Audit of NRC’s

Reactor Oversight Process: 

Reactor Safety Baseline 

Inspection Procedures

OIG-16-A-12

April 6, 2016 

All publicly available OIG reports (including this report) 

are accessible through NRC’s Web site at

http://www.nrc.gov/reading-rm/doc-collections/insp-gen
UNITED STATES 

NUCLEAR REGULATORY COMMISSION 

WASHINGTON, D.C. 20555-0001

OFFICE OF THE 

INSPECTOR GENERAL 

April 6, 2016 

MEMORANDUM TO: Victor M. McCree 

 Executive Director for Operations 

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits 

SUBJECT: AUDIT OF NRC’S REACTOR OVERSIGHT PROCESS: 

REACTOR SAFETY BASELINE INSPECTION 

PROCEDURES (OIG-16-A-12) 

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

Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures.

The report presents the results of the subject audit. Following the March 23, 2016, exit 

conference, agency staff indicated that they had no formal comments for inclusion in this 

report. 

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

within 30 days of the date of this memorandum. Actions taken or planned are subject to OIG 

followup as stated in Management Directive 6.1. 

We appreciate the cooperation extended to us by members of your staff during the audit. If 

you have any questions or comments about our report, please contact me at (301) 415-5915 

or Paul Rades, Team Leader, at (301) 415-6228. 

Attachment: As stated 
Office of the Inspector General 

U.S. Nuclear Regulatory Commission 

Defense Nuclear Facilities Safety Board

Results in Brief

Audit of NRC’s Reactor Oversight Process: Reactor 

Safety Baseline Inspection Procedures

What We Found

NRC needs to ensure mandatory and discretionary language

used in inspection procedures is clear and consistent for 

inspectors and managers responsible for performing and 

overseeing baseline inspections. 

Completion of inspection procedures is a key input into 

NRC’s assessment of whether nuclear reactor licensees 

operate safely. OIG did not identify specific instances where 

unclear language led to inadequate assessments; however 

there is risk associated with how NRC is assured inspectors 

perform activities deemed mandatory in inspection 

procedures. For example, NRC risks inspectors not 

performing mandatory activities and performing unneeded 

discretionary activities because mandatory and discretionary 

activities are unclear. NRC also risks inconsistent 

inspections across regions.

What We Recommend

This report makes recommendations to make baseline 

inspection procedures clearer for inspectors and managers 

performing and overseeing baseline inspections.

Agency management stated their general agreement with the 

finding and recommendations in this report.

Why We Did This Review

The U.S. Nuclear Regulatory 

Commission’s (NRC) 

Reactor Oversight Process 

(ROP) is a risk-informed, 

performance-based, tiered 

approach to assessing plant 

safety.

Baseline inspections are the 

minimum level of inspection 

required to ensure plant 

safety and security, and are 

common to all operating 

nuclear plants. They focus 

on activities and systems 

that are “risk significant.”

The audit objective was to 

assess the effectiveness of 

the ROP in discovery of 

plant performance issues.

For the purposes of this 

audit, the assessment of the 

effectiveness of the ROP 

was limited to an analysis of 

how inspection procedures 

were written, and 

understood and performed 

by agency managers and 

inspection staff. The report 

appendix contains 

information on the audit 

scope and methodology.

OIG-16-A-12

April 6, 2016
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

ABBREVIATIONS AND ACRONYMS .......................................................... i 

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

II. OBJECTIVE...................................................................................... 3 

III. FINDING........................................................................................... 3 

Baseline Inspection Procedures Could Be More Clear ................ 3 

Recommendations....................................................................... 7 

IV. AGENCY COMMENTS..................................................................... 8 

APPENDIXES 

A. OBJECTIVE, SCOPE, AND METHODOLOGY................................. 9 

TO REPORT FRAUD, WASTE, OR ABUSE .............................................11

COMMENTS AND SUGGESTIONS..........................................................11

 TABLE OF CONTENTS
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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NRC Nuclear Regulatory Commission

OIG Office of the Inspector General

PI Performance Indicator

ROP Reactor Oversight Process

 ABBREVIATIONS AND ACRONYMS
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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NRC’s Reactor Oversight Process

The U.S. Nuclear Regulatory Commission’s (NRC) Reactor Oversight 

Process (ROP) is a risk-informed, performance-based, tiered approach to 

assessing plant safety consisting of three strategic performance areas: 

Reactor Safety, Radiation Safety, and Safeguards. Each strategic 

performance area has cornerstones that reflect the essential safety 

aspects of facility operation. Licensee compliance with NRC requirements 

and satisfactory licensee performance in the cornerstones provide 

reasonable assurance of safe facility operation. 

Figure 1. ROP Regulatory Framework 

Source: NRC

 I. BACKGROUND
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Reactor Safety Cornerstones 

The Reactor Safety cornerstones include inspectable areas designed to 

(1) limit the frequency of initiating events; (2) ensure the availability, 

reliability, and capability of mitigating systems; and (3) ensure the integrity 

of fuel cladding, reactor coolant system, and containment boundaries.1 

As part of the ROP, NRC developed the baseline inspection program to 

align with the cornerstones of safety. 

Baseline Inspection Program 

Baseline inspections are the minimum level of inspection required to 

ensure plant safety and security, and are common to all operating nuclear 

plants. They focus on activities and systems that are “risk significant.” 

Baseline inspection procedures allow NRC to verify performance 

indicators (PI) provided by the licensee and inspect areas not covered by 

the PIs. Licensee performance is assessed using the inspection results 

and PIs. Any findings from inspections and PIs are further evaluated for 

significance and then placed in an action matrix to determine the response 

required from the licensee. 

The baseline inspection program includes inspection procedures aligned 

to each of the cornerstones. This audit concentrated on baseline 

Inspection Procedure 71111, “Reactor Safety-Initiating Events, Mitigating 

Systems, Barrier Integrity,” and its attachments. 

NRC’s Office of Nuclear Reactor Regulation is responsible for the overall 

management, support, and oversight of baseline inspections including the 

language used in the inspection procedures. Each inspection procedure 

describes mandatory activities that must be done and optional activities 

that provide inspectors information to consider or guide inspections. 

Inspectors are responsible for performing baseline inspection procedures 

while regional managers oversee baseline inspections and are 

responsible for ensuring baseline inspections are completed. 

 

1

 The Reactor Safety Strategic Performance Area includes a fourth cornerstone related to emergency preparedness 

that was not included in the scope of this audit. 
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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The audit objective was to assess the effectiveness of the ROP in 

discovery of plant performance issues. 

For the purposes of this audit, the assessment of the effectiveness of the 

ROP was limited to an analysis of how inspection procedures were 

written, and understood and performed by agency managers and 

inspection staff. The report appendix contains information on the audit 

scope and methodology. 

Opportunities exist to make baseline inspection procedures clearer for 

inspectors and managers performing and overseeing baseline inspections. 

A. Baseline Inspection Procedures Could Be More Clear 

Mandatory and discretionary activities listed in some baseline inspection 

procedures are unclear to NRC staff and managers because NRC does 

not have controls in place to ensure clear language is used to differentiate 

mandatory and discretionary activities. As a result, NRC risks inspectors 

not performing activities deemed mandatory and performing unneeded 

discretionary activities. NRC also risks inadequate assessment of safety 

cornerstones and inconsistent inspections across regions. 

 II. OBJECTIVE

 III. FINDING
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Mandatory and Discretionary Activities Must Be Clear

NRC requires baseline inspection procedures be written to clearly convey 

which activities are mandatory and which are discretionary. Inspection 

Manual Chapter 0040, “Preparing, Revising and Issuing Documents for 

the NRC Inspection Manual,” requires inspection procedure originators to 

make clear which activities are mandatory and which are discretionary. 

The inspection manual chapter identifies words such as, “must,” “shall,” 

and “will” to indicate mandatory requirements, and “can,” “may,” “might,” 

and “should” to convey discretion. Further, the inspection manual chapter 

requires guidance to be clearly identified so it will not be mistaken for 

additional inspection requirements. 

Inspection requirements in inspection procedures describe the 

requirements for completing the procedure and achieving its objectives. 

Inspection guidance provides information on how the requirements are 

expected to be accomplished, and in some inspection procedures, reflects 

experience gained or problems encountered in performing the inspection. 

Inspection Manual Chapter 0040 also requires staff writing inspection 

procedures to ensure it is clear to the inspector which portions are 

mandatory and which, if any, are optional. 

In addition, Federal internal control standards require that NRC programs 

be structured and implemented in a way to provide reasonable assurance 

that the agency is accomplishing its mission. 

Mandatory and Discretionary Activities Unclear

Mandatory and discretionary activities in baseline inspection procedures 

are unclear to NRC staff and managers responsible for performing and 

overseeing baseline inspections. Some inspection procedures contain 

language that is unclear as to which steps are mandatory and which steps 

are discretionary. For example, under “Inspection Requirements” in 

What Is Required

What We Found
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Figure 2, “shall” in the first sentence is a mandatory requirement and other 

words, such as “should” and “consider,” are discretionary yet appear 

under the same heading, “Inspection Requirements.” 

Figure 2. Inspection Procedure 71111.01 Adverse Weather 

Protection 

71111.01-02 INSPECTION REQUIREMENTS 

This review shall be performed for the types of weather-related risks identified 

for the site. The inspector should review the licensee’s operating experience, 

corrective action program, UFSAR, etc., to determine the types of seasonal 

and/or storm-related adverse weather challenges to which the site is 

susceptible. The actual inspection for the adverse weather condition should

then be performed prior to experiencing expected seasonal temperatures 

extremes and when expected adverse weather conditions are imminent at the 

site. When selecting a sample, it is recommended that the inspector consider

multiple systems that are collectively risk-significant.

Source: NRC 

Some inspectors explained they were uncertain whether “should” or other 

discretionary words in the inspection procedure were meant to be 

mandatory or discretionary. To avoid uncertainty, several inspectors said 

they treated “should” as a mandatory requirement and performed the 

specified activities. 

As another example, the inspection requirements section identified in 

Figure 3 begins with discretionary language. It states that the inspector 

should review the licensee fire plan and then should use it as an 

evaluation tool. The inspection procedure indicates that reviewing the fire 

plan is discretionary, yet the inspection procedure relies on the fire plan as 

an evaluation tool. Inspectors are left to determine if reviewing the fire 

plan is meant as mandatory or discretionary. 
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Figure 3. Inspection Procedure 71111.05AQ Fire Protection 

(Annual/Quarterly) 

71111.05AQ-02 INSPECTION REQUIREMENTS 

02.01 Quarterly Inspection. The inspector should review the fire plan for 

the area selected against the fire protection program defined hazards and 

DID features to verify that the fire plan is adequate. The fire plan should

then be used as a tool in evaluating the attributes below for the selected 

fire areas.

Source: NRC 

NRC staff and managers expressed difficulty distinguishing mandatory 

and discretionary activities in some baseline inspection procedures. OIG 

interviewed 41 staff and managers2responsible for performing and 

overseeing inspections, and managing inspection procedures. Sixty-three 

percent acknowledged some inspection procedures were not clear. 

Further, 63 percent of inspectors noted issues with inspection procedure 

clarity. Several inspectors also mentioned they rely on experience to 

judge which activities are mandatory and which are discretionary rather 

than solely rely on inspection procedures. Several inspectors also said 

they completed inspection activities whether activities were mandatory or 

discretionary and 37 percent of inspectors explained they viewed words 

such as “should” as indicating a mandatory activity. Further, a 

headquarters director concluded inspectors in the regions and 

headquarters staff responsible for managing the inspection procedures do 

not always interpret inspection procedure mandatory and discretionary 

language the same way. 

Inadequate Controls to Ensure Clarity 

Mandatory and discretionary activities listed in some baseline inspection 

procedures are unclear to NRC inspectors and managers because NRC 

does not have controls in place to ensure clear and consistent language is 

used to differentiate mandatory and discretionary activities. 

 

2

 OIG interviewed 41 staff and managers: 19 resident inspectors, 18 senior agency managers, and 4 staff 

responsible for managing inspection procedures. 

Why This Occurred
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Missing Mandatory Activities, Inadequate Assessment, and 

Inconsistent Inspections 

NRC risks inspectors not performing activities deemed mandatory and 

performing unneeded discretionary activities because mandatory and 

discretionary activities in inspection procedures are unclear. NRC also 

risks inadequate assessment of safety cornerstones and inconsistent 

inspections across regions. 

OIG did not identify specific instances where unclear language led to 

inadequate assessments; however there is additional risk associated with 

how the agency is assured inspectors perform activities deemed 

mandatory in inspection procedures, given the varying interpretations of 

mandatory and discretionary. NRC relies on completion of inspection 

procedures for assurance that each safety cornerstone has had an 

adequate assessment, and this assessment is a key input into NRC’s 

assessment of whether nuclear reactor licensees operate safely. 

Further, unclear language for mandatory and discretionary activities could 

lead to inconsistent inspections. A headquarters director contended that 

sometimes regional staff interpret mandatory and discretionary language 

differently, which leads to inconsistent performance of baseline inspection 

procedures across the regions. 

Recommendations 

OIG recommends that the Executive Director for Operations 

1. Develop and implement controls to ensure mandatory and 

discretionary language used in inspection procedures is clear and 

consistent. 

2. Notify staff and managers of controls developed to ensure that 

mandatory and discretionary language used in inspection 

procedures is clear and consistent. 

Why This Is Important
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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An exit conference was held with the agency on March 23, 2016. Agency 

managers reviewed a discussion draft prior to this meeting. During the 

exit conference, agency managers agreed with the report’s finding and 

recommendations and opted not to provide formal comments for inclusion 

in this report. 

 IV. AGENCY COMMENTS
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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Appendix A 

Objective 

The audit objective was to assess the effectiveness of the ROP in 

discovery of plant performance issues. 

For the purposes of this audit, the assessment of the effectiveness of the 

ROP was limited to an analysis of how inspection procedures were 

written, and understood and performed by agency managers and 

inspection staff. 

Scope 

The audit focused on evaluating inspection procedures used to identify 

plant performance deficiencies. We conducted this performance audit 

from September 2015 through January 2016. Internal controls related to 

the audit objective were reviewed and analyzed. Throughout the audit, 

auditors were aware of the possibility of fraud, waste, and abuse in the 

program. 

Methodology 

OIG reviewed relevant criteria for this audit, including the NRC Inspection 

Manual; Government Accountability Office’s Standards for Internal Control 

in the Federal Government; NRC Management Directive 8.13, Reactor 

Oversight Process; NUREG 1379 Revision 2, NRC Editorial Style Guide; 

and NRC Plain Language Writing Techniques. 

To understand how NRC staff and managers write, interpret, and oversee 

performance of inspection procedures, OIG reviewed additional sources 

such as inspection procedures, inspection reports, and inspection tracking 

tools. OIG also interviewed NRC staff and management from the Office of 

Nuclear Reactor Regulation, Region I, Region II, Region III, Region IV, 

and observed inspections performed by resident and senior resident 

inspectors at nine nuclear power plants throughout the regions. 

 OBJECTIVE, SCOPE, AND METHODOLOGY
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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We conducted this performance audit in accordance with generally 

accepted government auditing standards. 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 

objectives. 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 RK Wild, Team Leader; Paul Rades, Team 

Leader; Levar Cole, Audit Manager; John Thorp, Technical Advisor; Larry 

Vaught, Senior Auditor; Jenny Cheung, Auditor; Roxana Hartsock, 

Auditor; and Janelle Wiggs, Auditor. 
Audit of NRC’s Reactor Oversight Process: Reactor Safety Baseline Inspection Procedures 

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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