UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

September 1, 2015

MEMORANDUM TO: Mark A. Satorius 

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits

SUBJECT: AUDIT OF NRC’S MANAGEMENT OF CHANGE

(OIG-15-A-19)

The Office of the Inspector General (OIG) conducted this audit to assess the efficiency 

and effectiveness of the U.S. Nuclear Regulatory Commission’s (NRC) management of 

change. Change management is essential for maximizing change success, but NRC 

does not have a comprehensive process to manage change because efforts to provide 

an agencywide change management process are incomplete. Consequently, NRC has 

missed opportunities to implement change more efficiently and effectively, and will 

continue to do so without a comprehensive, scalable, agencywide change management 

process. Therefore, OIG makes recommendations to enhance NRC’s process for 

management of change.

Please provide information on actions taken or planned within 30 days of this report.

Actions taken or planned are subject to OIG followup as stated in Management 

Directive 6.1.
Audit of NRC’s Management of Change

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Change and the NRC

As Federal budgets grow and shrink, as economic and environmental 

forces shape energy policy, and as legislative requirements wax and 

wane, the NRC’s regulatory responsibilities—and the way it implements

that oversight—will be subject to change. In just the past 5 years, NRC 

has undertaken several significant change initiatives. For example, in 

2010, NRC initiated a “Transforming Assets into Business Solutions” effort

with the goal of making NRC more effective and efficient by consolidating 

and improving business practices. In 2012, NRC moved some of its 

headquarters staff into a new building, and in 2014 merged two offices into 

one. Additional expected change awaits NRC as the result of “Project AIM 

2020,” which analyzes potential organizational changes to enhance NRC’s

ability to perform its mission in the future.

Managing Change

Change management research and best practices demonstrate that many 

change initiatives fail because managers often skip steps needed to 

implement change or they make critical mistakes while implementing 

change. Change management literature also points to the importance of 

organizations to manage change efficiently and effectively to increase the 

likelihood that change occurs as intended. This research has given rise to

various change management models, such as Kotter1 and ADKAR,2to 

provide structure for managing change. 

 

1 The Kotter model, developed by John Kotter, is a change management methodology based on success 

factors identified in organizations and leaders undertaking transformations or executing change.

2 The ADKAR model was developed by the Change Management Learning Center of Prosci as a tool to 

consolidate and interpret the vast array of change management approaches and guidance into a simple, 

effective model and tool. Prosci focuses on offering change management products and training 

programs.

BACKGROUND
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While there is no one-size-fits-all process or absolute guarantee that 

change occurs as intended, an orderly approach to managing change 

increases the likely success of the intended change. Moreover, a good 

change management process is scalable, meaning that it takes a graded 

approach to each change. A scalable process encourages organizations 

to apply more structure, oversight, and effort to more significant and 

potentially difficult changes, while allowing flexibility to use a less rigorous 

approach for less significant changes.

The audit objective was to assess the efficiency and effectiveness of 

NRC’s management of change. 

OBJECTIVE
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Change management is essential for maximizing change success. 

However, NRC does not have a comprehensive change management 

process available for use agencywide. There are some efforts to provide 

an agencywide change management process, but these efforts are 

incomplete. Consequently, NRC missed opportunities to implement 

change more efficiently and effectively, and will continue to do so without 

a comprehensive, scalable agencywide change management process.

Need for a Change Management Process

Change management is essential for maximizing change success and 

NRC is cognizant of that need. In fact, NRC has officially extolled the 

virtues of a change management process via official agency documents 

and an independent contractor report.

In 2010, NRC developed an Open Government Plan in response to a 

White House initiative to make Government more open and transparent to 

the public. NRC’s Open Government Plan describes a framework to make 

the agency more open and accessible. An entire subsection of NRC’s 

Open Government Plan is devoted to managing change, and commences 

with the recognition that “The NRC recognizes that without a change

management process, systemic change will not happen.” The Open 

Government Plan concludes that a concerted focus on change 

management will help the agency achieve the goal of increased 

openness.

More recently, the NRC Executive Director for Operations announced to 

agency staff the results of an independent contractor’s effort to review 

ways in which NRC could reduce corporate support requirements and 

What Is Required

AUDIT RESULTS
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improve the efficiency of internal processes. The contractor reported its 

findings in April 2015. The report provides a number of critical success 

factors associated with more efficient operations. One such critical 

success factor relates to change management. The report emphasizes 

the importance of being thoughtful and intentional about change 

management to help overcome cultural resistance and expedite change 

adoption.

No Comprehensive Agencywide Change Management Process 

NRC does not have a comprehensive change management process 

available for use agencywide. To ascertain the extent to which NRC has 

an agencywide change management process, auditors met with more 

than 30 key agency executives—to include a wide assortment of office 

directors and regional administrators—as well as selected branch chiefs 

and internal change management specialists. These officials agree that 

NRC does not have a comprehensive, actionable agencywide process to 

use as a roadmap to manage change. 

Nonetheless, agency officials indicated that they take steps to manage 

change, primarily embodied through NRC leaders’ experience, skills, and 

qualifications. These steps include a manager’s personal experience and

training, as well as the “Leading Change” qualification skill that Senior 

Executive Service members are expected to demonstrate. Some agency 

managers noted that personal experience with managing change has 

been variably successful and unsuccessful, at times describing the current 

approach to managing change as “situational” and “fly by the seat of your 

pants” without the support of procedures.

OIG also reviewed some elements of a change management process 

within agency offices. These include an Office of Information Services 

(OIS) change management process and an Office of New Reactors effort 

to develop a change management process for the construction inspection 

program. Neither of these approaches are designed for agencywide use. 

Furthermore, when asked about using a change management process, 

one director did not recall an office change management procedure.

What We Found
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Agencywide Change Management Efforts Are Incomplete

There are some efforts to provide an agencywide change management 

process, but these efforts are incomplete. These include an Office of the 

Chief Human Capital Officer (OCHCO) change management framework, 

and some change management-related training available to agency staff 

and managers.

In 2013, OCHCO developed a change management framework for use by 

agency managers. It consists largely of a PDF document depicting 

phases of change (as shown in enclosure 1) and supporting definitions, as 

well as a “Change Readiness” checklist. A major shortfall with the 

framework is that many managers were not even aware that these 

resources exist. For example, more than half of the agency executives 

interviewed for this audit did not know that such a framework had been 

developed. Some managers observed that it is not particularly useful in 

that the framework is not detailed enough for use as a roadmap for 

implementing change. 

The agency also provides some change management-related training to 

agency staff and managers. For example, OCHCO provided a senior 

leadership seminar in 2013 consisting of a broad overview to navigating 

change. Additionally, the agency’s “iLearn” training resource provides 

self-paced, Web-delivered, non-compulsory courses and supplemental ebooks related to understanding, dealing with, and leading change. 

However, these training resources are largely of a generic, conceptual 

nature, and do not reference and are not linked to the OCHCO framework.

Why This Occurred
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Missed Opportunities To Implement Change More Efficiently and 

Effectively 

NRC has missed opportunities to implement change more efficiently and 

effectively, and will continue to do so without a comprehensive, scalable, 

agencywide change management process. Two recent agency 

assessments—one on a program consolidation effort, the other related to 

construction inspection—emphasize how a change management process

would have likely optimized change success.

In 2010, NRC undertook the Transforming Assets into Business Solutions 

initiative, which was a long-term plan to make NRC more effective and 

efficient by consolidating and improving business practices. The 

implementation of this initiative is widely seen as being less successful 

than it could have been. A 2015 staff report to the Commission on the 

Transforming Assets into Business Solutions included lessons learned on 

the initiative. The report emphasizes the importance of managing change 

in association with a number of implementation shortcomings. For 

example, it faulted the use of several different approaches to change 

because each individual leader had his or her own idea about managing 

change for an agencywide initiative that should have been managed 

through a single, agencywide approach to change. The report reasonably 

concludes at one point that “Agency initiatives should be supported by a 

change management specialist and reinforce the essential elements of an 

effective change management process.”

In 2012, OIG reported the results of an audit related to the agency’s 

construction inspection program for new reactors.3 OIG determined that 

the agency needed to develop and implement a change management 

process to address communication and coordination challenges that could 

adversely affect the degree to which new nuclear power plants are safely 

constructed. Agency officials communicated the intent to develop an 

 

3 Audit of NRC’s Inspections, Tests, Analyses, and Acceptance Criteria (ITAAC) Process, OIG-12-A-16, 

July 12, 2012.

Why This Is Important
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agencywide approach to change management. Currently, the agency is 

developing a program-specific approach. 

NRC is likely on the precipice of significant enterprisewide change. This is 

as much acknowledged by the agency’s “Project AIM 2020” initiative, 

which was established in June 2014 to enhance the agency’s ability to 

plan and execute its mission while adapting in a timely and effective 

manner to a dynamic environment. To do so, the Project AIM 2020 Team 

“developed alternative scenarios using foresight methods to assist and 

inform a gap analysis comparing the current state of the agency and the 

challenges and trends the agency may need to face between 2014 and 

2020.” The Project AIM 2020 Team’s efforts resulted in a report, 

submitted to the Commission in January 2015 that offers key overarching 

strategies for meeting the change-related challenges envisioned for the 

coming years. 

While the Project AIM 2020 Team’s report frequently speaks of the 

importance of managing change, it offers little in the way of ensuring the 

tools for managing that change are in place. The absence of tools to 

sustain the change effort was noted in a March 2015 report to NRC by the 

National Academy of Public Administration (NAPA), which was contracted 

to provide feedback on the Project AIM 2020 Team’s report. The NAPA 

report emphasizes the importance of sustaining change over the longterm, and notes that systematic steps are needed that can be used to 

guide agency transformation. It points to NRC’s siloed approach to work 

processes and outputs, and exhorts the agency to embrace a cohesive 

and integrated approach to change. OIG contends that completing and 

effectively promoting the change management framework initiated by 

OCHCO will help the agency meet the challenges noted in NAPA’s report.

Recommendations

OIG recommends that the Executive Director for Operations:

1. Complete the agencywide change management framework initiated by 

OCHCO with actionable steps, guidance, and checklists, as appropriate.

Conclusions
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2. Promote the completed framework, agencywide, as a tool available to all 

managers and staff for guiding change. 

3. Provide training and/or training resources to management and staff that is 

geared specifically to implementing the completed framework.

An exit conference was held with the agency on August 27, 2015. Agency 

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

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

recommendations and opted not to provide formal comments for inclusion 

in this report. 

This audit focused on evaluating the efficiency and effectiveness of NRC’s 

management of change. We conducted this performance audit from 

March 2015 through June 2015 at NRC headquarters in Rockville, MD, 

and Regions I, II, III, and IV, through interviews, telephone, and email. 

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.

To address the audit objective within the scope of this audit, OIG auditors 

reviewed the following Federal and industry documents, key data, and 

NRC documents:

• Highlights of a GAO Forum: Mergers and Transformation, 

Lessons Learned for a Department of Homeland Security and 

SCOPE AND METHODOLOGY

AGENCY COMMENTS
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Other Federal Agencies, Government Accountability Office 

(GAO), GAO-03-293SP, November 2002.

• Results Oriented Cultures, Implementation Steps to Assist 

Mergers and Organizational Transformations, GAO, GAO-03-

669, July 2003.

• Migration Planning Guidance Information Documents: Change 

Management Best Practices, U.S. Office of Personnel 

Management, May 23, 2008.

• Audit of NRC’s Inspections, Tests, Analyses, and Acceptance 

Criteria (ITAAC) Process, OIG-12-A-16, July 12, 2012.

• 2010 Open Government Plan, Revision 1.1, NRC, June 7, 2010.

• Achieving Exemplary Nuclear Regulation in the 21st Century 

Report on Project Aim 2020, NRC, January 2015.

• SECY-15-0008, Report to the Commission on the Transforming 

Assets into Business Solutions Initiative, NRC, January 16, 

2015. 

• NRC Overhead Assessment, Final Report, Ernst and Young, 

April 30, 2015.

• NRC’s Change Management Framework, April 25, 2013.

• Business Process Change Management Procedures, OIS-0203, 

Revision 1, March 30, 2005.

• Leading Change, and additional materials from Kotter, John P., 

1994-2012.

• ADKAR: A Model for Change in Business, Government and Our 

Community, Hiatt, Jeffrey M., 2006.

• Feedback Report on the Nuclear Regulatory Commission’s 

Project Aim 2020 Report, March 2015.
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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 

audit 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; Levar Cole, Audit 

Manager; Vicki Foster, Audit Manager; Kevin Nietmann, Senior Technical 

Advisor; Tim Wilson, Senior Analyst; Roxana Hartsock, Auditor; Ebaide 

Esoimeme, Auditor; and Tariq Noaman, Analyst.
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Enclosure 1
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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.

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