

salaries and benefits for agency personnel involved in 

software development. The NRC has no real property. 

The land and buildings in which the NRC operates are 

provided by the GSA, which charges the NRC rent that 

approximates the commercial rental rates for similar 

properties.

Property with a cost of $50 thousand or more per unit and 

a useful life of 2 years or more is capitalized at cost and 

depreciated using the straight-line method over the useful 

life. Other property items are expensed when purchased. 

Normal repairs and maintenance are charged to expense 

as incurred.
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J. Accounts Payable

The NRC uses an estimation methodology to calculate the 

accounts payable balance, which represents costs for billed 

and unbilled goods and services received prior to year 

end that are unpaid. The NRC had previously used an 

estimation methodology to calculate the accounts payable 

balance based on a review of the sample obligations from 

the total open obligations balances. For FY 2015, the NRC 

calculates the accounts payable amount using an average 

based on the historical trend of validated accruals. The 

estimation methodology is validated quarterly.

K. Liabilities Not Covered by

Budgetary Resources

Liabilities represent the amount of monies or other 

resources that are likely to be paid by the NRC as 

the result of a transaction or event that has already 

occurred. No liability can be paid by the NRC absent an 

appropriation. Liabilities for which an appropriation has 

not been enacted are classified as “Liabilities Not Covered 

by Budgetary Resources.” Also, the NRC liabilities arising 

from sources other than contracts can be abrogated by the 

Government acting in its sovereign capacity.

Intragovernmental

The NRC records a liability to the DOL for Federal 

Employees Compensation Act (FECA) benefits paid by 

DOL on behalf of the NRC.

Federal Employee Benefits

Federal employee benefits represent the actuarial liability 

for estimated future FECA disability benefits. The future 

workers’ compensation estimate was generated by DOL 

from an application of actuarial procedures developed 

to estimate the liability for FECA, which includes the 

expected liability for death, disability, medical, and 

miscellaneous costs for approved compensation cases. 

The liability is calculated using historical benefit payment 

patterns related to a specific incurred period to predict 

the ultimate payments related to that period.

Other

Accrued annual leave represents the amount of annual 

leave earned by the NRC employees but not yet taken.

L. Contingencies

Contingent liabilities are those for which the existence 

or amount of the liability cannot be determined with 

certainty pending the outcome of future events. The 

uncertainty should ultimately be resolved when one or 

more future events occur or fail to occur. Accounting 

treatment of the contingency depends on if the likely 

outcome is considered probable, reasonably possible, or 

remote.

A contingency is considered probable when the future 

confirming event or events are more likely than not 

to occur, with the exception of pending or threatened 

litigation and unasserted claims. This type of contingency 

is recorded in the financial statements as a contingent 

liability (included in Other Liabilities) and as an expense, 

and should be recorded when a past event or exchange 

transaction has occurred, a future outflow or othe sacrifice 

of resources is probable and the future outflow or sacrifice 

of resources is measurable.

A contingency is considered reasonably possible when the 

chance of the future confirming event or events occurring 

is more than remote but less than probable. This type 

of contingency is disclosed in the notes to the financial 

statements (Note 17) if any of the conditions for liability 

recognition are not met and there is at least a reasonable 

possibility that a loss or an additional loss may have been 

incured.

A contingency is considered remote when the chance of 

the future event or events occurring is slight. This type 

of contingency is not recognized as a liability and as an 

expense in the financial statements, nor disclosed in 

the notes when the chance of the future event or events 

occurring is remote.

M. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned and the accrual is 

reduced as leave is taken. Each year, the balance in the 

accrued annual leave liability account is adjusted to reflect 

current pay rates. To the extent that current or prior-year 

funding is not available to cover annual leave earned but 

not taken, funding will be obtained from future financing 

sources. Sick leave and other types of nonvested leave are 

expensed as taken.
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N. Retirement Plans

The NRC employees belong to either the Federal 

Employees Retirement System (FERS) or the Civil Service 

Retirement System (CSRS).

The NRC does not report on its financial statements FERS 

and CSRS assets, accumulated plan benefits, or unfunded 

liabilities, if any, applicable to its employees. Reporting 

such amounts is the responsibility of the OPM. The 

portion of the current and estimated future outlays for 

FERS and CSRS not paid by the NRC is included in NRC’s 

financial statements as an imputed financing source in 

the Statement of Changes in Net Position and as program 

costs on the Statement of Net Cost.

The NRC employees make mandatory contributions 

through payroll deductions to their retirement plan as 

required by law. For employees belonging to FERS and 

receiving an appointment prior to January 1, 2013, the 

NRC withheld 0.8 percent of base pay earnings and 

provided 13.2 percent in 2015 and 11.7 in 2014 for the 

employer contribution. Per Public Law 112-96, 

Section 5001 of the Middle Class Tax Relief and 

Job Creation Act of 2012, employees hired after 

January 1, 2013, as Federal Employees Retirement System 

- Revised Annuity Employees (FERS- RAE) must pay 

3.1 percent of their salary to retirement contributions 

with an 11.1 percent in 2015 and 9.6 in 2014 for employer 

matching contribution. The sum is transferred to the 

Federal Employees Retirement Fund. For employees 

covered by CSRS, the NRC withholds 7 percent of base 

pay earnings. The NRC matched this withholding with a 

7 percent contribution in FY 2015 and FY 2014.

The Thrift Savings Plan (TSP) is a retirement savings and 

investment plan for employees belonging to either FERS 

or CSRS. The maximum percentage of base pay that an 

employee participating in FERS or CSRS may contribute 

is unlimited, subject to the maximum contribution of 

$18.0 thousand in 2015 and $17.5 thousand in 2014. For 

employees participating in FERS, the NRC automatically 

contributes 1 percent of base pay to their account and 

matches contributions up to an additional 4 percent. 

For employees participating in CSRS, there is no NRC 

matching of the contribution. The sum of the employees’ 

and the NRC’s contributions is transferred to the Federal 

Retirement Thrift Investment Board.

O. Leases

The NRC’s capital leases are for personal property 

consisting of reproduction equipment that is installed at 

the NRC Headquarters.

Capital leases are leases that transfer substantially all the 

benefits and risks of ownership to the lessee. Capital 

leases are reported in the Balance Sheet as an asset under 

Property and Equipment and a liability (Other Liabilities). 

If at its inception, a lease meets one or more of the 

following four criteria, the lease should be classified as a 

capital lease by the lessee:

1. The lease transfers the ownership of the property to the 

lessee by the end of the lease term.

2. The lease contains an option to purchase the leased 

property at a bargain price.

3. The lease term is equal or greater than 75 percent of the 

estimated economic life of the leased property.

4. The present value of rental or other minimum lease 

payments, excluding that portion of the payments 

representing executor cost, equals or exceeds 90 percent 

of the fair value of the leased property.

The FASAB defines an operating lease as a lease in which 

the Federal entity does not assume the risks of ownership 

of the property, plant, and equipment (PP&E). It is an 

agreement conveying the right to use property for a 

limited time in exchange for periodic rental payments.

Operating leases at the NRC consist of real property leases 

with GSA. The leases are for the NRC’s Headquarters and 

regional offices. The GSA charges the NRC lease rates 

that approximate commercial rates for comparable space.

P. Pricing Policy

The NRC provides nuclear reactor and materials 

licensing and inspection services to the public and other 

Government entities. In accordance with OMB Circular 

No. A-25, “User Charges,” and the Independent Offices 

Appropriation Act of 1952, the NRC assesses fees under 

10 CFR Part 170 for licensing and inspection activities to 

recover the full cost of providing individually identifiable 

services.
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The NRC’s policy is to recover the full cost of goods and 

services provided to other Government entities where the 

services performed are not part of its statutory mission 

and the NRC has not received appropriations for those 

services. Fees for reimbursable work are assessed at the 

10 CFR Part 170 rate with minor exceptions for programs 

that are nominal activities of the NRC.

Q. Net Position

The NRC’s net position consists of unexpended 

appropriations and cumulative results of operations. 

Unexpended appropriations represent appropriated 

spending authority that is unobligated and has not been 

withdrawn by the Treasury, and unliquidated obligations 

and expenditures not yet disbursed. Cumulative results of 

operations represent the excess of financing sources over 

expenses since inception.

R. Use of Management Estimates

The preparation of the accompanying financial statements 

in accordance with Generally Accepted Accounting 

Principles requires management to make certain estimates 

and assumptions that affect the reported amounts of 

assets, liabilities, revenues, and expenses. Actual results 

could differ from those estimates.

S. Transfers

The NRC is a party to nonexpenditure transfers of 

funds with the USAID as a receiving entity. These 

transfers are for the international development of nuclear 

safety and regulatory authorities in Russia, Ukraine, 

Kazakhstan, Georgia, and Armenia for the startup, 

operation, shutdown, and decommissioning of Sovietdesigned nuclear power plants; the safe and secure use 

of radioactive materials; and the accounting for and 

protection of nuclear materials. Transfers are legal 

delegations by one agency of its authority to obligate 

budget authority and outlay funds to another agency.

T. Statement of Net Cost

The programs as presented on the Statement of Net Cost 

are based on the annual performance budget and are 

described as follows:

The Nuclear Reactor Safety program encompasses all the 

NRC efforts to ensure that civilian nuclear power reactor 

facilities and research and test reactors are licensed and 

operated in a manner that adequately protects the public 

health and safety, and the environment, and protects 

against radiological sabotage and theft or diversion of 

special nuclear materials. The Nuclear Reactor Safety 

program contains the following activities: operating 

reactors and new reactors.

The Nuclear Materials and Waste Safety program 

encompasses all the NRC efforts to protect the public 

health and safety and the environment and ensures the 

secure use and management of radioactive materials. The 

Nuclear Materials and Waste Safety program contains the 

following activities: fuel facilities, nuclear materials users, 

decommissioning and low-level waste, spent fuel storage 

and transportation, and high-level waste repository.

For intragovernmental gross costs and revenue, the buyers 

and sellers are Federal entities. For earned revenues from 

the public, the buyers of the goods or services are nonFederal entities.
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Note 2 – Fund Balance with Treasury

As of September 30, 2015 2014

Fund Balances

Appropriated funds $ 350,368 $ 371,197

Nuclear Waste Fund 3,470 6,191

Other fund types - 3

Total $ 353,838 $ 377,391

Status of Fund Balance with Treasury

Unobligated balance

Available

Appropriated funds $ 26,096 $ 53,295

Unavailable

Unapportioned 1,904 169

Obligated balance not yet disbursed 325,838 323,927

Total $ 353,838 $ 377,391

The Fund Balance with Treasury consists of the unobligated and obligated budgetary account balances, to include NWF 

activity. The NWF unobligated balance is $2.8 million and $4.8 million as of September 30, 2015, and 2014, respectively.

Other fund types in the Fund Balance with Treasury represents license fee collections used to offset the NRC 

current-year budget authority, miscellaneous collections, and adjustments which will offset revenue in the following FY.

Note 3 – Accounts Receivable

As of September 30, 2015 2014

Intragovernmental

Fee receivables and reimbursements $ 11,095 $ 26,395

Receivables with the Public

Materials and facilities fees-billed $ 7,049 $ 17,054

Materials and facilities fees-unbilled 79,913 72,351

Other 161 187

Total Receivables with the Public 87,123 89,592

Less: Allowance for uncollectible accounts (2,179) (4,420)

Total Receivables with the Public, Net $ 84,944 $ 85,172

Total Accounts Receivable $ 98,218 $ 115,987

Less: Allowance for uncollectible accounts (2,179) (4,420)

Total Accounts Receivable, Net $ 96,039 $ 111,567
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Note 4 – Property and Equipment, Net

As of September 30, 2015 2014

Fixed Assets Class Service Years Acquisition 

Value

Accumulated 

Depreciation 

and 

Amortization

Net Book 

Value

Net Book 

Value

Equipment 5-8 $ 9,461 $ (8,381) $ 1,080 $ 1,114

Leased equipment 5-8 1,462 (790) 672 91

IT software 5 56,162 (47,824) 8,338 13,160

IT software under development - 4,596 - 4,596 396

Leasehold improvements 20 111,933 (55,048) 56,885 71,004

Leasehold improvements in progress - 7,485 - 7,485 4,515

Total $ 191,099 $ (112,043) $ 79,056 $ 90,280

In FY 2009, the NRC signed an Interagency Agreement with the GSA to fund the buildout of the NRC office space for 

the new Three White Flint North (3WFN) office building. The NRC capitalized the cost of the buildout as a leasehold 

improvement, original total cost $51.7 million. However, to comply with the OMB’s Freeze the Footprint initiative, the 

U.S. Congress determined that the NRC should only occupy 6 of the 14 floors of the 3WFN office building.

Subsequently, the GSA has leased 8 of the 14 floors to the U.S. Food and Drug Administration (FDA). The FDA 

occupied 4 floors during the 4th quarter of FY 2014, and 4 additional floors as well as the cafeteria space during the 

3rd quarter of FY 2015. Accordingly, the NRC recognized a loss on the impaired asset for the remaining net realizable 

value of the buildout cost for the 3WFN office space now occupied by the FDA of $12.4 million and $11.2 million as of 

September 30, 2015, and 2014, respectively.

In accordance with SFFAS No. 44 Accounting for Impairment of General Property, Plant, and Equipment Remaining 

in Use, the NRC repairs or replaces capital assets as required and does not recognize any other impairment losses at 

this time.

Note 5 – Other Liabilities

As of September 30, 2015 2014

Intragovernmental

Liability to the U.S. Treasury General Fund for miscellaneous receipts $ 35 $ 70

Liability for advances from other agencies 15 7

Accrued workers’ compensation 1,522 1,601

Accrued unemployment compensation 18 11

Employee benefit contributions 3,625 2,998 

Total Intragovernmental Other Liabilities $ 5,215 $ 4,687 

Other Liabilities

Accrued annual leave $ 46,491 $ 46,923

Accrued salaries and benefits 14,058 12,330

Contract holdbacks, advances, capital lease liability, and other 7,008 6,319

Contingent Liabilities Grants Payable 12,143 9,157

Total Other Liabilities $ 79,700 $ 74,729

Total Intragovernmental and Other Liabilities $ 84,915 $ 79,416

Other liabilities are current except for capital lease liability (Note 7).
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Note 6 – Liabilities Not Covered by Budgetary Resources

As of September 30, 2015 2014

Intragovernmental

FECA paid by DOL $ 1,522 $ 1,601

Accrued unemployment compensation 18 11

Federal Employee Benefits

Future FECA 6,040 6,669

Other

Accrued annual leave 46,491 46,923

Contingent Liabilities - -

Total Liabilities Not Covered by Budgetary Resources 54,071 55,204

Total Liabilities Covered by Budgetary Resources 73,895 69,066

Total Liabilities $ 127,966 $ 124,270

Liabilities not Covered by Budgetary Resources represents the amount of future funding needed to pay the accrued 

unfunded expenses as of September 30, 2015, and 2014. These liabilities are not funded from current or prior-year 

appropriations and assessments, but rather should be funded from future appropriations and assessments. Accordingly, 

future funding requirements have been recognized for the expenses that will be paid from future appropriations.

The projected annual benefit payments for FECA are discounted to present value. For FY 2015, projected annual 

payments were discounted to present value based on the OMB’s interest rate assumptions, which were interpolated to 

reflect the average duration in years for income payments and medical payments. The interest rate assumptions used for 

FY 2015 discounting were 3.46 percent in year 1 and 3.46 percent in year 2 for wage benefits; and 2.86 percent in year 1 

and 2.86 percent in year 2 for medical benefits.
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Note 7 – Leases

As of September 30, 2015 2014 

Assets under capital leases:

Copiers and booklet maker $ 1,462 $ 1,806

Accumulated depreciation (790) (1,715)

Net assets under capital leases $ 672 $ 91

As of September 30, 2015 2014

Future Lease Payments Due: Fiscal Year Capital Operating

2014 $ - $ - $ - $ 8

2015 24 - 24 46,455

2016 201 39,727 39,928 43,141

2017 204 39,058 39,262 42,497

2018 207 35,504 35,711 37,778

2019 and thereafter 52 158,227 158,279 158,227

Total Lease Liability 688 272,516 273,204 328,106

Subtract: Imputed Interest (19) - (19) (1)

Total Future Lease Payments $ 669 $ 272,516 $ 273,185 $ 328,105

The Capital Lease Liability of $688 thousand for reproduction equipment is included in Other Liabilities (Note 5). For 

Future Lease Payments, the NRC calculates the Capital Lease Liability and subtracts the imputed interest to arrive at the 

Total Future Lease Payments. The reproduction equipment is depreciated over 5 years using the straight-line method 

with no salvage value.

The land and buildings in which the NRC operates are leased through the GSA. The NRC Headquarters complex 

consists of three office buildings and a warehouse located in Rockville, MD, with one of the headquarters office buildings 

jointly leased with the FDA. The NRC has four regional offices located in King of Prussia, PA, Atlanta, GA, Lisle, IL, 

and Arlington, TX. In addition, the NRC operates and maintains a Technical Training Center (TTC) located in 

Chattanooga, TN.

The NRC leases for land and buildings do not have renewal options or contingent rental restrictions. The joint lease for 

the headquarters office building with the FDA and the leases for the four regional office buildings have escalation clauses. 

The leases for the two remaining office buildings at headquarters, the warehouse, and the TTC do not have escalation 

clauses.

Note 8 – Cumulative Results of Operations

As of September 30, 2015 2014

Liabilities not covered by budgetary resources (Note 6) $ (54,071) $ (55,204)

Investment in property and equipment, net (Note 4) 79,056 90,280

Contributions from foreign cooperative research agreements 4,833 4,306

Nuclear Waste Fund 3,470 6,191

Accounts receivable - fees 95,814 111,114

Fee Collection Revenue Not Transferred - 3

Other 2 128

Cumulative Results of Operations $ 129,104 $ 156,818
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Note 9 – Statement of Net Cost

For the fiscal years ended September 30, 2015 2014

Nuclear Reactor Safety

Intragovernmental gross costs $ 243,406 $ 234,636

Less: Intragovernmental earned revenue (57,412) (55,733)

Intragovernmental net costs 185,994 178,903

Gross costs with the public 595,276 582,643

Less: Earned revenues from the public (756,868) (759,305)

Net costs with the public (161,592) (176,662)

Total Net Cost of Nuclear Reactor Safety $ 24,402 $ 2,241

Nuclear Materials and Waste Safety

Intragovernmental gross costs $ 64,238 $ 63,614

Less: Intragovernmental earned revenue (7,122) (5,947)

Intragovernmental net costs 57,116 57,667

Gross costs with the public 180,539 175,691

Less: Earned revenues from the public (79,432) (75,567)

Net costs with the public 101,107 100,124

Total Net Cost of Nuclear Materials and Waste Safety $ 158,223 $ 157,791

Note 10 – Exchange Revenues

For the fiscal years ended September 30, 2015 2014

Fees for licensing, inspection, and other services $ 896,184 $ 891,446

Revenue from reimbursable work 4,650 5,106

Total Exchange Revenues $ 900,834 $ 896,552
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Note 11 – Financing Sources Other Than Exchange Revenue

For the fiscal years ended September 30, 2015 2014

Appropriations Used

Collections are used to reduce the fiscal year’s appropriations recognized:

Funds consumed $ 1,041,101 $ 999,612

Less: Collection of fees assessed (911,501) (871,206)

Less: Nuclear Waste Funding Expense (2,721) (7,307)

Total Appropriations Used $ 126,879 $ 121,099

Funds consumed include $50.7 million and $42.9 million through September 30, 2015, and 2014, respectively, of 

available funds from prior years.

For the fiscal years ended September 30, 2015 2014

Non-Exchange Revenue

Civil penalties $ 195 $ 45

Miscellaneous receipts 178 120

Non-Exchange Revenue 373 165

Contra-Revenue (373) (165)

Total Non-Exchange Revenue, Net of Funds Returned to the 

U.S. Treasury General Fund $ - $ -

For the fiscal years ended September 30, 2015 2014

Imputed Financing

Civil Service Retirement System $ 10,259 $ 18,038

Federal Employee Health Benefit 17,686 16,954

Federal Employee Group Life Insurance 87 89

Judgments/Awards - 33

Total Imputed Financing $ 28,032 $ 35,114

Note 12 – Total Obligations Incurred

For the fiscal years ended September 30, 2015 2014 

Direct Obligations

Category A $ 1,046,459 $ 1,052,034

Exempt from Apportionment 2,295 8,391

Total Direct Obligations 1,048,754 1,060,425

Reimbursable Obligations 5,059 5,187

Total Obligations Incurred $ 1,053,813 $ 1,065,612

Obligations exempt from apportionment are the result of funds derived from the NWF. Category A Obligations consist 

of the NRC appropriations only.
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Note 13 – Undelivered Orders at the End of the Period

For the fiscal years ended September 30, 2015 2014

Undelivered Orders - Unpaid

Nuclear Waste Fund $ 633 $ 1,378

Salaries and Benefits 257,171 260,402

Inspector General 1,517 592

Total Undelivered Orders - Unpaid $ 259,321 $ 262,372

Undelivered Orders - Paid

Nuclear Waste Fund $ - $ -

Salaries and Benefits 10,885 7,712

Inspector General 384 344

Total Undelivered Orders - Unpaid $ 11,269 $ 8,056

Total Undelivered Orders $ 270,590 $ 270,428

Note 14 – Nuclear Waste Fund

For FY 2015 and FY 2014, the NRC’s budget did not include funds from the NWF. The funding provided to the NRC 

prior to FY 2013 and carried forward to subsequent years was for the purpose of performing activities associated with the 

U.S. Department of Energy’s (DOE) application for a high-level waste repository at Yucca Mountain, NV.

The SFFAS No. 43 “Funds from Dedicated Collections: Amending SFFAS 27, Identifying and Reporting Earmarked 

Funds,” lists three defining criteria for funds from dedicated collections. Generally, funds from dedicated collections 

must have at least one source of funds external to the Federal Government, and the statute provides explicit authority 

to retain current, unused revenues for future use. Also, the law includes a requirement to account for and report on the 

receipt and use of the financing sources as distinguished from general revenues.

In 1982, Congress passed the Nuclear Waste Policy Act of 1982 (Public Law 97-425) establishing the NWF to be 

administered by DOE (42 U.S.C. 10222). For the NRC, the NWF transfer is a source of financing from other than 

non-Federal sources. The NRC collects no revenue on behalf of the NWF and has no administrative control over it. 

Furthermore, the Treasury has no separate fund symbol for the NWF under the NRC’s agency location code. The receipt 

and expenditure of NWF money is reported to Treasury under the NRC’s primary Salaries and Expenses fund (X0200).

Based on these facts, the NWF is not a fund from dedicated collections from the NRC’s perspective. In order to provide 

additional information to the users of these financial statements, enhanced disclosure of the fund is presented below.

The NWF amounts received, expended, obligated, and unobligated balances as of September 30, 2015, and 2014, are 

shown in the following table:

For the fiscal years ended September 30, 2015 2014

Appropriations Received $ - $ -

Expended Appropriations $ 2,722 $ 7,307

Obligations Incurred $ 2,295 $ 8,391

Unobligated Balances (includes recoveries of prior-year obligations) $ 2,836 $ 4,813
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Note 15 – Explanation of Differences Between the Statement of Budgetary Resources 

and the Budget of the U.S. Government

SFFAS No. 7, “Accounting for Revenue and Other Financing Sources,” requires the NRC to reconcile the budgetary 

resources reported on the SBR to the actual budgetary resources presented in the President’s Budget and explain any 

material differences. 

The NRC does not have any material differences between the budgetary resources reported on the SBR for FY 2014 and 

the President’s Budget for FY 2014. The reconciliation was based on FY 2014 results because the Budget of the United 

States (also known as the President’s Budget), with actual numbers for FY 2015, was not published at the time that these 

financial statements were issued.

The FY 2015 actual budgetary resources numbers will be available in the FY 2017 President’s Budget which is expected 

to be published in February 2016, and can be located at the OMB Web site http://www.whitehouse.gov/cmb and will be 

available from the U.S. Government Printing Office.

Note 16 – Reconciliation of Net Cost of Operations to Budgetary Resources

For the fiscal years ended September 30, 2015 2014

Budgetary Resources Obligated

Obligations incurred (Note 12) $ 1,053,813 $ 1,065,612

Less: Spending authority from offsetting collections and recoveries (13,048) (20,233)

Less: Distributed offsetting receipts, current year (885,339) (871,206)

Less: Distributed offsetting receipts, prior year (26,162) -

Net Obligations 129,264 174,173

Other Resources

Imputed financing from costs absorbed by others 28,032 35,114

Non-Exchange Revenue 373 165

Funds returned to U.S. Treasury General Fund (373) (165)

Net Other Resources Used to Finance Activities 28,032 35,114

Total Resources Used to Finance Activities 157,296 209,287

Resources Used to Finance Items Not Part of the Net Cost of Operations (3,208) (44,118)

Total Resources Used to Finance the Net Cost of Operations 154,088 165,169

Components of the Net Cost of Operations that will not require or generate 

resources in the current period 28,537 (5,137)

Net Cost of Operations $ 182,625 $ 160,032

Distributed offsetting receipts collected and transferred to the Treasury in FY 2015 consisted of $885.3 million to offset 

the FY 2015 appropriation and $26.2 million to offset the FY 2014 appropriation.

Note 17 – Contingencies

The NRC is subject to potential liabilities in various administrative proceedings, legal actions, environmental suits, and 

claims brought against it. In the opinion of the NRC’s management and legal counsel, the ultimate resolution of these 

proceedings, actions, suits, and claims will not materially affect the financial position or net costs of the NRC.

Reasonably Possible Likelihood of an Adverse Outcome:

As of September 30, 2015, the NRC was a party to a case in which an adverse outcome was reasonably possible. The 

upper range of the loss on the potential liability is $21.3 million as of the end of FY 2015.
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Combining Statement of Budgetary Resources (in thousands)

For the fiscal years ended September 30, 2015 Salaries and 

Expenses

Office of 

Inspector 

General

Nuclear 

Facility Fees Total

Budgetary Resources

Unobligated balances, brought forward, October 1 $ 50,843 $ 2,618 $ 3 $ 53,464

Recoveries of prior-year obligations

Actual 5,036 11 - 5,047

Unobligated balance from prior-year budget authority, net 55,879 2,629 3 58,511

Appropriations 1,003,233 12,071 (3) 1,015,301

Spending authority from offsetting collections 7,991 10 - 8,001

Total Budgetary Resources $ 1,067,103 $ 14,710 $ - $ 1,081,813

Status of Budgetary Resources

Obligations incurred (Note 12) $ 1,041,381 $ 12,432 $ - $ 1,053,813

Unobligated balance, end of period

Apportioned 20,985 2,274 - 23,259

Exempt from apportionment 2,837 - - 2,837

Unapportioned 1,900 4 - 1,904

Unobligated balance, end of period 25,722 2,278 - 28,000

Total Status of Budgetary Resources $ 1,067,103 $ 14,710 $ - $ 1,081,813

Change in Obligated Balance

Unpaid obligations

Unpaid obligations, brought forward, October 1 $ 324,913 $ 963 $ - $ 325,876

Obligations incurred (Note 12) 1,041,381 12,432 - 1,053,813

Outlays, gross (1,035,454) (11,536) - (1,046,990)

Recoveries of prior-year unpaid obligations (5,036) (11) - (5,047)

Total unpaid obligations, end of period $ 325,804 $ 1,848 $ - $ 327,652

Uncollected payments

Uncollected customer payments from Federal sources, brought 

forward, October 1 $ (1,949) $ - $ - $ (1,949)

Change in uncollected customer payments, from 135 - - 135

Federal sources

Total uncollected customer payments, from Federal sources $ (1,814) $ - $ - $ (1,814)

Memorandum entries:

Obligated balances, start of year $ 322,964 $ 963 $ - $ 323,927

Obligated balances, end of period $ 323,990 $ 1,848 $ - $ 325,838

Budget Authority and Outlays, Net

Budget Authority, gross $ 1,011,224 $ 12,081 $ (3) $ 1,023,302

Actual offsetting collections (8,126) (10) - (8,136)

Change in uncollected customer payments, from Federal sources 135 - - 135

Budget Authority, Net $ 1,003,233 $ 12,071 $ (3) $ 1,015,301

Outlays, gross $ 1,035,454 $ 11,536 $ - $ 1,046,990

Actual offsetting collections (8,126) (10) - (8,136)

Outlays, net 1,027,328 11,526 - 1,038,854

Distributed offsetting receipts - - (911,501) (911,501)

Agency Outlays, Net $ 1,027,328 $ 11,526 $ (911,501) $ 127,353

Required supplementary information
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Combining Statement of Budgetary Resources (in thousands)

For the fiscal years ended September 30, 2014 Salaries and 

Expenses

Office of 

Inspector 

General

Nuclear 

Facility Fees Total

Budgetary Resources

Unobligated balances, brought forward, October 1 $ 41,411 $ 1,368 $ - $ 42,779

Recoveries of prior-year obligations

Actual 10,223 377 - 10,600

Unobligated balance from prior-year budget authority, net 51,634 1,745 - 53,379

Appropriations 1,043,937 11,955 3 1,055,895

Spending authority from offsetting collections 9,800 2 - 9,802

Total Budgetary Resources $ 1,105,371 $ 13,702 $ 3 $ 1,119,076

Status of Budgetary Resources

Obligations incurred (Note 12) $ 1,054,528 $ 11,084 $ - $ 1,065,612

Unobligated balance, end of period

Apportioned 45,861 2,618 - 48,479

Exempt from apportionment 4,813 - 3 4,816

Unapportioned 169 - - 169

Unobligated balance, end of period 50,843 2,618 3 53,464

Total Status of Budgetary Resources $ 1,105,371 $ 13,702 $ 3 $ 1,119,076

Change in Obligated Balance

Unpaid obligations

Unpaid obligations, brought forward, October 1 $ 278,098 $ 714 $ - $ 278,812

Obligations incurred (Note 12) 1,054,528 11,084 - 1,065,612

Outlays, gross (997,490) (10,458) - (1,007,948)

Recoveries of prior-year unpaid obligations (10,223) (377) - (10,600)

Total unpaid obligations, end of period $ 324,913 $ 963 $ - $ 325,876

Uncollected payments

Uncollected customer payments from Federal sources, brought 

forward, October 1

$ (3,517) $ - $ - $ (3,517)

Change in uncollected customer payments, from Federal sources 1,568 - - 1,568

Total uncollected customer payments, from Federal sources $ (1,949) $ (1,949)

Memorandum entries:

Obligated balances, start of year $ 274,581 $ 714 $ - $ 275,295

Obligated balances, end of period $ 322,964 $ 963 $ - $ 323,927

Budget Authority and Outlays, Net

Budget Authority, gross $ 1,053,737 $ 11,957 $ 3 $ 1,065,697

Actual offsetting collections (11,199) (2) - (11,201)

Change in uncollected customer payments, from Federal sources 1,568 - - 1,568

Budget Authority, Net $ 1,044,106 $ 11,955 $ 3 $ 1,056,064

Outlays, gross $ 997,490 $ 10,458 $ - $ 1,007,948

Actual offsetting collections (11,199) (2) - (11,201)

Outlays, net 986,291 10,456 - 996,747

Distributed offsetting receipts - - (871,206) (871,206)

Agency Outlays, Net $ 986,291 $ 10,456 $ (871,206) $ 125,541
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Deferred Maintenance and 

Repairs

Deferred Maintenance and Repairs 

for General Property, Plant, and

Equipment (PP&E)

Deferred maintenance and repairs information is a 

requirement under SFFAS No. 42, Deferred Maintenance 

and Repairs (DM&R).

The SFFAS No. 42 defines DM&R as “maintenance and 

repairs that were not performed when they should have 

been or were scheduled to be and which are put off or 

delayed for a future period.” Maintenance and repairs 

(M&R) are defined as activities directed toward keeping 

fixed assets in an acceptable condition. Activities include 

preventive maintenance; replacement of parts, systems, 

or components; and other activities needed to preserve 

or maintain the asset. M&R, as distinguished from 

capital improvements, exclude activities directed towards 

expanding the capacity of an asset or otherwise upgrading 

it to serve needs different from, or significantly greater 

than, its current use.

DM&R should include funded and unfunded M&R 

activities that have been delayed to a future period. 

DM&R on inactive and/or excess general property, plant, 

and equipment (G-PP&E) should be included to the 

extent that it is required to maintain inactive or excess 

G-PP&E in acceptable condition.

The NRC has performed an evaluation of DM&R activities 

for leased facilities, the multiple components of the agency 

IT infrastructure, and individual capital asset purchases 

with a cost equal to or greater than $50,000. The NRC did 

not include noncapitalized PP&E with a cost of less than 

$50,000, which are deemed immaterial.

Deferred Maintenance and Repairs 

for the NRC Facilities, Other

Structures, and Capital Equipment

The NRC has no DM&R for the NRC facilities, 

other structures, and equipment for the years ending 

September 30, 2015 and 2014.

Defining and Implementing M&R 

Policies in Practice

For the NRC leased facilities and capital equipment 

purchases, the NRC typically does not have any deferred 

maintenance or repairs. The NRC had no DM&R for 

Facilities, Other Structures, and Capital Equipment in 

FY 2015 and FY 2014.

For the Headquarters facilities, the NRC uses the GSA 

guidelines for maintenance activities along with industry 

best practices to determine the preventative maintenance 

activities to perform and the schedule for those activities. 

For the building structures and systems, the maintenance 

contractor performs all required periodic maintenance 

to keep the systems and buildings in a good state of 

repair. The contractor is held to a 98 percent scheduled 

completion rate with all the preventative maintenance 

completed within a reasonable time. When equipment 

reaches the end of its useful life, it is generally replaced 

with like kind or upgraded equipment. For any type of 

an emergent failure to facilities, the NRC would request 

additional funding, as needed, for repairs or replacement 

to structures and equipment.

For the regional offices, the building management (lessor) 

is responsible for performing all required periodic 

maintenance to keep the systems and buildings in a good 

state of repair. Generally, fixed assets are contained 

within the regional leases, including equipment purchased 

to support the operations of our leased space, such as 

diesel generators and chillers for the Incident Response 

Center (IRC), and the Local Area Network (LAN) and 

power cooling. Equipment requiring repair results in a 

service repair call. For those instances where equipment 

is purchased to support the NRC regional operations, 

maintenance contracts are put in place to provide periodic 

service and maintenance on the equipment. When 

equipment reaches the end of its useful life, it is generally 

replaced with like kind or with upgraded equipment. For 

any type of an emergent failure, the NRC would request 

additional funding, as needed, for repairs or replacement 

of equipment.

The TTC facility and associated systems are leased and 

maintained by the lessor. This includes any emergent 

repairs that may occur, as well as any scheduled 
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106

maintenance. Assets within the TTC are predominantly 

maintained by facilities personnel or in some cases, such 

as simulator systems, contractor personnel perform all 

required emergent and periodic maintenance to keep 

the simulator systems in a good state of repair. When 

equipment reaches the end of its useful life, it is replaced 

with like kind or upgraded equipment.

Ranking and Prioritization of M&R 

Activities

Personnel safety is a priority at the NRC leased facilities. 

Maintenance activity, such as fire alarms and emergency 

exits, are given top priority. If a preventative maintenance 

activity must be deferred, which is typically only for 2 

to 4 weeks, the impact to personnel safety and building 

functionality are considered during the review. Other 

maintenance and repair activities are executed as required 

so that there is no disruption to the NRC operations and 

the TTC training schedules.

Factors Considered in Determining

Acceptable Condition

The NRC has a Facilities Management Branch at the 

headquarters facilities to perform the daily inspections 

and maintenance of the buildings and major systems. The 

NRC internally reviews planned maintenance activity 

records and historical logs of maintenance and repairs 

to monitor condition information on equipment. Based 

on the information gathered, the NRC will determine 

if planning for replacement or upgrade is needed. 

Additionally, the GSA conducts onsite inspections every 

3 to 5 years at the headquarters facilities to assess the 

overall condition of the buildings and to determine when 

major systems and components need to be scheduled for 

replacement. For the TTC and regional offices, the NRC 

has a Facilities Management staff person onsite to work 

with the GSA to manage the buildings with support from 

the lessors. As a result, the GSA performs more frequent 

onsite inspections of the facilities. The NRC works in 

close coordination with GSA to ensure maintenance and 

repair activities are performed on a timely basis to all 

NRC-occupied facilities.

Deferred Maintenance and Repairs 

for Information Technology (IT) 

Infrastructure and Systems 

The NRC IT infrastructure is a network of multiple 

equipment, software, and service components, taken 

as a whole, which provides the critical communication 

network that allows the NRC to accomplish its mission. 

The NRC IT infrastructure encompasses the following:

• End-User Systems and Support and End User hardware 

includes desktop, laptop, handheld devices, peripherals 

(local printers, shared printers), software (personal 

computer operating systems, office automation suites, 

messaging, and groupware), and hardware and software 

for help desks. Also included are network operations 

command centers, wire closets, and cable management. 

For regional offices, this includes regional end-user 

support similar to that provided by the Customer 

Support Center at Headquarters, including contract 

support and FTE.

• Telecommunications Services includes data networks 

and telecommunications (including wireless, 

multimedia, and local and long distance telephony); 

hardware and software operations; licenses; 

maintenance; and backup, continuity of operations, and 

disaster recovery. For regional offices, this includes 

local telecommunications, including contract support 

and FTE.

• Production Operations includes mainframes and 

servers (including Web hosting, but not Web content 

development and management); hardware and 

software operations; licenses; maintenance; and 

backup, continuity of operations, and disaster recovery. 

Also included are Homeland Security Presidential 

Directive-12 resources, which requires all Federal 

Executive Departments and Agencies to implement a 

governmentwide standard for secure and reliable forms 

of identification for access to Federal facilities and 

information systems.
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107

The NRC relies on the asset Project and Program 

Managers to execute the maintenance budget and to 

establish and modify the M&R schedule as needed. 

Ranking factors that may impact the M&R schedule 

include personnel safety, age of the asset, scheduled 

replacement date, budget constraints, and unforeseen or 

unexpected events.

Additionally, for IT systems, whether computer-off-theshelf or internally developed software, the NRC relies on 

the Project Manager and Program office to establish an 

M&R budget and schedule. Minor repairs, enhancements, 

and upgrades are completed internally through the 

regular M&R operations process. For major upgrades and 

replacement systems, the Project Manager must submit 

a request to perform the work to the appropriate IT 

governance boards for their approval.

Defining and Implementing M&R 

Policies in Practice

All of the NRC IT infrastructure M&R activities are 

performed under various contracts. For example, the 

main IT infrastructure and support services contract 

(ITISS) includes leasing of servers, computers, printers, 

and software; and provides provisions for periodic 

monitoring, maintenance, and repairs. Replacement of 

miscellaneous equipment components and software are 

scheduled for replacement as needed when the equipment 

reaches the end of its useful life and before the equipment 

and software become obsolete. Desktops and laptops are 

upgraded on a 3-year rolling schedule such that they do 

not become obsolete.

Ranking and Prioritization of M&R 

Activities

The NRC program managers determine the requirements 

for ranking, scheduling, and performing IT infrastructure 

M&R activities and include them in the contractor 

statement of work. For the critical ITISS contract, the 

main ranking factor is the age of the asset (e.g. desktop, 

laptop, printer, BlackBerry, etc.), followed by cost/budget 

constraints. However, when applicable, personnel safety is 

considered and is the highest priority.

Factors Considered in Determining

Acceptable Condition

In determining acceptable condition, the NRC mainly 

considers the asset’s age, remaining useful life, and 

compatibility with current and required software.
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INSPECTOR GENERAL’S LET TER TRANSMITTING

INDEPENDENT AUDITORS’ REPORT

UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

November 13, 2015

MEMORANDUM TO: Chairman Burns

FROM: Hubert T. Bell /RA/

Inspector General

SUBJECT: RESULTS OF THE AUDIT OF THE UNITED STATES 

NUCLEAR REGULATORY COMMISSION'S FINANCIAL 

STATEMENTS FOR FISCAL YEARS 2015 AND 2014 

(OIG-16-A-04)

The Chief Financial Officers Act of 1990, as amended (CFO Act), requires the Inspector 

General (IG) or an independent external auditor, as determined by the IG, to annually 

audit the United States Nuclear Regulatory Commission’s (NRC) financial statements in 

accordance with applicable standards. In compliance with this requirement, the Office 

of the Inspector General (OIG) retained CliftonLarsonAllen, LLP (CLA), to conduct this 

annual audit. Transmitted with this memorandum are the following CLA reports:

 Opinion on the Principal Statements.

 Opinion on Internal Control.

 Compliance with Laws and Regulations.

NRC’s Performance and Accountability Report includes comparative financial 

statements for FY 2015 and FY 2014. 

Objective of a Financial Statement Audit

The objective of a financial statement audit is to determine whether the audited entity’s 

financial statements are free of material misstatement. An audit includes examining, on 

a test basis, evidence supporting the amounts and disclosures in the financial 

statements. An audit also includes assessing the accounting principles used and 

significant estimates made by management as well as evaluating the overall financial 

statement presentation.
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109

CLA’s audit and examination were made in accordance with auditing standards 

generally accepted in the United States of America; standards applicable to the financial 

audits, contained in Government Auditing Standards issued by the Comptroller General 

of the United States; attestation standards established by the American Institute of 

Certified Public Accountants; and Office of Management and Budget (OMB) Bulletin No. 

15-02, Audit Requirements for Federal Financial Statements. The audit included, 

among other things, obtaining an understanding of NRC and its operations, including 

internal control over financial reporting; evaluating the design and operating 

effectiveness of internal control and assessing risk; and testing relevant internal controls 

over financial reporting. Because of inherent limitations in any internal control, 

misstatements due to error or fraud may occur and not be detected. Also, projections of 

any evaluation of the internal control to future periods are subject to the risk that the 

internal control may become inadequate because of changes in conditions, or that the 

degree of compliance with the policies, or procedures may deteriorate.

FY 2015 Audit Results

The results are as follows:

Financial Statements

 Unmodified opinion.

Internal Controls

 Unqualified opinion.

Compliance with Laws and Regulations

 No reportable instances of noncompliance/no substantial noncompliance 

noted.

Office of the Inspector General Oversight of CLA Performance

To fulfill our responsibilities under the CFO Act and related legislation for ensuring the 

quality of the audit work performed, we monitored CLA’s audit of NRC’s FY 2015 and 

FY 2014 financial statements by:

 Reviewing CLA’s audit approach and planning.

 Evaluating the qualifications and independence of CLA’s auditors.

 Monitoring audit progress at key points.

 Examining the working papers related to planning and performing the audit and 

assessing NRC’s internal controls.
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110

 Reviewing CLA’s audit reports to ensure compliance with Government Auditing 

Standards and OMB Bulletin No. 15-02.

 Coordinating the issuance of the audit reports.

 Performing other procedures deemed necessary.

CLA is responsible for the attached auditor’s reports, dated November 6, 2015, and the 

conclusions expressed therein. OIG is responsible for technical and administrative 

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

oversight, 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:

 NRC’s financial statements.

 The effectiveness of NRC’s internal control over financial reporting.

 NRC’s compliance with laws and regulations.

However, our monitoring review, as described above, disclosed no instances where 

CLA did not comply, in all material respects, with applicable auditing standards.

Meeting with the Chief Financial Officer

At the exit conference on November 9, 2015, representatives of the Office of the Chief 

Financial Officer, OIG, and CLA discussed the results of the audit.

Comments of the Chief Financial Officer

In her response, the Chief Financial Officer (CFO) agreed with the report. The full text 

of the CFO’s response follows this report. 

We appreciate NRC staff’s cooperation and continued interest in improving financial 

management within NRC.

Attachment: As stated

cc: Commissioner Svinicki

Commissioner Ostendorff

Commissioner Baran

M. Wylie, OCFO

F. Brown, OEDO

B. Pham, OEDO

H. Rasouli, OEDO

J. Jolicoeur, OEDO

EDO_ACS Distribution

RidsOCFOMailCenter Resource
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INDEPENDENT AUDITORS’ REPORT

CliftonLarsonAllen LLP 

www.cliftonlarsonallen.com

INDEPENDENT AUDITORS’ REPORT

Inspector General 

United States Nuclear Regulatory Commission 

Chairman 

United States Nuclear Regulatory Commission 

Report on the Financial Statements

We have audited the accompanying financial statements of the United States Nuclear Regulatory 

Commission (NRC), which comprise the balance sheets as of September 30, 2015 and 2014, and the 

related statements of net cost, changes in net position, and budgetary resources for the years then 

ended, and the related notes to the financial statements (financial statements). 

Management’s Responsibility for the Financial Statements

NRC management is responsible for the preparation and fair presentation of these financial 

statements in accordance with accounting principles generally accepted in the United States of 

America (U.S.); this includes the design, implementation, and maintenance of internal control relevant 

to the preparation and fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error. 

Auditors’ Responsibilities 

Our responsibility is to express an opinion on these financial statements based on our audits. We 

conducted our audits of the financial statements in accordance with auditing standards generally 

accepted in the U.S., the standards applicable to the financial audits contained in Government 

Auditing Standards, issued by the Comptroller General of the United States, and Office of 

Management and Budget (OMB) Bulletin No. 15-02, Audit Requirements for Federal Financial 

Statements (OMB Bulletin 15-02). Those standards and OMB Bulletin 15-02 require that we plan and 

perform the audits to obtain reasonable assurance about whether the financial statements are free 

from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures 

in the financial statements. The procedures selected depend on the auditors’ judgment, including the 

assessment of risks of material misstatement of the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s 

preparation and fair presentation of the financial statements in order to design audit procedures that 

are appropriate in the circumstances. An audit of financial statements also involves evaluating the 

appropriateness of the accounting policies used and the reasonableness of significant accounting
C h a p t e r 3 n Financial Statements and Auditors’ Report

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INDEPENDENT AUDITORS’ REPORT, CONTINUED 

estimates made by management, as well as evaluating the overall presentation of the financial 

statements. We believe that the audit evidence we have obtained is sufficient and appropriate to 

provide a basis for our audit opinion. 

Opinion on the Financial Statements

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the United States Nuclear Regulatory Commission as of September 30, 2015 and 

2014, and its net costs, changes in net position, and budgetary resources for the years then ended, in 

accordance with accounting principles generally accepted in the U.S. 

Other Matters 

Required Supplementary Information 

Accounting principles generally accepted in the U.S. issued by the Federal Accounting Standards 

Advisory Board (FASAB) require that NRC’s Management Discussion and Analysis (MD&A), and 

other Required Supplementary Information (RSI) including the Combining Statement of Budgetary 

Resources, and Deferred Maintenance and Repairs, be presented to supplement the financial 

statements. Such information, although not a part of the financial statements, is required by FASAB, 

which considers it to be an essential part of financial reporting for placing the financial statements in 

an appropriate operational, economic, or historical context. We have applied certain limited 

procedures to the MD&A and other RSI in accordance with auditing standards generally accepted in 

the U.S., which consisted of inquiries of management about the methods of preparing the information 

and comparing the information for consistency with management's responses to our inquiries, the 

financial statements, and other knowledge we obtained during our audit of the financial statements. 

We do not express an opinion or provide any assurance on the RSI because the limited procedures 

do not provide us with sufficient evidence to express an opinion or provide any assurance. 

Other Information 

Our audit was conducted for the purpose of forming an opinion on the financial statements as a 

whole. The FY 2015 Performance and Accountability Report contains other information including the 

cover, table of contents, Message from the Chairman, Chapter 2 (Program Performance), Message 

from the Chief Financial Officer, the Inspector General’s letter transmitting the Independent Auditors’ 

Report, management’s response to the audit report, and Chapter 4 (Other Information). This 

information is presented for purposes of additional analysis and is not a required part of the financial 

statements or RSI. This other information has not been subjected to the auditing procedures applied 

in the audit of the financial statements, and accordingly, we do not express an opinion or provide any 

assurance on it. 

Report on Internal Control Over Financial Reporting 

We have audited NRC’s internal control over financial reporting as of September 30, 2015, based on 

criteria established under 31 U.S.C. 3512 (c), (d), commonly known as the Federal Managers’ 

Financial Integrity Act of 1982 (FMFIA) and OMB Circular A-123, Management’s Responsibility for 

Internal Control, as amended (OMB Circular A-123). 

Management’s Responsibility for Internal Control 

NRC management is responsible for maintaining effective internal control over financial reporting and 

for its statement of assurance on the effectiveness of internal control over financial reporting. 
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Auditors’ Responsibilities 

Our responsibility is to express an opinion on NRC’s internal control over financial reporting based on 

our audit. We conducted our audits of internal control over financial reporting in accordance with 

attestation standards established by the American Institute of Certified Public Accountants and 

contained in Government Auditing Standards.

An audit of internal control over financial reporting includes obtaining an understanding of internal 

control over financial reporting, assessing the risk that a material weakness exists, and evaluating the 

design, and testing the operating effectiveness of internal control over financial reporting based on 

the assessed risk. Our audits also included performing such other procedures as we considered 

necessary in the circumstances. 

Definition and Inherent Limitations of Internal Control Over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged by 

governance, management, and other personnel, designed to provide reasonable assurance that (1) 

transactions are properly recorded, processed, and summarized to permit the preparation of financial 

statements in accordance with accounting principles generally accepted in the U.S.; (2) assets are 

safeguarded against loss from unauthorized acquisition, use, or disposition; and (3) transactions are 

executed in accordance with laws governing the use of budget authority and other applicable laws, 

regulations, contracts, and grant agreements that could have a direct and material effect on the 

financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or detect 

and correct, misstatements due to fraud or error. We also caution that projecting our audit results to 

future periods is subject to the risk that controls may become inadequate because of changes in 

conditions or that the degree of compliance with controls may deteriorate. 

Opinion on Internal Control Over Financial Reporting

In our opinion, NRC maintained, in all material respects, effective internal control over financial 

reporting as of September 30, 2015, based on criteria established under FMFIA and OMB Circular A123.

Report on Compliance Based on an Audit of Financial Statements Performed in Accordance 

With Government Auditing Standards 

Compliance With Laws, Regulations, Contracts and Grant Agreements 

As part of obtaining reasonable assurance about whether NRC’s financial statements are free from 

material misstatement, we performed tests of NRC’s compliance with certain provisions of laws, 

regulations, contracts, and grant agreements consistent with our professional responsibilities 

discussed below. The results of our tests for the year ended September 30, 2015, disclosed no 

instances of noncompliance that are required to be reported in accordance with Government Auditing 

Standards.

Systems Compliance With the Federal Financial Management Improvement Act (FFMIA)

Requirements 

Under FFMIA, we are required to report whether the financial management systems used by NRC 

substantially comply with the (1) Federal financial management systems requirements, (2) applicable 
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INDEPENDENT AUDITORS’ REPORT, CONTINUED 

Federal accounting standards, and (3) the United States Standard General Ledger (USSGL) at the 

transaction level. To meet this requirement, we performed tests of compliance with FFMIA Section 

803(a) requirements. However, providing an opinion on compliance with FFMIA was not an objective 

of our audit, and accordingly, we do not express such an opinion. The results of our tests of FFMIA 

disclosed no instances in which NRC’s financial management systems did not substantially comply 

with (1) Federal financial management systems requirements, (2) applicable Federal accounting 

standards, or (3) the USSGL at the transaction level. 

Management’s Responsibility for Compliance

Management is responsible for ensuring NRC’s financial management systems are in substantial 

compliance with FFMIA requirements, and ensuring compliance with other applicable laws, 

regulations, contracts, and grant agreements. 

Auditors’ Responsibilities

We are responsible for testing compliance with certain provisions of laws, regulations, contracts and 

grants that could have a direct effect on the financial statements. 

We did not test compliance with all laws, regulations, contracts, and grant agreements applicable to 

NRC. We limited our tests of compliance to certain provisions of laws, regulations, contracts, and 

grant agreements that could have a direct effect on the financial statements. However, providing an 

opinion on compliance with those provisions was not an objective of our audits, and accordingly, we 

do not express such an opinion. We caution that noncompliance with laws, regulations, contracts, and 

grants may occur and not be detected by these tests and that such testing may not be sufficient for 

other purposes. Also, our work on FFMIA would not necessarily disclose all instances of 

noncompliance with FFMIA requirements. 

Purpose of the Report on Compliance 

The purpose of the Report on Compliance is solely to describe the scope of our testing of compliance 

with laws, regulations, contracts, and grants and the result of that testing, and not to provide an 

opinion on NRC’s compliance. This report is an integral part of an audit performed in accordance with 

Government Auditing Standards in considering NRC’s compliance. Accordingly, this report is not 

suitable for any other purpose. 

Management’s Response to the Independent Auditors’ Report 

Management’s response to our report is presented in the Performance and Accountability Report. 

We did not audit NRC’s response and, accordingly, we express no opinion on it. 

CliftonLarsonAllen LLP 

Arlington, Virginia 

November 6, 2015 
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Management’s response to the independent auditors’ 

report on the financial statements
116 Performance and Accountability Report Performance and Accountability Report nn FFiscal iscal Y Year ear 2015 2015
117

Inspector General’s Assessment of the Most Serious 

Management and Performance Challenges Facing the NRC . . . . . 119

Summary of Financial Statement Audit and 

Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Required Improper Payments Reporting Details . . . . . . . . . . . . . . . 147

Combined Schedule of Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Freeze the Footprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Civil Monetary Penalty Adjustment for Inflation . . . . . . . . . . . . . . . 159

Acronyms and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Bibliographic Data Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Availability of Reference Materials in NRC Publications . . . . . . . . 173

h t t p : / / www.nrc.gov n Protecting People and the Environment 117
118 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 119

CHAPTER 4

INSPEC TOR 

GENERAL’S 

ASSESSMENT 

OF THE MOST 

SERIOUS 

MANAGEMENT 

AND 

PERFORMANCE 

CHALLENGES 

FACING 

THE NRC
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UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

October 1, 2015

MEMORANDUM TO: Chairman Burns

FROM: Hubert T. Bell /RA/

Inspector General

SUBJECT: INSPECTOR GENERAL’S ASSESSMENT OF THE MOST 

SERIOUS MANAGEMENT AND PERFORMANCE 

CHALLENGES FACING THE NUCLEAR REGULATORY 

COMMISSION (OIG-16-A-01)

In accordance with the Reports Consolidation Act of 2000, I am providing what I 

consider to be the most serious management and performance challenges facing the 

U.S. Nuclear Regulatory Commission (NRC) in FY 2016.

INTRODUCTION

NRC is an independent Federal agency established to license and regulate the Nation’s 

civilian use of radioactive materials to ensure adequate protection of public health and 

safety, promote the common defense and security, and protect the environment.

NRC performs critical functions to ensure the safe and secure use of

radioactive materials in the United States and to protect both the public and radiation 

workers from radiation hazards that could result from the use of radioactive materials. 

NRC provides licensing and oversight activities for 99 commercial nuclear power 

reactors. 

NRC’s principal regulatory functions are to establish regulatory requirements and 

conduct confirmatory research to support requirements; issue licenses to facility 

operators and owners, possessors, and users of nuclear materials; oversee these 

licensees to ensure they are in compliance with NRC requirements and operate safely 
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

2

and securely; and respond to emergencies involving regulated activities. NRC also 

participates in international work that is integral to the agency’s mandate to protect 

public health and safety and promote the common defense and security. To carry out 

its mission, NRC’s proposed FY 2016 budget is $1,032.2 million, including 3,754 fulltime equivalent positions.

Based on NRC’s mission and objectives, the Office of the Inspector General (OIG) 

annually identifies what it considers to be the most serious management and 

performance challenges facing NRC. Our goal is to focus attention on these issues to 

enhance the effectiveness of NRC programs and operations.

MANAGEMENT CHALLENGES

The FY 2016 management and performance challenges are directly related to NRC’s 

mission areas (commercial nuclear reactors and nuclear materials), security, 

information technology and information management, financial programs and 

administrative functions. Our work in these areas indicates that while program 

improvements are needed, NRC is continually making progress to address OIG 

recommendations and improve the efficiency and effectiveness of its programs. The FY 

2016 management and performance challenges are as follows:

1. Regulation of nuclear reactor safety programs.

2. Regulation of nuclear materials and radioactive waste programs.

3. Management of security over internal infrastructure (personnel, physical, and cyber 

security) and nuclear security.

4. Management of information technology and information management.

5. Management of financial programs.

6. Management of administrative functions.

These challenges represent what OIG considers to be inherent and continuing program 

challenges relative to maintaining effective and efficient oversight and internal controls. 

As a result, it is likely they will continue to be challenges from year to year. Challenges 

do not necessarily equate to problems. 

Attached is a brief synopsis of each management and performance challenge along 

with summaries of OIG reports that inform the decision process. A complete list of 

reports can be found at http://www.nrc.gov/reading-rm/doc-collections/insp-gen/.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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NRC is responsible for maintaining an established regulatory framework for the safe 

and secure use of civilian nuclear reactors, including commercial nuclear power plants 

as well as research, test, and training reactors. There are currently 99 nuclear power 

plants licensed to operate in the United States, which generate about 20 percent of the 

Nation's electrical use, as well as 5 plants under construction (Vogtle 3 and 4, Summer 

2 and 3, Watts Bar 2). There are also 31 licensed research and test reactors. NRC’s 

regulatory oversight responsibilities in the reactor arena include developing policy and 

rulemaking; licensing and inspecting reactors; licensing reactor operators; and enforcing 

regulations. The agency implements the nuclear reactor safety program with 

approximately 77 percent ($810 million) of its total budget authority and 76 percent

(2,900 full-time equivalent employees) of its total staff. Thus, it is of paramount 

importance that the agency implement these programs as effectively and efficiently as 

possible. 

Key reactor safety oversight challenges for NRC include the following:

 Ensuring an adequate and efficient reactor and operator licensing process, 

accounting for safety impacts of major changes to plant configuration, and 

sufficiently evaluating older plants for license extensions.

 Providing an adequate number of trained inspectors for sufficient oversight, and 

ensuring inspection procedures are adequate and are being followed.

 Ensuring adequate construction oversight of new power reactors, adequately 

reviewing and approving design changes that are occurring concurrent with the 

construction, and verifying whether plants are built in accordance with the 

intended design.

 Ensuring appropriate and reasonable application of the agency’s Reactor 

Oversight Process, Construction Reactor Oversight Process, Significance 

Determination Process for determining regulatory violation severity, safety culture

policy, and Alternative Dispute Resolution.

 Incorporating operational experience from the domestic and international nuclear 

industries into NRC’s regulatory program, including lessons learned from 

Fukushima and other events. 

The following audit report synopses are examples of work that OIG has completed or is 

ongoing pertaining to nuclear reactor safety programs. 

1. Regulation of nuclear reactor safety programs.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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Audit of NRC’s Task Interface Agreement Process

OIG-15-A-05, November 25, 2014

NRC’s Office of Nuclear Reactor Regulation (NRR) is responsible for a broad range of 

regulatory activities in the licensing and oversight of commercial nuclear power reactors to 

protect public health and safety and the environment. NRR works with the NRC regions and 

other offices to accomplish its mission, including providing technical assistance to the 

regions and other offices. A Task Interface Agreement (TIA) is one such form of technical 

assistance that NRR provides the regions and other offices. A TIA is a request for NRR 

technical assistance from other NRC organizations and contains questions on subjects 

involving regulatory or policy interpretations, specific plant events, or inspection findings.

Ensuring that adequate, appropriate, and timely feedback is provided to the requesting 

organization is central to the agency’s mission to protect public health and safety and the 

environment.

Our review found that NRC regional and office staff requesting technical assistance from 

NRR are generally satisfied with the technical content provided through the TIA process. 

However, there are concerns regarding the efficiency of the process and, conceivably, long 

overdue TIAs could be regarded as eroding overall effectiveness of the TIA process. 

Roughly one-third of TIA requests are not resolved and communicated in a timely manner 

because NRC lacks controls to ensure TIA timeliness performance measures are met. 

Failure to meet timeliness performance measures degrades the agency’s safety oversight 

mission as well as overall program effectiveness and accountability. The agency agreed with 

the report’s findings and recommendations and is in the process of developing new 

performance measures that will serve as internal controls to ensure TIA timeliness.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1432/ML14329A081.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

5

Audit of NRC’s Construction Reactor Oversight Process

OIG-15-A-14, June 16, 2015

NRC licenses and oversees new nuclear power reactor construction. Four reactors are 

being built under combined licenses issued in accordance with Title 10, Code of Federal 

Regulations, Part 52, Licenses, Certifications, and Approvals for Nuclear Power Plants. Two 

of the new reactors are in Georgia (Vogtle) and two in South Carolina (Summer). A fifth 

reactor, Watts Bar 2 is being built under the regulations for 10 CFR Part 50. NRC uses the 

Construction Reactor Oversight Process (cROP), a matrix-based tool for evaluating the 

quality of construction, to oversee construction of new nuclear power reactors licensed 

under Part 52. The audit objective was to assess the efficiency and effectiveness of NRC’s 

Construction Reactor Oversight Process. 

Our review found that NRC needs to improve efficiency when adjusting to construction 

inspection schedules and revising inspection guidance. In Fiscal Year 2014, regional 

construction inspection staff spent approximately 60 percent of time on administrative 

program support activities such as adjusting to licensee construction schedules and revising 

SmartPlans rather than conducting inspections. NRC relies on Construction inspection staff 

for monitoring and adjusting to construction schedule changes because schedules provided 

by licensees do not contain real-time information as originally envisaged. Further, the 

process for approving SmartPlan revisions is dominated by multiple levels of review by 

individuals who do not necessarily need to participate in the review. Agency efforts to 

identify process inefficiencies are not comprehensive and has left the agency unable to 

identify process and functional redundancies, overlap, and gaps. As the pace of new 

reactor construction increases, unaddressed administrative inefficiencies could affect future 

cROP effectiveness. The agency agreed with the report’s findings and recommendations 

and plans to assess its inspection planning and scheduling processes and monitor these 

programs for further inefficiencies. 

The full report is available at: http://pbadupws.nrc.gov/docs/ML1516/ML15167A491.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

6

Audit of NRC’s Operator Licensing Program for the AP1000 Power Reactor

(Ongoing Audit)

Pursuant to the Atomic Energy Act of 1954, as amended, Title 10, Code of Federal 

Regulations, Part 55 establishes procedures and criteria for the issuance of operator 

licenses to persons who operate commercially owned nuclear power reactors in the United 

States. The AP1000 power reactor is a newly designed system that will be incorporated in 

four nuclear power reactor units currently under construction. Specifically, units 3 and 4 at 

the Vogtle plant in Georgia and units 2 and 3 at the V.C. Summer plant in South Carolina, 

are scheduled to be operational around the 2019–2020 timeframe. 

The new AP1000 power reactor design will require operators to be trained, licensed, and 

qualified to take the controls in accordance with 10 CFR Part 55 when the reactors become 

operational. Each new reactor should have an onsite functional control room simulator for 

training and testing operators that must duplicate the plant as designed and built; however, 

some aspects of the AP1000 designs are incomplete. Consequently, the control room 

simulators may be insufficient for operator licensing when the new nuclear power reactor 

units are expected to be operational. 

OIG’s audit objective is to determine if NRC’s program for licensing AP-1000 reactor 

operators is efficiently and effectively implemented.
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NRC is responsible for maintaining an established regulatory framework for the safe 

and secure use of nuclear materials; medical, industrial, and academic applications; 

uranium recovery, conversion and enrichment activities; fuel fabrication and

development; and, high-level and low-level radioactive waste. NRC is authorized to 

grant licenses for the possession and use of radioactive materials and establish 

regulations to govern the possession and use of those materials. Upon a State’s 

request, NRC may enter into an agreement to relinquish its authority to the State to 

regulate certain radioactive materials and limited quantities of special nuclear material. 

The State must demonstrate that its regulatory program is adequate to protect public 

health and safety and the environment, and compatible with NRC’s program. The 

States that enter into an agreement assuming this regulatory authority from NRC are 

called Agreement States. Currently, there are 37 Agreement States. 

NRC regulates high-level radioactive waste generated from commercial nuclear power 

reactors. High-level radioactive waste is either spent (used) reactor fuel when it is 

accepted for disposal or waste material remaining after spent fuel is reprocessed. 

Since radioactive waste becomes harmless only through decay (which may take 

hundreds of thousands of years for high-level waste), the material must be stored and 

ultimately disposed of in a manner that provides adequate protection of the public for a

very long time. 

Low-level radioactive waste (LLRW) is typically produced at nuclear power reactors, 

hospitals, research facilities, and clinics from the use of nuclear materials for industrial 

and medical purposes. NRC regulates the management, storage, and disposal of 

radioactive waste produced as a result of NRC-licensed activities. LLRW includes 

contaminated protective clothing, equipment and tools, medical supplies, and laboratory 

animal tissues. 

Key nuclear materials and radioactive waste oversight challenges for NRC include the 

following:

 Ensuring that licensing activities are conducted consistent with NRC 

requirements.

2. Regulation of nuclear materials and radioactive waste programs.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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 Providing an adequate number of trained inspectors for sufficient oversight, 

providing adequate inspector training and assessing whether inspection 

procedures are adequate and are being followed.

 Providing effective oversight of licensees’ radioactive materials programs to 

preclude loss or theft.

 

 Ensuring that Agreement State programs are adequate to protect public health 

and safety and the environment, and are compatible with NRC’s program. 

 Providing effective oversight for the safe and secure interim storage of increasing 

quantities of high-level radioactive waste until a permanent repository for highlevel radioactive waste is operational.

 Providing effective oversight of licensee programs for the safe storage and 

disposal of low-level radioactive waste produced as a result of NRC-licensed 

activities. 

The following audit report synopses are examples of work that OIG has completed or is 

ongoing pertaining to nuclear materials and radioactive waste programs. 
C h a p t e r 4 n Inspector General’s Assessment of the Most 

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

9

Audit of NRC’s Oversight of Spent Fuel Pools

OIG-15-A-06, February 10, 2015

There are a total of 93 spent fuel pools for both operating and permanently shutdown nuclear 

power plants in the United States that currently store spent fuel. Recent NRC staff studies 

demonstrating the safety of spent fuel pools and the safety of continued storage of spent fuel 

at reactor sites highlight the need to ensure the safety of pool operations for longer periods 

than originally envisioned. The audit objective was to determine whether NRC’s oversight of 

spent fuel pools and the nuclear fuel they contain provides adequate protection for public 

health and safety, and the environment.

Our review revealed that regulatory uncertainty exists in NRC’s evaluation of spent fuel pool 

criticality safety analyses. In addition, there are gaps in NRC’s spent fuel pool inspection 

program as inspections of spent fuel pools greatly vary between licensee sites and are 

limited in scope. To fulfill its responsibility to protect public health and safety, NRC must 

inspect and assess licensee operations and facilities to ensure compliance with its regulatory 

requirements. NRC should also regulate in a manner that clearly communicates 

requirements and ensures that regulations are consistently applied and are practical. An 

absence of effective spent fuel pool criticality analyses guidance for both licensees and NRC 

staff may lead to a reduction in program efficiency and effectiveness. The agency agreed 

with the report’s findings and recommendations.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1504/ML15041A567.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

10

Audit of NRC’s Oversight of Medical Uses of Nuclear Material

(Ongoing Audit)

Nuclear medicine is the use of radioactive material to provide information about the 

functioning of a person's specific internal organs (diagnostic) or to treat a disease 

(therapeutic). NRC is responsible for overseeing the medical uses of nuclear material 

through its licensing, inspection, and enforcement programs. NRC issues medical use 

licenses to medical facilities, develops guidance and regulations for use by licensees, and 

maintains a committee of medical experts and health care professionals to obtain advice 

about the use of byproduct materials in medicine.

NRC regulations aim to assure radioactive material is used properly in medical diagnosis, 

treatment, and research. The regulations are also meant to assure the safety of patients, 

medical workers, and the public, as well as to protect the environment. These regulations 

require licensees to report any event which fits the definition of a “medical event.” Medical 

events refer to a potential problem with how a medical facility uses radioactive material. 

These events may involve doses to a patient of the wrong amount, the wrong radioactive 

drug, incorrect administration of a drug, or dose to the wrong patient or wrong part of the 

body. On average, there are approximately 40 reported medical events per year out of 

hundreds of thousands of medical procedures involving radioactive material.

The audit objective will be to determine whether NRC’s oversight of medical uses of 

radioactive 
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NRC must remain vigilant with regard to the security of its infrastructure and that of 

nuclear facilities and nuclear materials. NRC must continue to use robust, proactive 

measures to protect its infrastructure – the buildings, personnel, and information – from 

both internal and external threats. Moreover, as the nature of the threat continues to 

evolve, NRC faces challenges with oversight of protecting nuclear facilities and 

materials, the sharing of sensitive information, as well as emergency preparedness and 

incident response.

Key security oversight challenges for NRC include the following:

 Ensuring that cyber security protective measures keep pace with the growing 

threat. Recently, the data breach at OPM that affected NRC employees, targeted 

spear phishing attempts, credential harvesting and attacks of NRC’s public Web 

site have highlighted the importance of protecting these systems as well as the 

difficulty and diligence required to guard against such intrusions. 

 Establishing the insider threat prevention and detection program for detecting, 

deterring, and mitigating insider threats to address safeguarding of classified 

information from exploitation, compromise or unauthorized disclosure. 

 Continuing to pursue the need for new regulations focused on unique 

requirements of decommissioned nuclear power plants, which present different 

safety and security considerations than operating plants.

 Ensuring effective oversight of physical and personnel security at nuclear power 

plants. 

 Executing the Federal Information Security Management Act (FISMA) 

Modernization Act of 2014, to strengthen the security of computer networks. 

The following audit report synopses are examples of work that OIG has completed in 

the security programs. 

3. Management of security over internal infrastructure (personnel, 

physical, and cyber security) and nuclear security.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

12

Independent Evaluation of NRC’s Implementation of the Federal Information Security 

Management Act for Fiscal Year 2014 

OIG-15-A-02 November 13, 2014

NRC has continued to make improvements in its information technology security program and 

progress in implementing the recommendations resulting from previous FISMA evaluations. 

However, we found that continuous monitoring is not performed as required. Specifically, we 

found that annual risk management activities in support of continuous monitoring were either 

delayed or not performed at all. In addition, system security plans, including the NRC 

Information Security Program Plan (ISPP), were not updated to reflect changes to National 

Institute of Standards and Technology (NIST) Special Publication (SP) 800-53, Security and 

Privacy Controls for Federal Information Systems and Organizations, with the issuance of 

Revision 4 in April 2013. As a result, NRC cannot ensure the effectiveness of information 

security controls for NRC systems and cannot identify and control risk. 

To improve the agency’s implementation of FISMA, we made a recommendation to develop a 

plan and schedule for updating system security plans, as well as the ISPP, to reflect NIST SP 

800-53. We also identified two repeat findings from previous FISMA evaluations. These 

included that configuration management procedures are still not consistently implemented and 

plans of action and management still needs improvement. The agency agreed with our findings 

and recommendations and is working towards implementing the recommendations to 

strengthen FISMA compliance.

The full report is available at http://pbadupws.nrc.gov/docs/ML1432/ML14323A321.pdf
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Audit of NRC’s Communications Security (COMSEC) Program 

OIG-14-A-21 September 29, 2014 

COMSEC equipment at NRC is used to communicate sensitive and classified information and is 

a vital link for secure communication. NRC headquarters, region offices, and resident inspectors 

use a mix of classified and unclassified COMSEC equipment. As of August 2014, NRC had 696 

COMSEC items in its inventory. In Fiscal Year 2013 (the most current year for which data were 

available during this audit), NRC spent $3,622,500 on classified information systems, which 

included COMSEC equipment.

The Office of the Inspector General evaluated NRC staff’s management of the COMSEC 

program in accordance with Federal and agency policies. Based on this work, auditors did not 

identify instances where staff mismanaged the COMSEC program, or classified and sensitive 

information was disclosed to unauthorized personnel. However, opportunities exist to improve 

the COMSEC emergency plans and management of equipment maintenance contracting. 

COMSEC Emergency Plans: Federal Government COMSEC policy states that emergency 

plans must be documented and maintained, and that staff must be aware of plans for the 

accounting and protection of COMSEC materials during emergencies. NRC has not fully 

complied with Federal Government COMSEC emergency planning requirements. This occurs 

because of inconsistent management emphasis on updating plans and informing personnel 

of their responsibilities. As a result, NRC staff who manage and use COMSEC equipment may 

not be prepared to uphold their COMSEC responsibilities during emergency situations such as 

natural disasters or hostile actions against their facilities. 

Inadequate Maintenance: Federal and NRC guidance provides criteria for procurement and 

resource management that emphasizes efficient and effective resource use. Although NRC has 

a contract in place for secure fax maintenance, auditors observed a 60-percent malfunction rate 

across the agency’s inventory of secure fax machines. The high malfunction rates of NRC’s 

secure fax machines are attributable to a lack of performance-based contract terms that reflect 

the agency’s equipment readiness requirements. 

While no NRC staff faced immediate harm because of malfunctioning secure fax machines, the 

quarterly testing and compensating maintenance work performed by staff on these machines is 

an inefficient use of agency resources. The agency agreed with the report’s findings and 

recommendations and is working to fix the identified vulnerabilities. 

The full report is available at: http://pbadupws.nrc.gov/docs/ML1427/ML14272A359.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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14

Technology advances rapidly. New technologies such as cloud, virtualization, and 

mobility are tools that can be implemented. The challenge is deciding which of these 

new technologies will work to the best interest of NRC now.

The mission of NRC’s information technology/information management (IT/IM) program 

is to manage information and employ information technology to enhance information 

access and strengthen agency performance. The most important goal of NRC’s IT/IM 

program is effective information access—enabling both NRC staff and the public to 

quickly and easily obtain the information they need. This goal reflects NRC’s 

commitment to openness and is essential for effective agency operations. 

Key information technology and information management challenges for NRC include 

the following:

 Ensuring that information is protected and meets user requirements.

 Implementing and optimizing technology across NRC such as mobile computing, 

Web-based applications, and IT security.

 Implementing The Federal Information Technology Acquisition Reform Act of 

2014, which enhances the Chief Information Officers authorities. 

The following audit report synopses are examples of work that OIG has completed or is 

ongoing pertaining to the IT/IM programs.

4. Management of information technology and information 

management.
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15

Audit of Web Based Licensing System 

OIG-15-A-17 June 29, 2015

The Web Based Licensing (WBL) system is a materials licensing system that supports the U.S. 

Nuclear Regulatory Commission (NRC) in managing the licensing information of regulated 

entities that use radioactive materials. It was deployed in August 2012. Designed to maintain 

information on materials licensees, WBL supports the entry of licensing information and license 

images that enables managing the licensing life cycle from initial application through license 

issuance, amendment, reporting, and termination.

Use of WBL can be improved to better support effective and efficient operations. Specifically, 

OIG found that varied use of WBL among the NRC regions, outdated business processes, and 

lack of standardization hinder efficiency and effectiveness. OIG concluded that full 

implementation of WBL’s capabilities can unify NRC’s oversight of materials licensees and 

support national efforts to monitor and secure radioactive materials. Management stated their 

general agreement with the findings and recommendations in this report.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1518/ML15180A203.pdf

Audit of NRC’s IT Procurement Process

OIG15-A-09 February 10, 2015

Cost-effective information technology (IT) procurement is critical as the Nuclear Regulatory 

Commission (NRC) aims to provide staff with technology that helps them perform their mission 

and manage information security risk, while also maintaining fiscal discipline in the face of 

declining resources. The need to “innovate with less” is reinforced by trends in NRC’s annual IT 

spending, which decreased from approximately $165 million in fiscal year (FY) 2011 to 

approximately $152 million in FY 2015. This spending supports mission and management data 

systems, such as NRC’s incident response, official agency recordkeeping, and core financial 

accounting systems. Infrastructure services and support—which includes maintenance of NRC 

computer and telecommunication networks across agency headquarters, regional, and resident 

inspector offices—accounts for the largest single line item at $71 million, or 46 percent of NRC’s 

total FY 2015 IT budget.

NRC IT governance groups do not consistently apply investment criteria in reviewing and 

approving staff requests for new technology. Specifically, OIG found cases dating from 2010 to 

the present in which NRC purchased items to meet specific customer needs without 

establishing standardized selection criteria or applying such criteria to business case 

justifications for the procurements. Additionally, staff interviews and internal agency analysis 

corroborate a need for better coordination of IT procurement planning, budgeting, and 

prioritization. Management stated their general agreement with the finding and 

recommendations in this report.

The full report is available at http://pbadupws.nrc.gov/docs/ML1504/ML15042A355.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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Audit of NRC’s Network Security Operations Center (Ongoing Audit) 

The Network Security Operations Center (SOC) is responsible for monitoring, detecting, and 

isolating incidents and the management of the organization’s security products, network 

devices, end-user devices, and systems. This function is performed seven days a week, 24

hours per day. Basically the SOC, is a centralized facility responsible for every aspect of 

security in an organization. 

In July 2015, OIG initiated an audit of NRC’s network Security Operations Center (SOC). The 

audit objective is to determine whether the SOC meets its operational requirements, and to 

assess the effectiveness of SOC coordination with organizations that have a role in securing 

NRC’s network. 
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NRC is required by the Omnibus Budget Reconciliation Act of 1990 to collect fees 

totaling approximately 90 percent of its annual budget authority. The agency’s budget 

authority for FYs 2013 and 2014 was $985.6 million and $1,055.9 million, respectively. 

NRC estimated that $859.6 million for FY 2013 and $916.7 million for FY 2014 should 

be recovered from invoiced fees. NRC is required to establish a schedule of charges 

that fairly and equitably assess the fees to license holders and license applicants. In 

recent years, multiple external stakeholders have questioned NRC’s budget and fees 

structure. To maintain transparency, NRC must continue to implement solid internal 

controls over financial management and reporting.

Key financial management and reporting challenges include the following:

 Developing and implementing the agency’s budget in accordance with Federal 

laws, regulations and guidelines.

 Maintaining a fee structure in accordance with laws and regulations and that is 

fair to agency licensees.

 Improving controls over license fee billing.

 Maintaining effective controls over financial reporting, contracts, and grants.

The following audit report synopses are examples of work that OIG has completed or is 

ongoing pertaining to financial programs.

5. Management of financial programs.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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18

Audit of NRC’s Internal Controls Over Fee Revenue

OIG-15-A-12 March 19, 2015

The agency needs to establish more effective internal controls over the recordation of fee 

revenue. The procedures to identify and capture fee billable staff time and reimbursable 

contractor costs are ineffective and inefficient. Also, the process for validating the accuracy of 

the charges is labor intensive, difficult, and challenging. Controls for setting up timekeeping 

codes and their definitions are inconsistent and not standardized making it difficult for staff to 

identify the correct code for charging time. In addition, controls to prevent errors in selecting 

timekeeping codes for charging staff time can be improved.

Similarly, the overhead cost allocation process also needs improvement. The allocation 

calculation uses data that is unreliable and could produce inaccurate invoices to NRC licensees 

and applicants.

In addition, NRC validation reports and invoices sent to licensees and license applicants do not 

have adequate contractor details regarding services provided and related reimbursable costs. 

Lack of contractor detail in NRC validation reports and invoices sent to licensees and applicants 

increases the risk of billing errors. The agency agreed with the report’s findings and 

recommendations.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1507/ML15078A321.pdf
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19

Audit of NRC’s Decommissioning Funds Program (Ongoing Audit)

Under 10 CFR Part 50.75, NRC must receive reasonable assurances from nuclear reactor 

licensees that funds will be available for the decommissioning process. As of the prior biennial 

reporting and review period (as of December 31, 2012), the Decommissioning Trust Funds 

dedicated to NRC requirements for decommissioning and radiological decontamination totaled 

$45.7 billion. The agency began reviewing biennial decommissioning reports submitted by 

licensees that include information as of December 31, 2014, in the spring of calendar year 2015.

It is important to understand NRC actions to ensure that the licensees have reasonable plans in 

place to make up any shortfalls that exist between the current funded amount and the amount 

estimated as needed by NRC’s two-tiered formula. (The formula can be found in 10 CFR 

50.75(c).) The first tier computes the minimum amount, in 1986 dollars, needed at the time of 

permanent cessation of operations based on reactor type and power level of the reactors. The 

second tier adjusts the amount computed in the first tier, from 1986 dollars to current year 

dollars, based on escalation factors of labor, energy, and burial. OIG and the Government 

Accountability Office previously reported that NRC’s decommissioning formula was developed 

in 1986 and may not reliably estimate adequate decommissioning costs (see Audit Report OIG06-A-07, dated February 6, 2006, http://pbadupws.nrc.gov/docs/ML0603/ML060370376.pdf and 

GAO-12-258, dated April 2012). The audit objectives are to identify opportunities for program 

improvement and determine the adequacy of NRC’s processes for coordinating with licensees 

to address possible shortfalls.
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

20

NRC should continue exploring ways to reduce administrative inefficiencies while 

maintaining the appropriate corporate support to carry out agency operations. During 

FY 2015, NRC workforce totaled approximately 3,700 staff positions. To support the 

agency’s technical staff, NRC provides corporate support services such as contract 

support and multiple human resource programs. Although NRC has implemented 

multiple programs to support agency staff, NRC continues to operate in a Federal 

Government environment of stagnant or reduced agency budgets, and increasing 

pressure to reduce corporate support costs. Because of this, the agency needs to have 

an adequate balance between administrative functions and technical needs. In 

addition, NRC must be able to effectively recruit, train and transfer knowledge to new 

hires. This includes maintaining up-to-date guidance to effectively transfer knowledge 

and train current staff. 

Key NRC corporate support function challenges include the following:

 Reducing related costs while continuing to provide essential administrative 

functions that help the agency carry out its mission.

 Maintaining agency headquarters operations while complying with Federal space 

utilization guidelines and carbon footprint reduction targets.

 Recruiting, training and effectively transferring knowledge to NRC new hires.

 Providing current staff with the training and tools to maintain and/or improve the 

skills needed to effectively perform their jobs.

 Keeping NRC policies and procedures current.

The following audit report synopses are examples of work that OIG has completed that 

pertain to NRC’s administrative functions.

6. Management of administrative functions.
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21

Audit of NRC’s Regulatory Analysis Process

OIG-15-A-15 June 24, 2015

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

of 1974, authorize the Nuclear Regulatory Commission (NRC) to develop regulations that 

licensees must follow to protect public health and safety and the environment, and to promote 

the common defense and security. NRC is authorized to establish by rule, regulation, or order, 

such standards and instructions to govern the possession and use of special nuclear, source, 

and byproduct material. NRC uses regulatory analyses to evaluate proposed rulemaking actions 

to protect public health and safety.

OIG found that the NRC’s knowledge management techniques for regulatory analysis need 

improvement and the agency does not consistently document stakeholder input prior to the 

proposed rule stage. The agency agreed with the report’s findings and recommendations.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1517/ML15175A344.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most 

Serious Management and Performance 

Challenges Facing the NRC

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22

Audit of NRC’s Process for Revising Management Directives

OIG-14-A-19 September 15, 2014

Federal regulations provide that Federal agencies should strive to (1) convey written instructions 

and document agency policies and procedures through effective directives management and (2) 

provide agency personnel with information needed in the right place, at the right time, and in a 

useful format. At NRC, management directives are issued to (1) promulgate internal policies and 

procedures of agencywide interest or application that concern a high profile, mission-critical 

agency function or program and (2) impose substantive requirements on more than one NRC 

office. Management directives do not propose new policy; instead, directives reflect policy 

decisions already made and provide the process and guidance for implementing that policy. 

NRC Management Directive (MD) 1.1, NRC Management Directives System, issued March 18, 

2011, describes the process for issuing and revising directives. These directives are to be 

reviewed and reissued or certified as relevant at least every 5 years (the 5-Year Plan).

Although the agency strives for compliance with MD 1.1, NRC generally is not in compliance 

with keeping MDs accurate and up-to-date. Therefore, opportunities exist to improve program 

efficiency and increase compliance with MD 1.1 by (A) issuing MDs timely and (B) centralizing 

authoritative guidance. The agency agreed with the report’s findings and recommendations.

The full report is available at: http://pbadupws.nrc.gov/docs/ML1425/ML14258A612.pdf
C h a p t e r 4 n Inspector General’s Assessment of the Most Serious 

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IG’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

23

Please Contact:

Email: Online Form

Telephone: 1-800-233-3497

TDD 1-800-270-2787

Address: U.S. Nuclear Regulatory Commission

Office of the Inspector General

Hotline Program

Mail Stop O5-E13

11555 Rockville Pike

Rockville, MD 20852

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

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

this link.

 TO REPORT FRAUD, WASTE, OR ABUSE

 COMMENTS AND SUGGESTIONS
143

CHAPTER 4

SUMMARY OF

FINANCIAL

STATEMENT

AUDIT AND

MANAGEMENT

ASSURANCES
144
C h a p t e r 4 n S u m m a r y o f F i n a n c i a l S tat e m e n t Au d i t a n d 

Management Assurances

h t t p : / / www.nrc.gov n Protecting People and the Environment 145

Summary of Financial Statement Audit for FY 2015

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

None 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

Summary of Management Assurances for FY 2015

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

 Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

None 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

 Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance

New Resolved Consolidated Ending 

Balance

None 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Systems conform to financial management system requirements

Nonconformances Beginning 

Balance

New Resolved Consolidated Ending 

Balance

None 0 0 0 0 0

Total Nonconformances 0 0 0 0 0

Compliance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

1. Systems Requirements No Lack of Substantial 

Compliance Noted

No Lack of Substantial 

Compliance Noted

2. Accounting Standards No Lack of Substantial 

Compliance Noted

No Lack of Substantial 

Compliance Noted

3. U.S. Standard General Ledger at 

the Transaction Level

No Lack of Substantial 

Compliance Noted

No Lack of Substantial 

Compliance Noted
146 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 147

CHAPTER 4

REQUIRED

IMPROPER

PAYMENTS

REPORTING

DETAILS
C h a p t e r 4 n R e q u i r e d I m p r o p e r Pay m e n t s 

Reporting Details

148 Performance and Accountability Report n Fiscal Year 2015

Improper Payments Information 

Act of 2002 Reporting Details

Risk Assessment

The NRC is required to complete assessments 

to determine if any programs were susceptible 

to making significant improper payments in 

accordance with the IPIA as amended by the IPERA 

and the IPERIA. The NRC was not required to 

complete a risk assessment in FY 2015 because the 

results of prior assessments allow the agency to 

conduct risk assessments on a triennial basis. In 

the NRC’s FY 2014 PAR, the NRC reported on the 

results of the improper payment risk assessment 

completed that year. The FY 2014 results are also 

included in the following paragraphs.

The NRC performed a risk assessment as of 

September 30, 2014, to determine which programs 

would require improper payment testing using a 

statistically valid sample. Prior to the passing of 

IPERIA, which further amended IPIA, agencies 

were not required to review intra-governmental 

transactions or payments to employees. IPERIA 

now requires agencies to review payments to 

employees as well as Government charge card 

transactions. Intra-governmental transactions 

remain the lone exception to IPERIA requirements. 

Therefore, management identified commercial 

payments, grants payments, employee payments, 

payroll, and Government charge cards as 

potential areas to test pending results of an IPIA 

risk assessment. In FY 2014, the NRC reviewed 

FY 2013 disbursements of selected programs to 

determine the appropriate threshold to conduct a 

risk assessment and possible testing. For FY 2013, 

total commercial payments were $230,153,040.29; 

total grants payments were $22,035,829.01; total 

employee payments were $24,089,080.17; and total 

payroll payments were $470,363,997.02. The NRC 

did not conduct a risk assessment over its purchase 

card (total disbursements of $3,337,043.45) and 

travel card (total disbursements of $6,386,480.57) 

since disbursement totals for each were below 

$10 million. Conducting a risk assessment over those 

two programs would not produce an error rate that 

would meet the minimum threshold set by OMB 

($10 million and 1.5% of total program payments).

As part of our qualitative and quantitative risk 

assessment, the NRC used its best judgement to 

select samples from each program under review, 

based on the universe of payments, which were 

reconciled to the general ledger. This sample was 

not meant to be statistically valid, as testing was 

performed to support the risk assessment process 

versus conducting full IPIA testing for high-risk 

programs. The testing was further refined through 

the identification of select attributes for each 

program to determine if the right recipient received 

the right payment amount for the right goods or 

services at the right time. 

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 will continue to monitor payment 

processes, in addition to conducting periodic 

reviews of key controls for IPIA programs identified 

by management. The NRC will continue to conduct 

risk assessments on a triennial basis, in accordance 

with the IPIA, as amended by IPERA and IPERIA 

as well as OMB guidance. The next 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. 

Recapture of Improper Payments 

Reporting

A risk assessment was conducted in FY 2014 and 

no improper payments were discovered.  Therefore, 

it was determined that recovery or recapture audits 

continue to not be cost effective. Risk assessments 
C h a p t e r 4 n R e q u i r e d I m p r o p e r Pay m e n t s 

Reporting Details

h t t p : / / www.nrc.gov n Protecting People and the Environment 149

are conducted every 3 years by the NRC as 

required by IPERIA. The FY 2014 risk assessment 

information and conclusions were reported to the 

OMB in October 2015. 

Improper Payment Recaptures without 

Audit Programs

Results for 

fiscal year 2015

Overpayments Recaptured 

outside of Payment Recapture 

Audits

Program or Activity Amount 

Identified

Amount 

Recaptured

Nuclear Regulatory 

Commission – 31000001 $0.03 million $0.03 million

Total $0.03 million $0.03 million

Agency reduction of improper

payments with the Do Not Pay

Initiative

The NRC uses the Treasury’s Do Not Pay (DNP) 

automated tools to monitor and reduce improper 

payments. This process has not resulted in capturing 

any improper payments.

The improper payments are being captured through 

the NRC’s internal controls. The NRC uses the 

Federal Awardees Performance and Integrity 

Information System and other data systems such 

as the Excluded Parties List System (EPLS) and 

financial reports to establish whether a contractor 

has the integrity and business ethics to receive a 

Federal contract and is otherwise responsible, which 

is consistent with applicable statutes and regulations. 

To date, the NRC grants are awarded only to 

educational institutions and other entities. The NRC 

does not award grants to individuals. The NRC 

uses EPLS and other data systems to ensure that 

only responsible and otherwise eligible applicants 

receive NRC grants. The same monitoring practices 

are used for both grantees and commercial vendors. 

The NRC continues to follow the lead of the Office 

of Federal Procurement Policy (OFPP) on who 

receives awards and continues to implement any 

changes directed by OFPP policy. The NRC will 

also continue to use DNP to review and monitor 

improper payments.

Results of the Do Not Pay Initiative in Preventing Improper Payments

Results for 

fiscal year 2015

Number (#) 

of payments 

reviewed 

for possible 

improper 

payments

Dollars ($) 

of payments 

reviewed 

for possible 

improper 

payments

Number 

(#) of 

payments 

stopped

Dollars 

($) of 

payments 

stopped

Number (#) 

of potential 

improper 

payments 

reviewed 

and 

determined 

accurate

Dollars($) 

of potential 

improper 

payments 

reviewed and 

determined 

accurate

Reviews with the IPERIA 

specified databases 59,577 $ 258 million 0 $ 0 million 0 $ 0 million

Reviews with databases 

not listed in IPERIA 0 $ 0 million 0 $ 0 million 0 $ 0 million
150 Performance and Accountability Report n Fiscal Year 2015
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CHAPTER 4

COMBINED

SCHEDULE

OF SPENDING
C h a p t e r 4 n Combined Schedule of Spending

152

Combined SCHEDULE OF SPENDING

The Combined Schedule of Spending (SOS) is 

a summary and comparison of how the NRC 

spent money during FY 2015 and FY 2014. The 

Combined SOS presents all budgetary resources and 

obligations incurred for the NRC. The data used to 

populate the Combined SOS comes from the NRC’s 

core accounting system and is the same data that the 

NRC uses to populate the SBR. 

In the Combined SOS and the SBR, obligations 

incurred include personnel compensation and 

benefits, contracts, agreements between Federal 

agencies, travel, training, grants, and bankcard 

purchases below the micro-purchase threshold. 

The “Total Amounts Agreed To Be Spent” line of 

each section of the Combined SOS agrees with the 

“Obligations Incurred” line in the SBR.

The NRC also reports obligation information 

through the Web site USASpending.gov. The 

information reported by the NRC in 

USASpending.gov includes only contract 

obligations, which is a subset of the NRC’s total 

obligations.

WHAT MONEY IS AVAILABLE TO SPEND? 

This section presents total budgetary resources that 

are reported in the SBR. 

Total Resources refers to budgetary resources 

approved for spending by law.

Amounts Not Agreed To Be Spent represents 

amounts that the NRC was allowed to spend but did 

not take action on by the end of the FY.

Amounts Not Available To Be Spent represents 

amounts that the NRC was not approved to spend 

during the current FY.

Total Amounts Agreed To Be Spent represents 

spending actions by the NRC, including payroll and 

benefits, travel, training, contracts, orders, grants, 

and other legally binding agreements to pay for 

goods or services. 

HOW WAS THE MONEY SPENT? 

This section presents the value of goods and services 

that the NRC obligated for each of the NRC’s two 

major programs: Nuclear Reactor Safety and Nuclear 

Materials and Waste Safety. 

For the purposes of this section, the breakdown of 

“How was the Money Spent?” is based upon the 

OMB budget object class definitions in the OMB 

Circular A-11. 

Payroll represents compensation, including 

benefits directly related to duties performed for the 

Government by Federal civilian employees.

Contracts represents purchases of contractual 

services and supplies.

Grants represents contributions to States, local 

governments, foreign governments, corporations, 

associations (domestic and international), and 

individuals in compliance with programs allowed by 

law for distributing funds in this manner.

Travel represents the NRC’s payment for 

transportation, sustenance, and miscellaneous 

expenses for employees/persons on official business. 

Rent, Communications, and Utilities represents 

purchases of contractual services for the NRC’s 

offices.

Structures and Equipment represents purchases of 

capital equipment and leasehold improvements. 

WHO DID THE MONEY GO TO?

This section identifies the recipient of the money, by 

Federal and non-Federal entities. Amounts in this 

section reflect “amounts agreed to be spent.” 
h t t p : / / www.nrc.gov n Protecting People and the Environment 153

C h a p t e r 4 n Combined Schedule of Spending

Combined Schedule of Spending (in thousands)

For the fiscal years ended September 30, 2015 2014

What money is available to spend?

Total Resources $ 1,081,813 $ 1,119,076

Less Amount Available but Not Agreed To Be Spent (26,096) (53,295)

Less Amount Not Available To Be Spent (1,904) (169)

Total Amounts Agreed To Be Spent $ 1,053,813 $ 1,065,612

How was the money spent?

Spending within NRC Major Programs

Nuclear Reactor Safety

Payroll $ 470,846 $ 461,430

Contracts 251,724 256,573

Grants 15,333 22,388

Travel 21,430 18,994

Rent, Communications, and Utilities 43,087 44,794

Structures and Equipment 13,338 20,180

Total money spent for Nuclear Reactor Safety $ 815,758 $ 824,359

Nuclear Materials and Waste Safety

Payroll $ 137,400 $ 135,041

Contracts 73,466 75,093

Grants 4,475 6,552

Travel 6,254 5,559

Rent, Communications, and Utilities 12,574 13,109

Structures and Equipment 3,886 5,899

Total money spent for Nuclear Materials and Waste Safety $ 238,055 $ 241,253

Total Amounts Agreed To Be Spent $ 1,053,813 $ 1,065,612

Who did the money go to?

For Profit $ 238,366 $ 244,248

Individuals 511,032 498,583

Federal 280,623 287,892

State & Local Government 18,828 17,872

Other 4,964 17,017

Total Amounts Agreed To Be Spent $ 1,053,813 $ 1,065,612

In accordance with OMB Circular A-136, Section 11.5.1, the Combined SOS is not a required part of the Financial 

Statements and, therefore, it is not audited.
154 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 155

CHAPTER 4

FREEZE THE

FOOTPRINT
156 Performance and Accountability Report n Fiscal Year 2015
Combined freeze the footprint baseline comparison

FY 2012 Baseline FY 2015 Change (FY 2012 

Baseline – 2015)

Square Footage 

(SF in millions) 1.170 1.134 (0.036)

Reporting of o&M Cost – Owned and Direct lease buildings

FY 2012 

Reported Cost 2015 Change (FY 2012 Baseline – 2015)

Operation and 

Maintenance Costs 

($ in millions)

N/A* N/A* N/A*

*The NRC does not directly lease or own any space, but has occupancy agreements with GSA.

C h a p t e r 4 n Freeze the Footprint

At the beginning of the FY 2016 – FY 2020 planning 

period, the NRC’s portfolio will be 1,134,030 USF (97 

percent of the agency’s FY 2012 Freeze the Footprint 

baseline of 1,170,242 USF). The agency will target a 

reduction of the portfolio to 1,065,908 USF (91 percent of 

the Freeze the Footprint baseline) by the end of FY 2020 

by renovating, reconfiguring, and releasing 68,122 USF 

of office space at its Rockville, MD, headquarters and two 

regional office locations. This space, which is provided 

by occupancy agreements with GSA, will be backfilled by 

other Federal agencies. Implementing the reductions at 

headquarters and the regions will be challenging due to 

budget limitations and the lengths and non-cancelable 

terms of the leases GSA has in place. The limited 

amount of physical swing space available to support the 

renovation/reconfiguration activities at headquarters will 

also be a challenge.

h t t p : / / www.nrc.gov n Protecting People and the Environment 157
158 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 159

CHAPTER 4

CIVIL MONETARY

PENALT Y 

ADJUSTMENT

FOR INFLATION
160 Performance and Accountability Report n Fiscal Year 2015
C h a p t e r 4 n C i v i l M o n e ta r y P e n a lt y A d j u s t m e n t 

for Inflation

h t t p : / / www.nrc.gov n Protecting People and the Environment 161

Civil Monetary Penalty Adjustment for Inflation

In 2012, the NRC’s Office of the General Counsel performed the review and determined the percentage change in inflation 

was not large enough to meet the statutory criteria for adjusting the NRC’s civil monetary penalties. The next review/adjustment should be done in 2016.

Penalty (Name of Penalty) Authority

Date of 

Previous 

Adjustment

Date of Current 

Adjustment*

Current Penalty 

Level ($ 

Amount)

Base civil penalties – power reactors and gaseous diffusion 

plants

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $140,000

Base civil penalty – fuel fabricators authorized to possess 

Category I or II quantities of SNM

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $70,000

Base civil penalty – fuel fabricators, industrial processors, 

and independent spent fuel and monitored storage 

installation

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $35,000

Base civil penalty – test reactors, mills, and uranium 

conversion facilities, contractors, waste disposal licensees, 

industrial radiographers, and other large material users

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $14,000

Base civil penalty – research reactors, academic, medical, 

or other small material users

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $7,000

Base civil penalty - loss, abandonment, or improper 

transfer or disposal of a sealed source or device, 

regardless of the use or type of licensee:

Sources or devices with a total activity greater than 

3.7 × 10 4 MBq (1 Curie), excluding hydrogen-3 (tritium)

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $54,000

Base civil penalty - loss, abandonment, or improper 

transfer or disposal of a sealed source or device, 

regardless of the use or type of licensee:

Other sources or devices containing the materials and 

quantities listed in 10 CFR 31.5(c)(13)(i)

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $17,000

Base civil penalty - loss, abandonment, or improper 

transfer or disposal of a sealed source or device, 

regardless of the use or type of licensee:

Sources and devices not otherwise described above

Atomic Energy Act of 

1954, as amended November 2004 November 2008 $7,000

* Federal Register, Vol. 73, No. 230, Friday, November 28, 2008, 72529
162 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 163

CHAPTER 4

ACRONYMS

AND

ABBREVIATIONS
C h a p t e r 4 n Acronyms and Abbreviations

164 Performance and Accountability Report n Fiscal Year 2015

Acronym

10 CFR Title 10 of the Code of Federal Regulations

ABWR advanced boiling-water reactor

ADAMS Agencywide Documents Access and 

Management System

AGA Association of Government Accountants

ALC agency location code

AO Abnormal Occurrence

ASME American Society of Mechanical Engineers

ASP Accident Sequence Precursor

BWR Boiling-Water Reactor

CCDP conditional core damage probability

CFR Code of Federal Regulations

CNRA Committee on Nuclear Regulatory Activities

CNS Convention on Nuclear Safety

CoC Certificate of Compliance

COL combined license 

cROP Construction Reactor Oversight Process

CRT Contingency Response Tool

CSRS Civil Service Retirement System 

DC design certification

DHS U.S. Department of Homeland Security

DOE U.S. Department of Energy 

DOL U.S. Department of Labor 

DOT U.S. Department of Transportation

DSRS design specific review standards

ECIC Executive Committee on Internal Control

ELAP extended loss of alternating power

ELPS Excluded Parties List System

EPRTM Evolutionary Power Reactor

EPRI Electric Power Research Institute

ESP early site permit

FAPIIS Federal Awardees Performance and Integrity 

Information System

FDA U.S. Food and Drug Administration

FECA Federal Employees Compensation Act 

of 1993 

FERS Federal Employees Retirement System

FEVS Federal Employee Viewpoint Survey

Acronym

FFMIA Federal Financial Management 

Improvement Act of 1996 

FMFIA Federal Managers’ Financial Integrity Act 

of 1982 

FOIA Freedom of Information Act of 1966

FSER final safety evaluation report

FTE full-time equivalent

FY fiscal year 

GAAP Generally Accepted Accounting Principles

GAO Government Accountability Office

GSA U.S. General Services Administration

HRA human reliability analysis

IAEA International Atomic Energy Agency 

IG Inspector General

IM information management

IMC Inspection Manual Chapter

IMPEP Integrated Materials Performance 

Evaluation Program

INPO Institute for Nuclear Power Operations

Integrity Act Federal Managers’ Financial Integrity Act 

of 1982

IP Inspection Procedure

IPERA Improper Payments Elimination and 

Reporting Act of 2012

IPERIA Improper Payment Elimination and Recovery 

Improvement Act of 2012

IPIA Improper Payments Information Act of 2002

IRC Incident Response Center

IRP Integrated Response Program

ISG interim staff guidance

ISFSI independent spent fuel storage installation

ISMP Integrated Source Management Portfolio

IT information technology 

ITAAC inspections, tests, analyses, and 

acceptance criteria 

IT/IM Information Technology and Information 

Management

KM knowledge management

LAN Local Area Network

LLW low-level waste
C h a p t e r 4 n Acronyms and Abbreviations

h t t p : / / www.nrc.gov n Protecting People and the Environment 165

Acronym

LWR light-water reactor

MD Management Directive

MDEP Multinational Design Evaluation Program

MSI minority serving institution

MWe Megawatt electric

MWt Megawatt thermal

NDAA Ronald W. Reagan National Defense 

Authorization Act for 2005

NDE nondestructive examination

NEA Nuclear Energy Agency

NIST National Institute of Standards and 

Technology

NNSA National Nuclear Security Administration

NPP nuclear power plant

NRA Nuclear Regulatory Agency

NRC U.S. Nuclear Regulatory Commission 

NRO Office of New Reactors

NSTS National Source Tracking System

NTAS National Terrorism Advisory System

NUREG Nuclear Regulatory Commission document 

identifier

NWF Nuclear Waste Fund

OBRA-90 The Omnibus Budget Reconciliation 

Act of 1990

OCFO Office of the Chief Financial Officer

OIG Office of the Inspector General 

OMB Office of Management and Budget

OPM U.S. Office of Personnel Management

PAR Performance and Accountability Report

Acronym

PIV personal identification verification

PNNL Pacific Northwest National Laboratory

PRA probabilistic risk assessment 

PWR pressurized water reactor

REIRS Radiation Exposure Information and Reporting 

System

REM roentgen equivalent man

RIC Regulatory Information Conference

ROP Reactor Oversight Process

SAT Senior Assessment Team

SBR Statement of Budgetary Resources

SCCS Safety Culture and Climate Survey

SDP Significance Determination Process

SFFAS Statement of Federal Financial Accounting 

Standards

SGI Safeguards Information

SMR small modular reactor

SNM special nuclear material

SOARCA State-of-the-Art Reactor Consequence Analyses

SOS Schedule of Spending

SRP Standard Review Plan

TTC Technical Training Center

TVA Tennessee Valley Authority

UF6 uranium hexafluoride

UO2 uranium dioxide

UR uranium recovery

USAID U.S. Agency for International Development

WBL Web-based Licensing

WIR Waste Incidental to Reprocessing
166 Performance and Accountability Report n Fiscal Year 2015
CHAPTER 4

BIBLIOGRAPHIC

DATA SHEET

h t t p : / / www.nrc.gov n Protecting People and the Environment 167
168 Performance and Accountability Report n Fiscal Year 2015
C h a p t e r 4 n Bibliographic Data Sheet

h t t p : / / www.nrc.gov n Protecting People and the Environment 169

NRC FORM 335 U.S. NUCLEAR REGULATORY COMMISSION

(12-2010)

NRCMD 3.7

1. REPORT NUMBER

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

and Addendum Numbers, if any.)

2. TITLE AND SUBTITLE 3. DATE REPORT PUBLISHED

MONTH YEAR

4. FIN OR GRANT NUMBER

5. AUTHOR(S) 6. TYPE OF REPORT

7. PERIOD COVERED

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) 13. AVAILABILITY STATEMENT

14. SECURITY CLASSIFICATION

(This Page)

(This Report)

15. NUMBER OF PAGES

16. PRICE

BIBLIOGRAPHIC DATA SHEET

(See instructions on the reverse)

November

N/A

Annual

Fiscal Year 2015

Unlimited

NUREG-1542, Vol. 21

U.S. Nuclear Regulatory Commission

Fiscal Year 2015

Performance and Accountability Report

Performance and Accountability Report (PAR)

Fiscal Year (FY)

2015

The Fiscal Year 2015 Performance and Accountability Report (PAR) presents the agency’s program performance and 

financial management information in compliance with the Government Performance and Results Modernization Act

of 2010. The PAR gives the President, Congress, and the American public the opportunity to assess the agency’s

perfomance in achieving its mission and the stewardship of its resources. 

David Holley, James Coyle, et. al

Same as above

NRC FORM 335 (12-2010)

2015

Division of Planning and Budget

Office of the Chief Financial Officer

U.S. Nuclear Regulatory Commission

Washington, DC 20555-0001
170 Performance and Accountability Report n Fiscal Year 2015
h t t p : / / www.nrc.gov n Protecting People and the Environment 171

CHAPTER 4

AVAILABILITY

OF REFERENCE

MATERIALS

IN NRC

PUBLICATIONS
172 Performance and Accountability Report n Fiscal Year 2015
C h a p t e r 4 n Ava i l a b i l i t y o f R e f e r e n c e M at e r i a l s 

in NRC Publications

h t t p : / / www.nrc.gov n Protecting People and the Environment 173

NRC Reference Material

As of November 1999, you may electronically access 

NUREG-series publications and other NRC records 

at NRC’s Library at www.nrc.gov/reading-rm.

html. Publicly released records include, to name a 

few, NUREG-series publications; Federal Register 

notices; applicant, licensee, and vendor documents 

and correspondence; NRC correspondence and 

internal memoranda; bulletins and information 

notices; inspection and investigative reports; licensee 

event reports; and Commission papers and their 

attachments.

NRC publications in the NUREG series, NRC 

regulations, and Title 10, “Energy,” in the Code of 

Federal Regulations may also be purchased from one of 

these two sources.

1. The Superintendent of Documents

U.S. Government Printing Office

Mail Stop IDCC

Washington, DC 20402–0001

Internet: bookstore.gpo.gov

Telephone: 202-512-1800

Fax: 202-512-2104

2. The National Technical Information Service

5301 Shawnee Rd., Alexandria, VA 22312–0002

www.ntis.gov

1-800-553-6847 or, locally, 703-605-6000

A single copy of each NRC draft report for comment 

is available free, to the extent of supply, upon written 

request as follows:

Address: U.S. Nuclear Regulatory Commission

Office of Administration

Publications Branch

Washington, DC 20555-0001

E-mail: distribution.resource@nrc.gov

Facsimile: 301–415–2289

Some publications in the NUREG series that are 

posted at NRC’s Web site address www.nrc.gov/

reading-rm/ doc-collections/nuregs are updated 

periodically and may differ from the last printed 

version. Although references to material found on a 

Web site bear the date the material was accessed, the 

material available on the date cited may subsequently 

be removed from the site.

NON-NRC Reference Material

Documents available from public and special 

technical libraries include all open literature items, 

such as books, journal articles, transactions, Federal 

Register notices, Federal and State legislation, and 

congressional reports. Such documents as theses, 

dissertations, foreign reports and translations, and 

non-NRC conference proceedings may be purchased 

from their sponsoring organization.

Copies of industry codes and standards used in a 

substantive manner in the NRC regulatory process are 

maintained at:

The NRC Technical Library

Two White Flint North

11545 Rockville Pike

Rockville, MD 20852–2738

These standards are available in the library for 

reference use by the public. Codes and standards 

are usually copyrighted and may be purchased from 

the originating organization or, if they are American 

National Standards, from:

American National Standards Institute

11 West 42nd Street

New York, NY 10036–8002

www.ansi.org

212-642-4900

Legally binding regulatory requirements are stated only in laws; 

NRC regulations; licenses, including technical specifications; or 

orders, not in NUREG-series publications. The views expressed 

in contractorprepared publications in this series are not 

necessarily those of the NRC.

The NUREG series comprises (1) technical and administrative 

reports and books prepared by the staff (NUREG– XXXX) or 

agency contractors (NUREG/CR–XXXX), (2) proceedings of 

conferences (NUREG/CP–XXXX), (3) reports resulting from 

international agreements (NUREG/IA–XXXX), (4) brochures 

(NUREG/BR–XXXX), and (5) compilations of legal decisions 

and orders of the Commission and Atomic and Safety Licensing 

Boards and of Directors’ decisions under Section 2.206 of 

NRC’s regulations (NUREG–0750).

DISCLAIMER: This report was prepared as an account of work 

sponsored by an agency of the U.S. Government. Neither the 

U.S. Government nor any agency thereof, nor any employee, 

makes any warranty, expressed or implied, or assumes any legal 

liability or responsibility for any third party’s use, or the results 

of such use, of any information, apparatus, product, or process 

disclosed in this publication, or represents that its use by such 

third party would not infringe privately owned rights.
NUREG-1542, Vol. 21

November 2015

@NRC.gov

U.S. NUCLEAR REGULATORY COMMISSION

WASHINGTON, DC 20555-0001

http://www.nrc.gov