UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

July 30, 2010

MEMORANDUM TO: R. William Borchardt

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant inspector General for Audits

SUBJECT: MEMORANDUM REPORT: AUDIT OF NRC EMPLOYEE 

USE OF THE FEDERAL CALLING CARD (OIG-10-A-15)

The Office of the Inspector General (OIG) conducted this audit to determine whether the 

U.S. Nuclear Regulatory Commission (NRC) has established and implemented an 

effective system of internal control over the use of Federal calling cards. OIG identified 

basic, cost-effective measures that NRC could use to (1) improve management controls 

over the agency’s Federal calling card program and (2) provide information to 

employees about cost-effective calling options. By imposing a basic level of costeffective oversight over the calling card program, the agency could increase its 

confidence that staff are using this resource as intended.

This report makes two recommendations to improve oversight of NRC employee use of 

the calling cards and one recommendation concerning cost-effective calling options. 

Please provide information on actions taken or planned on each of the 

recommendations within 30 days of the date of this report. Actions taken or planned are 

subject to OIG followup as stated in Management Directive (MD) 6.1.
Audit of NRC Employee Use of the Federal Calling Card

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BACKGROUND

Federal calling cards are issued to NRC employees primarily for use in making official 

business calls while on official travel. For personal calls, employees are permitted to

use the card to make one 30-minute personal call or two 10-minute personal calls per 

day while on domestic travel, and three 5-minute personal international calls within a 

7-day period of international travel. To place domestic or international calls using the 

calling card, employees follow instructions on the back of the card, which require use of 

a PIN code that also is printed on the card. Employees may also use their calling cards 

to set up teleconferences.

All employees are eligible to have a calling card. For headquarters employees, card 

requests are made to the Office of Information Services (OIS) through the office 

information technology (IT) coordinators. Regional office IT coordinators are assigned a 

bulk number of cards, which they may assign to regional employees upon request. 

Employees are required to return their cards as part of the agency’s separationclearance program. There are no costs associated with assignment of the calling cards; 

the cost to the agency is based on use of the cards. According to agency records, as of 

August 2009, 2,354 NRC employees were assigned calling cards.

The calling card program is available through the agency’s FTS2001 

telecommunications contract1and is managed by the OIS Computer Operations and 

Telecommunications Branch. The branch manages the calling card inventory for 

headquarters and the regions, receives and reviews the bills, and authorizes payment. 

Oversight for the calling card program is performed primarily by one OIS manager 

(referred to in this report as the Calling Card Manager) and is one of multiple 

telecommunications duties that this manager performs.

Guidance on usage of the calling card and other telecommunication options appears in 

Yellow Announcement Number 60, Use of NRC Calling Cards While on Official 

Temporary Duty Travel (issued September 1, 2006); MD 2.3, Telecommunications (last 

revised January 22, 1993); and MD 14.1, Official Temporary Duty Travel (last revised 

June 7, 2005).

 

1

The FTS2001 contract is intended to provide Government users with a variety of telecommunications 

services. NRC’s monthly FTS2001 bill includes charges for voice services (including calling cards), data 

services, and dedicated transmission service.
Audit of NRC Employee Use of the Federal Calling Card

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OIG initiated this audit based on a recent Department of the Treasury Inspector General 

audit report that identified problems with oversight of calling cards and unexplained 

calling card costs, in combination with information provided by NRC’s Calling Card 

Manager that indicated marked growth in NRC’s calling card program. During OIG’s 

FY 2010 audit planning process, the Calling Card Manager informed OIG that costs 

associated with NRC’s calling cards had increased 500 percent between FY 2007 and 

FY 2009, from approximately $20,400 to $109,000 per year. However, shortly after the 

audit was initiated, OIG learned that the agency’s calling card program cost far less than 

the manager had believed. In fact, NRC paid only $4,531.45 for calling card use in 

2008 and $4,300.28 in 2009.

Although OIG typically does not conduct audits of programs with such low materiality, 

we opted to complete the audit and issue a brief report on the topic due to a general 

lack of program oversight, combined with the potential for individual misuse of the 

calling cards.

PURPOSE

The audit objective was to determine whether NRC has established and implemented 

an effective system of internal control over the use of Federal calling cards.

RESULTS 

A. NRC Could Improve Management Controls Over Calling Card Program

Opportunities exist for NRC to improve management controls over employee use of 

Federal calling cards. OIS managers have not perceived a need to strengthen 

oversight of the calling card program due to the program’s low cost to the agency and 

limited resources for such oversight. However, by undertaking simple, straightforward 

measures to (1) conduct some basic level of oversight of employees’ calling card usage 

and (2) better track the calling card inventory, NRC could gain confidence that 

employees are using this resource as intended.

Internal Control Guidance 

Office of Management and Budget Circular A-123 requires agencies to implement 

management controls to reasonably ensure that programs and resources are protected 

from fraud, waste, and mismanagement. The Government Accountability Office 
Audit of NRC Employee Use of the Federal Calling Card

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Standards for Internal Control in the Federal Government (often referred to as the 

Green Book) states that information should be recorded and communicated to 

managers and others who need it in a form and within a timeframe that enables them to 

perform their internal control and other responsibilities.

NRC Does Not Review Individual Calling Card Usage

Although the Calling Card Manager performs an analytical review of the agency’s 

FTS2001 long-distance bills each month to look for overall trends, no one in the agency 

reviews calling card detail records that show specific usage by individuals. OIG 

reviewed calling card usage during 2009 and determined that in each month, a single 

user2accounted for a high percentage of the monthly calling card usage (see Table 1). 

For example, in May 2009, 53 percent of the month’s calling card charges were 

attributable to a single calling card. Yet, NRC never attempts to identify or follow up on 

high calling card usage to determine whether usage is appropriate and in accordance 

with agency guidance.3 

 

2

Individual high users varied from month to month.

3

After several unsuccessful attempts to obtain call detail records for high calling card users, OIG provided 

OIS with a list of five card numbers that incurred more than $100 in calling card charges in a single month 

and requested that OIS representatives undertake a review of the propriety of the usage.
Audit of NRC Employee Use of the Federal Calling Card

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Source: OIG-generated based on data provided by OIS.

Table 1. 2009 Monthly Calling Card Charges

Month

Verizon 

Calling 

Card Bill 

Highest 

User by 

Month

Percent 

Attributable 

to High 

Users

(A) (B) (B ÷ A=C)

January

 

$255.48 

 

$59.29 23%

February $161.28 $16.34 10%

March

 

$298.78 

 

$57.18 19%

April

 

$236.58 

 

$75.91 32%

May

 

$477.92 

 

$254.15 53%

June

 

$388.94 

 

$105.57 27%

July $256.85 

 

$36.70 14%

August $513.05 

 

$116.46 23%

September

 

$417.67 

 

$126.57 30%

October

 

$334.90 

 

$48.95 15%

November

 

$410.09 

 

$177.71 43%

December

 

$548.74 

 

$189.57 35%

Totals:

 

$4,300.28 $1,264.40 29%
Audit of NRC Employee Use of the Federal Calling Card

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Furthermore, the Calling Card Manager is the only individual who reviews NRC’s 

FTS2001 bills each month. While the manager claimed to routinely follow up on 

unexplained monthly variations in the bills, the manager was unfamiliar with monthly 

billing details for calling card usage. As noted in the background section of this report, 

the manager demonstrated a lack of familiarity with the calling card billing details when, 

during OIG’s annual audit planning process, the manager provided OIG with calling card 

program costs that far exceeded actual costs. After this audit was underway, OIG 

learned that the manager had misinterpreted the “calling card” line item on the FTS2001 

bills by thinking the line item reflected calling card usage only. In fact, since January 

2008, the line item primarily included charges for audio teleconference calls. While the 

calling card line item has long reflected both types of charges, in January 2008 the 

agency started relying more on the FTS2001 contract to support teleconferences, which 

caused the jump in the calling card line item. 

Calling Card Inventory Is Inaccurate

The agency’s most recent calling card inventory, dated August 2009, is inaccurate and 

difficult to follow. OIG reviewed calling card usage in 2009 and learned that of 280 

calling cards that incurred costs during 2009, 6 were not listed in the inventory at all and 

73 were listed but not associated with individual names in the inventory.4 The 73 cards 

were associated with such identifiers as “USNRC” or alphanumeric codes, which were 

listed in the cardholder column5; however, there were no employee names associated 

with these particular cards. Together, these 79 unlisted and unassigned cards incurred 

$1,373.48 in charges, or about one-third of all calling card costs incurred in 2009. OIG 

also observed that names and instructions in the August 2009 inventory sometimes 

appeared in a “notes” column, which made it difficult to determine whether a card was 

currently assigned or to whom it was assigned.

Furthermore, although the August 2009 inventory identified 380 cards that needed to be 

deactivated because the employees to whom they were assigned had left NRC, no one 

followed up to make sure the cards were actually deactivated. During the course of this 

audit, due to questions posed by the audit team, the Calling Card Manager learned that 

deactivation had not occurred. The cards were finally deactivated on June 1, 2010, 10 

months after the problem was identified.

 

4

Some or all charges associated with the 73 unassigned cards and 6 unlisted cards occurred prior to 

September 2009, which suggests that their assignment and existence should have been noted in the 

August 2009 inventory. 

5 OIG provided a list of unassigned and unlisted card numbers to OIS and requested they complete the 

reconciliation of the calling cards that were not listed or not associated with a specific employee name on 

the August 2009 inventory.
Audit of NRC Employee Use of the Federal Calling Card

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Basic Oversight Not Conducted Due to Low Program Cost and Resource Limitations

OIS managers did not provide adequate oversight of the calling card program because 

of the low dollar value of the program and limited resources for such oversight, which 

would require the reviewer to perform analysis of several sets of records, some of which 

are not readily available to NRC. Accordingly, they questioned the value of imposing 

additional oversight over the program.

Due to the potential for misuse of the calling cards, OIG contends that imposing a 

minimal and basic level of cost-effective oversight would allow the agency to gain some 

confidence that employees are using the cards as intended. Currently, there is no 

oversight performed of individual usage, and misuse would unlikely be detected by the 

monthly analytical review performed by the Calling Card Manager; therefore, the agency 

has no knowledge of whether employees are using calling cards in an appropriate 

manner.

Recommendations

OIG recommends that the Executive Director for Operations:

1. Develop and implement a plan to assess the validity of high calling card usage 

on a periodic basis.

2. Develop and implement a policy to conduct annual inventories of calling cards 

and reconcile differences in a timely manner.

B. Agency Could Provide Useful Information to Employees on Cost-Effective 

Calling Options

NRC has not provided employees with up-to-date information on cost-effective calling 

options because the agency has not performed a cost analysis of the various options. 

By conducting such an analysis, the agency would be able to assess whether 

differences are significant and therefore worth conveying to staff to help them make 

informed decisions about telephone calls while on Government travel.

The Federal Travel Regulations instruct Government employees to use the same care 

in incurring expenses that a prudent person would exercise if traveling on personal 

business. The Green Book conveys that managers need to provide employees with the 

information they need to carry out their responsibilities.
Audit of NRC Employee Use of the Federal Calling Card

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In the years since NRC has last issued guidance on calling options, including the 

Federal calling card, the calling environment has changed in that more employees have 

blackberries or cell phones than ever before. Guidance for employees on preferred 

calling methods that was applicable in the past may be less applicable now. However, 

NRC has not performed a recent cost analysis of calling options (e.g., calling card, cell 

phones, blackberries, personal cell phone reimbursement program, NRC Operator) to 

determine whether differences are significant and warrant communication to staff. A 

manager in the Office of International Programs who travels frequently was unaware if 

there were cost-benefits from using one calling method versus another, but said that if 

such benefits existed, this would be useful information to know.

While agency telecommunication managers explained that NRC wants to give 

employees flexibility in calling options (e.g., ability to use calling card if cellular service is 

unavailable), OIG contends that it could be helpful and cost-effective if the agency were 

to provide cost-savings tips in a single location for employees to access (e.g., travel 

information on NRC Intranet). Making such information available to employees could 

result in more prudent use of taxpayer dollars.

Recommendation

OIG recommends that the Executive Director for Operations:

3. Calculate the relative costs of various calling options and, if there are significant 

differences, communicate information to staff about cost-effective calling options.

AGENCY COMMENTS

During an exit conference held July 26, 2010, the agency generally agreed with the 

findings and recommendations in this audit report and said that no agency suggestions 

or comments would be provided in connection with the report.
Audit of NRC Employee Use of the Federal Calling Card

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SCOPE AND METHODOLOGY

Auditors reviewed Yellow Announcement 60, MD 14.1, and MD 2.3, and interviewed 

OIS managers with responsibility for the calling card program to understand NRC’s 

policies and procedures on use of the Federal calling card. Auditors interviewed the 

OIS manager with responsibility for oversight and reviewed the agency’s contract for 

work to be performed by the NRC Telecommunications Service Center to understand 

NRC’s oversight of the calling card program. To assess employee usage of the calling 

cards, auditors reviewed Verizon calling card usage records for NRC employees for 

calendar years 2008 and 2009 and FTS2001 billing records. Auditors reviewed the 

agency’s August 2009 (most recent) calling card inventory to determine the number of 

calling cards assigned, and compared 2009 usage records to the inventory to assess 

whether calling cards used in 2009 were assigned to specific employees. Auditors 

planned to review high usage of the cards to determine whether employees were using 

the cards in accordance with agency guidance; however, neither the agency nor the 

service provider were able to provide call detail records. Therefore, OIG provided OIS 

representatives with a list of cards that incurred more than $100 charges in a single 

month and requested that they review the usage to determine whether it was in 

accordance with agency guidance. Internal controls related to the audit objective were 

reviewed and analyzed. Throughout the audit, auditors were aware of the possibility or 

existence of fraud, waste, or misuse in the program. 

We conducted this performance audit in accordance with generally accepted

government auditing standards (except as noted in the preceding paragraph with regard 

to access to calling card call detail records). Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. Except for the 

scope limitation regarding access to calling card detail records, we believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based 

on our audit objectives. 

The work was conducted by Steven Zane, Deputy Assistant Inspector General for 

Audits; Judy Gordon, Quality Assurance Manager; Dennis Sylvester, Auditor; and John 

Tornabane, Analyst. We performed the audit work from January 2010 to June 2010

at NRC headquarters in Rockville, Maryland.
Audit of NRC Employee Use of the Federal Calling Card

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Electronic Distribution

Edwin M. Hackett, Executive Director, Advisory Committee 

 on Reactor Safeguards

E. Roy Hawkens, Chief Administrative Judge, Atomic Safety 

 and Licensing Board Panel

Stephen G. Burns, General Counsel

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

James E. Dyer, Chief Financial Officer

Hubert T. Bell, Inspector General

Margaret M. Doane, Director, Office of International Programs

Rebecca L. Schmidt, Director, Office of Congressional Affairs

Eliot B. Brenner, Director, Office of Public Affairs

Annette Vietti-Cook, Secretary of the Commission

R. William Borchardt, Executive Director for Operations

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

 Research, State, Tribal, and Compliance Programs, OEDO

Darren B. Ash, Deputy Executive Director 

 for Corporate Management, OEDO

Martin J. Virgilio, Deputy Executive Director for Reactor

 and Preparedness Programs, OEDO

Nader L. Mamish, Assistant for Operations, OEDO

Kathryn O. Greene, Director, Office of Administration

Patrick D. Howard, Director, Computer Security Office

Roy P. Zimmerman, Director, Office of Enforcement

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

 and Environmental Management Programs

Cheryl L. McCrary, Director, Office of Investigations

Thomas M. Boyce, Director, Office of Information Services

James F. McDermott, Director, Office of Human Resources

Michael R. Johnson, Director, Office of New Reactors

Catherine Haney, Director, Office of Nuclear Material Safety

 and Safeguards

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

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

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

James T. Wiggins, Director, Office of Nuclear Security

 and Incident Response

Marc L. Dapas, Acting Regional Administrator, Region I

Luis A. Reyes, Regional Administrator, Region II

Mark A. Satorius, Regional Administrator, Region III

Elmo E. Collins, Jr., Regional Administrator, Region IV