AUDIT REPORT

Audit of NRC’s Budget Execution Process

OIG-13-A-18 May 7, 2013

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

May 7, 2013

MEMORANDUM TO: J.E. Dyer

Chief Financial Officer

R. William Borchardt

Executive Director for Operations

FROM: Stephen D. Dingbaum /RA/

Assistant Inspector General for Audits

SUBJECT: AUDIT OF NRC’S BUDGET EXECUTION PROCESS

(OIG-13-A-18) 

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

Budget Execution Process. The report presents the results of the subject audit. 

Agency comments provided at the April 4, 2013, exit conference and subsequent 

discussions have been incorporated, as appropriate, into 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 follow up 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 

415-5915 or Eric Rivera, Team Leader, Financial and Administrative Audits Team, at 

415-7032.

Attachment: As stated 
Audit of NRC’s Budget Execution Process

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EXECUTIVE SUMMARY

BACKGROUND

The U.S. Government requires Federal agencies to establish an effective 

funds control process to ensure funds are used only for the purpose set 

forth by Congress and that expenditures do not exceed amounts 

authorized. The Nuclear Regulatory Commission’s (NRC) budget process 

consists of strategic planning; budget formulation; submission of the 

agency’s budget to the Office of Management and Budget and Congress; 

approval of the budget by Congress; budget execution; and the reporting of 

budget and performance results. The budget execution phase refers 

generally to the time period during which the budget authority made 

through an appropriation remains available for obligation by NRC. NRC’s 

task during the budget execution process is to spend appropriated funds to 

carry out its mission in accordance with fiscal statutes. Between fiscal 

years (FY) 2008 and 2012, NRC’s budget appropriation ranged from 

$926.1 million to $1,066.9 million.

OBJECTIVES

The audit objectives were to determine whether (1) NRC maintains proper 

financial control over appropriated and apportioned funds to ensure 

compliance with applicable Federal laws, policies, and regulations and 

(2) opportunities exist to improve the budget execution process.

RESULTS IN BRIEF

Overall, the agency maintains proper financial control over appropriated 

and apportioned funds to ensure compliance with applicable Federal laws, 

policies, and regulations. However, the Office of the Inspector General 

(OIG) identified opportunities for improvement in the following areas: 

A. Incomplete implementation of Planning, Budgeting, and 

Performance Management process.
Audit of NRC’s Budget Execution Process

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B. Insufficient understanding of Financial Accounting and 

Integrated Management Information System reporting 

capabilities.

C. Incomplete delegation and budget execution training records.

Addressing these concerns will strengthen NRC’s budget execution 

process.

RECOMMENDATIONS

This report makes recommendations to improve the internal controls over 

the management of budget execution. A list of these recommendations

appears on page 20 of this report.

AGENCY COMMENTS

OIG met with NRC management officials and staff at an April 4, 2013, exit 

conference, at which time the agency provided informal comments to the 

draft report. The informal comments were incorporated into the draft report 

as appropriate. NRC management and staff reviewed the revised draft 

report and agreed with the findings and recommendations. The agency 

opted not to provide formal comments for inclusion in this final report.
Audit of NRC’s Budget Execution Process

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ABBREVIATIONS AND ACRONYMS

FAIMIS Financial Accounting and Integrated Management Information 

System

FY fiscal year

GAO Government Accountability Office

MD Management Directive

NRC Nuclear Regulatory Commission

OCFO Office of the Chief Financial Officer

OIG Office of the Inspector General
Audit of NRC’s Budget Execution Process

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................ i

ABBREVIATIONS AND ACRONYMS........................................................iii

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

II. OBJECTIVES..................................................................................6

III. FINDINGS .......................................................................................6

A. INCOMPLETE IMPLEMENTATION OF 

PLANNING, BUDGETING, AND PERFORMANCE

MANAGEMENT PROCESS.......................................................7

B. INSUFFICIENT UNDERSTANDING OF FAIMIS 

REPORTING CAPABILITIES...................................................12

C. INCOMPLETE DELEGATION AND BUDGET 

EXECUTION TRAINING RECORDS .......................................15

IV. CONSOLIDATED LIST OF RECOMMENDATIONS .....................20

V. AGENCY COMMENTS .................................................................21

APPENDICES

A. OBJECTIVES, SCOPE, AND METHODOLOGY .....................22

B. FY 2011 PROGRAM BUDGET LEAD OFFICE 

RESPONSIBILITIES ................................................................24

C. FY 2011 BUDGET EXECUTION STRUCTURE ......................25
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I. BACKGROUND

The U.S. Government requires Federal agencies to establish an effective 

funds control process to ensure funds are used only for the purpose set 

forth by Congress and that expenditures do not exceed amounts 

authorized. There are laws and regulations that guide the implementation 

of Federal fiscal policy. These laws and regulations play an integral role in 

the budget process and establish the rules and restrictions governing 

Federal obligations and spending.

1 Agencies maintain policy directives for 

the effective management of funds to implement the requirements set forth 

in those Federal laws and regulations. 

The complete budget execution cycle includes eight steps (see Figure 1): 

Step 1: Congress must pass an appropriations act for the fiscal year 

(FY)2before any funds become available.3 An appropriation is a form of 

budget authority which is an act of Congress that provides legal authority 

for agencies to incur obligations and to make payments. 

Step 2: The Office of Management and Budget provides apportionments 

of funds, usually on a quarterly basis, to Federal agencies to make money 

available for use for specified time periods, programs, activities, projects, 

objects, or any combination of these.

Step 3: An apportionment may be further subdivided by an agency into 

allotments. At the Nuclear Regulatory Commission (NRC), the Director of 

the Division of Planning and Budget within the Office of the Chief Financial 

Officer (OCFO) receives allotments.

 

1

The administrative control of funds at Federal agencies must satisfy the requirements set forth in Office of 

Management and Budget Circular A-11, Preparation, Submission, and Execution of the Budget.

2

The Federal fiscal year begins on October 1st of the calendar year.

3

Agencies can also operate under a continuing resolution, which is legislation in the form of a joint resolution 

enacted by Congress, when the fiscal year is about to begin or has begun, to provide budget authority for Federal 

agencies and programs to continue in operation until the regular appropriations acts are enacted.
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Figure 1: Budget Execution Process

Source: OCFO

Step 4: The Director of the Division of Planning and Budget issues 

allowances to officials who assume supervisory authority and fiduciary 

responsibilities for financial plans and allowances issued to them. 

Step 5: Commitments represent a reservation of funds for a possible 

future liability. 

Step 6: Obligations represent an actual liability for goods and services.4

 

4

Federal law requires agencies to obligate money in accordance with its lawful purpose, time, and amount limits in

the appropriation. The purpose of the obligation must be authorized, occur within applicable time limits, and be 

within congressionally established funding limits.
Audit of NRC’s Budget Execution Process

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Step 7: Expenditures are the issuance of checks, the disbursement of 

cash, or the making of an electronic funds transfer to liquidate (pay) 

obligations.

Step 8: Deobligations and contract closeout represent the cancellation 

or downward adjustment of a previously recorded obligation.

NRC’s Budget Process

NRC’s budget process consists of strategic planning; budget formulation, 

submission of the agency’s budget to the Office of Management and 

Budget and Congress; approval of the budget by Congress; budget 

execution; and the reporting of budget and performance results. The 

budget execution phase refers generally to the time period during which the 

budget authority made through an appropriation remains available for 

obligation by NRC. NRC’s task during the budget execution process is to 

spend appropriated funds to carry out its mission in accordance with fiscal 

statutes. NRC must also ensure that funds are managed in the most 

efficient and effective manner and business line5results are communicated 

to agency management and Congress. 

Between FYs 2008 and 2012, NRC’s budget appropriation ranged from 

$926.1 million to $1,066.9 million (see Figure 2). In FY 2011, NRC’s timekeeping system recorded approximately 50 full-time equivalents in support 

of budget execution activities.

 

5

A business line is a component part of the agency under the direction of a “responsible lead office” (e.g., Office of 

New Reactors). Examples of a business line include High Level Waste, New Reactors, and Financial Management. 

Business lines often include supporting offices (e.g., Office of Nuclear Regulatory Research does not lead a business 

line, but has a supporting role for several business lines). See Appendix B for a full list of NRC business lines. 
Audit of NRC’s Budget Execution Process

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Figure 2: NRC’s Appropriations from FYs 2008 Through 2012

Source: OIG analysis of NRC information

Budget Execution Roles and Responsibilities 

Office of the Chief Financial Officer 

The Chief Financial Officers Act of 1990 (Public Law 101-576) requires 

each agency’s Chief Financial Officer to monitor the financial execution of 

the agency’s budget, and prepare and submit to the head of the agency 

timely performance reports. NRC’s OCFO responsibilities include:

Monitoring the actual expenditures in relation to NRC's budget.

Controlling the use of agency funds to ensure that they are 

expended in accordance with applicable laws and standards.

850.0 

900.0 

950.0 

1,000.0 

1,050.0 

1,100.0 

2008 2009 2010 2011 2012

Appropriation in $ (millions)

Fiscal Year

Annual Appropriation
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Developing and maintaining an integrated agency accounting 

and financial management system. On October 1, 2010, NRC 

implemented the Financial Accounting and Integrated 

Management Information System (FAIMIS) as the official 

system of record for agency financial operations.

The Division of Planning and Budget manages NRC’s budgeting functions,

including developing and executing NRC’s annual budget. This division 

also develops financial reports to support agency strategic planning, and 

program evaluation. The Division of Planning and Budget Director 

delegates to agency officials, usually office directors (designated as 

allowance holders), authority to receive allowances. 

NRC Budget Execution Delegation Responsibilities

Figure 3 shows the hierarchy of NRC’s budget execution delegations:

Figure 3: Delegation Hierarchy

Director of Division of Planning and Budget:

Issue allowances to agency allowance holders

Allowance Holder:

Commit and obligate funds in accordance with 

purpose, time, and amount restrictions6

Maintain financial records for their allowance

Reconcile office records to NRC financial system

Delegate authority to either an allowance financial 

manager or funds certifying official

Allowance Financial Manager:

Management of allowance on a day-to-day basis

Delegate authority to funds certifying official

Funds Certifying Official:

Verifies availability of funds prior to entering an 

obligation in the NRC financial system

 Source: OIG analysis of OCFO information

 

6

The purpose of the obligation or expenditure must be authorized, the obligation must occur within the time limits 

applicable to the appropriation, and the obligation and expenditure must be within the amount Congress has 

established.
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II. OBJECTIVES

The audit objectives were to determine whether (1) NRC maintains proper 

financial control over appropriated and apportioned funds to ensure 

compliance with applicable Federal laws, policies, and regulations and 

(2) opportunities exist to improve the budget execution process. See 

Appendix A for information on the audit scope and methodology.

III. FINDINGS

Overall, the agency maintains proper financial control over appropriated 

and apportioned funds to ensure compliance with applicable Federal laws, 

policies, and regulations. However, the Office of the Inspector General 

(OIG) identified opportunities for improvement in the following areas: 

A. Incomplete implementation of Planning, Budgeting, and 

Performance Management process.

B. Insufficient understanding of FAIMIS reporting capabilities.

C. Incomplete delegation and budget execution training records.

Addressing these concerns will strengthen NRC’s budget execution 

process.
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A. Incomplete Implementation of Planning, Budgeting, and Performance 

Management Process

NRC developed the Planning, Budgeting, and Performance Management 

process to integrate NRC’s (1) strategic planning, (2) budget formulation

(resource determination process), (3) budget execution (or monitoring 

performance process), and (4) performance assessment activities. 

However, NRC’s budget formulation and execution processes are not 

aligned. Although the agency recognizes this problem, management has 

not yet implemented all the elements in the Planning, Budgeting, and 

Performance Management process, and has not enforced the use of 

certain financial management system codes. As a result, NRC’s current

budget process inhibits the agency’s ability to determine agency business 

line costs. 

The Planning, Budgeting, and Performance Management Process 

NRC’s Planning, Budgeting, and Performance Management process 

represents the agency’s planned integrated approach to budgeting with the 

overall goal of linking budgeting to outcomes. The Government 

Performance and Results Act of 1993, required Federal agencies to 

establish a strategic planning and performance measurement process. In 

1999, the agency introduced the Planning, Budgeting, and Performance 

Management process (see Figure 4) to implement the Government 

Performance and Results Act requirements. This process includes the 

following steps: (1) strategic planning, (2) determining resource needs and 

budget formulation, (3) monitoring performance and budget execution, and 

(4) program assessment. The intent of the Planning, Budgeting, and 

Performance Management process is to implement a disciplined, 

integrated process where achieving desired results drives the work to be 

accomplished and the resources necessary to complete that work. 
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Figure 4: NRC’s Planning, Budgeting, and Performance Management Process

Source: OCFO

Budget Formulation and Execution Are Not Aligned

NRC’s budget formulation and execution processes are not aligned. In 

practice, NRC’s budget formulation is based on business lines but 

executed at the allowance holder level. Moreover, inconsistent use of 

financial management system codes further inhibits budget 

implementation.
Audit of NRC’s Budget Execution Process

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Business Line-Based Formulation/Allowance Holder-Based Execution

NRC established a budget formulation process where staff develop the 

budget by projecting the costs of business lines. The budget formulation 

process is led by agency offices responsible for approximately 17 business 

lines (see Appendix B for the FY 2011 Program Budget Lead Office 

Responsibilites). Some agency offices may not have the lead on a 

particular business line but may still expend money associated with the 

same business line. All agency offices involved with the same business 

line are expected to work collaboratively to formulate the budget.

Although the budget is formulated along business lines, NRC executes the 

budget by tracking funds at the allowance holder level (see Appendix C for 

the FY 2011 Budget Execution Structure). For example, an NRC office

may have the lead on two business lines that cross multiple offices. During 

budget execution, that same office controls expenditures only within its

office. 

However, in recent years OCFO has made numerous efforts to provide 

allowance holders and business line leaders more detailed budget 

information. While the agency has already made the change to business 

line approach in the budget formulation process, the funds control process

still reflects the allowance holder structure. OCFO believes that the 

current structure provides for better internal controls.

Financial Management System Coding 

Currently, there are few controls over financial management system codes. 

All financial transactions in FAIMIS require coding to identify fiscal year, 

funding source, and other pertinent information. In addition, FAIMIS 

transactions require job codes7and budget object codes.8 OIG obtained a 

list of job codes and noted that some job codes can cover a broad range 

 

7

A job code is a budgeting code that defines a specific NRC project. All NRC commitment and obligation 

transactions require the designation of a job code. Job codes refer to the activity performed, for example, reactor 

inspection, and secretarial support.

8

The budget object classification code classifies budget activity by type of cost (e.g., supplies, equipment, or 

personnel).
Audit of NRC’s Budget Execution Process

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of agency activities. Conversely, some codes are so specific that they refer 

only to a portion of an activity. There were more than 2,800 job codes 

specific to FY 2011. Managers stated there is a lot of flexibility in creating 

and applying job codes, which makes it difficult to track business line costs. 

In addition, budget object code use is inconsistently enforced and 

understood. Budget object codes indicate type of item acquired, such as 

training and telephone services. Each fiscal year, OCFO issues a list of 

budget object codes; however, according to agency managers the use of

budget object codes is inconsistently enforced. 

Planning, Budgeting, and Performance Management Process Not 

Fully Implemented 

Although the agency has taken some steps to implement the Planning, 

Budgeting, and Performance Management process, implementation is 

incomplete. OCFO recognizes this and has taken the following steps to 

facilitate improvements:

1. An internal study by OCFO to analyze the current budget 

process illustrated the need to fully implement Planning, 

Budgeting, and Performance Management. Specifically, this 

study highlighted the lack of integration between budget 

formulation and execution. 

2. OCFO has drafted a management directive to establish a 

performance-based process of strategic planning, budgeting, 

and program management. 

3. During FY 2010, the agency initiated the Transforming Assets 

into Business Solutions task force, reflecting the agency’s 

ongoing effort to streamline the budget process. 

Further, there is no standard agency guidance for using job codes. During 

the course of this audit, OCFO initiated a working group to standardize, 

optimize, and simplify job code usage. OCFO plans to release standard 

job code guidance after the efforts of this working group are completed.
Audit of NRC’s Budget Execution Process

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Although OCFO issues a list of budget object codes each fiscal year, use 

of these codes is not enforced during budget execution. Two agency 

managers stated that not all managers use correct budget object codes. 

OCFO officials acknowledged that the enforcement of the consistent use of 

budget object codes needs to be improved. 

Business Line Costs Are Unclear 

The current budget structure inhibits the agency’s ability to determine 

accurate business line costs. Improved capabilities to determine business 

line costs would allow the agency to make more effective cost 

management decisions. Some OCFO senior officials acknowledged that 

the current structure does not allow the agency to fully determine what 

offices are spending. By fully implementing the agency’s Planning, 

Budgeting, and Performance Management process and enhancing

financial management system coding, NRC will have more reliable budget 

execution information. 

Recommendations

OIG recommends that the Chief Financial Officer:

1. Complete implementation of NRC’s Planning, Budgeting, and 

Performance Management process.

2. Issue standardized agency guidance for using job codes.

3. Enforce the use of correct budget object codes. 
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B. Insufficient Understanding of FAIMIS Reporting Capabilities

NRC staff do not fully understand how to obtain budget information from

FAIMIS that would be useful for decisionmaking. According to the 

Government Accountability Office’s (GAO) Standards for Internal Control in 

the Federal Government,

9

program managers need both operational and 

financial data to determine whether they are meeting agency goals. 

However, the agency has not provided sufficient training on FAIMIS 

reporting functionalities and report availability. Without a full understanding 

of system capabilities to access budget information, staff may not have the 

data needed to make informed business decisions.

Access to Budget Data 

GAO standards for internal control require that program managers have 

access to both operational and financial data to effectively manage 

resources. This information is necessary both for long-term strategic 

planning purposes and day-to-day management. 

Insufficient Understanding of How To Obtain FAIMIS Data 

Agency staff have difficulty obtaining and understanding FAIMIS reports. 

In October 2010, NRC began using FAIMIS as the agency’s core financial 

system and the official system of record for budget transactions. OIG 

conducted multiple interviews with staff throughout the agency who work 

on budget execution and learned that staff have difficulty obtaining and 

understanding budget execution reports. Those interviews revealed 

common concerns regarding FAIMIS reporting capabilities. These

concerns include:

Standard budget reports are difficult to understand. This has 

led some offices to rely on supplementary reports developed 

by OCFO staff and ad hoc systems. For example, staff 

surveyed by OIG rely on a manually prepared agencywide 

report run daily by an OCFO staffer rather than developing a 

report specific to their budget using FAIMIS.

 

9

GAO/AIMD-00-21.3.1, Standards for Internal Control in the Federal Government, issued November 1999.
Audit of NRC’s Budget Execution Process

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The tool to develop custom reports in FAIMIS, Business 

Analytics, is difficult to use, which discourages staff from 

using it. 

FAIMIS reports do not provide all the information that 

managers require in one report. Staff have to review budget 

totals from two or more FAIMIS reports to obtain a complete 

picture of their office’s budget. 

Additional FAIMIS Training Needed

Although the agency has offered training on FAIMIS, additional training is 

needed on the system’s report functionalities and features. The agency 

offered significant training opportunities before FAIMIS was implemented 

on October 1, 2010. Since then, there has been limited training provided to 

agency staff on FAIMIS reporting capabilities. 

Further, OCFO has not developed a process to ensure FAIMIS report 

training meets user needs.

OCFO management acknowledge that FAIMIS reports have been a 

challenge for program staff to obtain and understand. Several OCFO 

managers agreed more training should be provided. OCFO staff plans to 

work with agency staff to identify the right training needs and then add 

training courses based on staff feedback.

In addition, to address immediate staff concerns, OCFO created a FAIMIS 

Reports Working Group to prioritize and develop requested custom reports. 

OCFO management also plans to address staff concerns by automating 

the daily report prepared manually by the OCFO staff member.

Potential for Less than Optimal Business Decisions 

Without a full understanding of system functionalities to access budget 

information, staff may make less than optimal business decisions. OCFO 

staff stated that some agency staff involved with budget execution do not 

have a full understanding of FAIMIS reporting features. As a result, at 

times, staff find it hard to retrieve financial information necessary to 
Audit of NRC’s Budget Execution Process

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effectively and efficiently administer their business lines. Enhancing NRC 

staff knowledge of FAIMIS reporting functionalities would improve the 

agency’s ability to execute the budget to meet strategic goals and 

objectives. 

Recommendations

OIG recommends that the Chief Financial Officer:

4. Develop a process to define training needs and measure the 

effectiveness of agency training provided on FAIMIS reporting 

functions, features, and capabilities.

5. Provide training to agency staff on FAIMIS reporting functions, 

features, and capabilities.
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C. Incomplete Delegation and Budget Execution Training Records

According to Federal and agency guidance, NRC must maintain 

appropriate records and make such documentation available. However, 

supporting documents regarding financial management delegations and 

budget execution training are incomplete. This has occurred because 

management does not have written recordkeeping procedures for 

maintaining these documents. In addition, agency guidance does not 

specify whether allowance holder delegations should be to the position or 

specific individual. Without appropriate documentation, individuals may be 

executing transactions outside their authority.

Delegation and Training Documentation Requirements 

The Chief Financial Officers Act of 1990 contains requirements regarding 

agency delegation responsibilities. Specifically, the Chief Financial Officers 

Act of 1990 authorized NRC’s Chief Financial Officer to direct and manage 

the selection and training of personnel to carry out agency financial 

management functions. 

GAO’s standards for internal control contain guidance on agency 

delegations. Specifically, access to resources and records should be 

limited to authorized individuals and supporting documentation should be 

readily available for review. This control ensures that transactions and 

other significant events are authorized and executed only by persons 

acting within the scope of their authority. GAO’s guidance requires that 

delegations for key areas of authority be clearly communicated to 

managers and employees.

NRC Guidance 

NRC Management Directive (MD) 4.2, Administrative Control of Funds, 

contains guidance on delegations. Regarding allowance holders, MD 4.2 

provides that the budget director has the responsibility to delegate and 

rescind authority from agency allowance holders. This directive provides 

explicit guidance for delegating authority (1) from allowance holders to 

allowance financial managers and (2) redelegating authority to funds 
Audit of NRC’s Budget Execution Process

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certifying officials. In both cases, these delegations of authority must be in 

writing and specific to an individual. 

MD 4.2 also contains requirements for the recordkeeping of delegation

supporting documents. Specifically, OCFO is responsible for maintaining 

records for both allowance financial managers and funds certifying officials. 

Offices are required to maintain delegation documentation for their funds 

certifying officials.

MD 4.2 further identifies training requirements for allowance financial 

managers and funds certifying officials.

10

 Specifically, allowance financial 

managers and funds certifying officials must complete two NRC courses11

related to budget execution. The courses are to be completed before 

individuals are assigned as an allowance financial manager or a funds 

certifying official, or as soon as these courses become available. 

OCFO staff stated that their internal Web site contains the official list of 

delegations to allowance holders, allowance financial managers, and funds 

certifying officials. Further, OCFO maintains the source documentation to 

support this list.

Incomplete Documentation 

NRC does not maintain complete supporting documentation regarding 

financial management delegations for allowance financial managers and 

funds certifying officials listed on OCFO’s Web site. In addition, OIG was 

not provided with documentation regarding completion of mandatory

training for allowance financial managers and funds certifying officials

during fieldwork. OCFO staff stated they use Office of the Chief Human 

Capital Officer records from the agency’s official training system to verify 

course completion. 

Finally, the agency is not consistent as to whether delegations for 

allowance holders apply to the position or individual.

 

10 There are no training requirements for allowance holders.

11 These two mandatory courses are Financial Management Seminar and Administrative Control of Funds. 
Audit of NRC’s Budget Execution Process

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Allowance Financial Manager Delegation Documentation

OCFO documentation regarding allowance financial manager delegations 

is incomplete. OIG obtained a list of allowance financial managers from 

OCFO’s internal Web site12 (the official list) and compared it to the 

supporting documentation on file in OCFO. While the official list included 

15 allowance financial managers, there was documentation in OCFO for 

only 10 allowance financial managers.

Funds Certifying Official Delegation Documentation

OCFO and program office supporting documentation regarding funds 

certifying official delegations are incomplete. OIG obtained the official list 

of 74 funds certifying officials from the Web site and compared this list to 

delegations on file in OCFO and program offices. OCFO and office files 

did not include all funds certifying officials on the official list, and included 

13 additional individuals. Figure 5 shows the results of OIG’s analysis. A 

“Yes” indicates OIG found the name on the internal Web site or supporting 

documentation in either OCFO or program office files. A “No” indicates the 

name was not on the internal Web site list, or supporting documentation 

was unavailable. 

FIGURE 5: OIG Analysis of Funds Certifying Official Delegation 

Documentation13

Internal Web site OCFO Program Office Total Percent

Yes Yes Yes 68 78%

Yes Yes No 0 0%

Yes No Yes 5 6%

Yes No No 1 1%

No Yes Yes 7 8%

No No Yes 6 7%

No Yes No 0 0%

Total 87 100%

Source: OIG analysis of NRC information.

 

12 OIG obtained this list as of April 27, 2012, for analysis.

13 The supporting documentation was compared to internal Web site information as of April 27, 2012, and 

supporting documentation was acquired in June 2012 with adjustments made to account for known timing 

differences.
Audit of NRC’s Budget Execution Process

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Training Documentation for Funds Certifying Officials and Allowance 

Financial Managers

For allowance financial managers, OCFO provided a list showing 9 of 15 

had taken both mandatory courses. For funds certifying officials, OCFO 

provided a list showing 55 of 74 had taken the mandatory courses. On 

May 1, 2012, OCFO sent notification to allowance financial managers 

identifying allowance financial managers and funds certifying officials who 

were not fully trained and requested individuals not in compliance take 

the necessary courses in the near future. Also, as of the end of fieldwork 

for this audit, OCFO sent allowance financial managers and funds 

certifying officials a memorandum reminding them of the training 

requirement.

Allowance Holder Delegation

NRC is not consistent as to whether delegations for allowance holders 

apply to the position or individual. For example, several staff stated that 

these delegations apply to the position, not to the individual. However, 

agency staff could not provide any evidence to support this statement. In 

addition, OIG could not find any agency document that clarified this issue.

Unclear Recordkeeping Requirements 

NRC does not have written recordkeeping procedures for maintaining 

delegation and training documents for funds certifying officials and 

allowance financial managers. While MD 4.2 requires that delegations be 

documented and training be completed by funds certifying officials and 

allowance financial managers, it does not provide guidance on retaining 

written delegations and training records. OCFO confirmed that there are 

no office procedures for maintaining written delegations and training 

information. 

Additionally, agency guidance is unclear as to whether delegations for 

allowance holders apply to the position or to the individual. OCFO agreed 

with OIG that allowance holder delegations should be addressed and 

subsequently issued clarifying guidance that allowance holder delegations 

are to the position. 
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19

Potential Exists for Unauthorized Budget Transactions 

The lack of adequately documented delegations and training information 

increases the potential for staff to review and control budget data outside 

their authority, thereby potentially leading to fraud, waste, and misuse. The

delegation process is a fundamental internal control for ensuring that only 

authorized individuals are executing NRC’s budget. By enhancing NRC’s 

delegation process and enforcing training requirements, NRC will have 

more effective internal controls over the budget execution process. 

Recommendations

OIG recommends that the Chief Financial Officer:

6. Develop recordkeeping procedures to track delegations.

7. Develop recordkeeping procedures to track training 

documentation for allowance financial managers and funds 

certifying officials.

8. Incorporate clarified guidance on position delegations for 

allowance holders in MD 4.2, which is currently under revision.
Audit of NRC’s Budget Execution Process

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IV. CONSOLIDATED LIST OF RECOMMENDATIONS

OIG recommends that the Chief Financial Officer:

1. Complete implementation of NRC’s Planning, Budgeting, and 

Performance Management process.

2. Issue standardized agency guidance for using job codes.

3. Enforce the use of correct budget object codes. 

4. Develop a process to define training needs and measure the 

effectiveness of agency training provided on FAIMIS reporting 

functions, features, and capabilities.

5. Provide training to agency staff on FAIMIS reporting functions, 

features, and capabilities.

6. Develop recordkeeping procedures to track delegations.

7. Develop recordkeeping procedures to track training 

documentation for allowance financial managers and funds 

certifying officials.

8. Incorporate clarified guidance on position delegations for 

allowance holders in MD 4.2, which is currently under revision.
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V. AGENCY COMMENTS

OIG met with NRC management officials and staff at an April 4, 2013, exit 

conference, at which time the agency provided informal comments to the 

draft report. The informal comments were incorporated into the draft report 

as appropriate. NRC management and staff reviewed the revised draft 

report and agreed with the findings and recommendations. The agency 

opted not to provide formal comments for inclusion in this final report.
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APPENDIX A

OBJECTIVES, SCOPE, AND METHODOLOGY

OBJECTIVES

The audit objectives were to determine whether (1) NRC maintains proper 

financial control over appropriated and apportioned funds to ensure 

compliance with applicable Federal laws, policies, and regulations and 

(2) opportunities exist to improve the budget execution process.

SCOPE

This audit focused on reviewing management and financial controls over 

the agency’s budget execution process for FY 2011. We conducted this 

performance audit at NRC headquarters in Rockville, Maryland, from 

January 2012 through October 2012. Internal controls related to the audit 

objectives were reviewed and analyzed. Throughout the audit, auditors 

were aware of the possibility or existence of fraud, waste, or misuse in the 

program. 

METHODOLOGY

To accomplish the audit objectives, OIG reviewed relevant laws, 

regulations, and guidance, including the Antideficiency Act of 1982; the 

Chief Financial Officers Act of 1990; Office of Management and Budget 

Circulars A-11, Preparation, Submission, and Execution of the Budget, and

A-127, Financial Management Systems; and GAO’s Standards for Internal 

Control in the Federal Government. OIG also reviewed agency guidance 

and documents, including MD 4.2, Administrative Control of Funds;

monthly Budget Execution Reports; office internal budget procedures; and 

multiple reports generated from FAIMIS. Additionally, OIG reviewed 

reports related to the agency’s Transforming Assets into Business 

Solutions Task Force.
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OIG interviewed NRC staff at headquarters and the regions to obtain 

insights on the agency’s budget execution process. Furthermore, OIG 

interviewed budget staff from several Federal agencies to discuss their 

budget execution practices. 

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 Eric Rivera, Team Leader; Kathleen Stetson, 

Team Leader; Mary Meier, Audit Manager; and Michael Steinberg, Senior 

Auditor.
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APPENDIX B

FY 2011 Program Budget Lead Office Responsibilities

(Program Budget Formulation)

BUDGET FORMULATION

MAJOR 

PROGRAM BUSINESS LINE RESPONSIBLE LEAD OFFICE

Nuclear Reactor 

Safety

New Reactors Office of New Reactors

Operating Reactors Office of Nuclear Reactor Regulation

Nuclear Materials 

and Waste Safety

New Fuel Facilities Office of Nuclear Material Safety and 

Safeguards

Operating Fuel Facilities Office of Nuclear Material Safety and 

Safeguards 

Spent Fuel Storage and 

Transportation

Office of Nuclear Material Safety and 

Safeguards 

High Level Waste Office of Nuclear Material Safety and 

Safeguards 

Nuclear Materials Users

Office of Federal and State Materials 

and Environmental Management

Programs

Decommissioning and Low Level 

Waste

Office of Federal and State Materials 

and Environmental Management

Programs

Corporate Support

Agency-wide Infrastructure Product Lines

Human Resources Management; 

Training and Development 

Outreach

Office of the Chief Human Capital 

Officer 

Administrative Services Office of Administration

Rent and Facilities Management Office of Administration

Information Management Office of Information Services

Information Technology Office of Information Services

Disaster Recovery Office of Information Services

Financial Management Office of the Chief Financial Officer

Performance Management Office of the Chief Financial Officer

Policy Support Office of the Chief Financial Officer

Source: OIG analysis of OCFO data in FY 2011 Budget Execution Guide
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APPENDIX C

FY 2011 Budget Execution Structure

BUDGET EXECUTION

Allowance Holder Office

Administration Administration

Central/OCFO

Office of the Advisory Committee on Reactor Safeguards

Atomic Safety and Licensing Board Panel

Computer Security Office

Office of International Programs

Office of Congressional Affairs

Office of Commission Appellate Adjudication

Office of the Chief Financial Officer

The Commission

Office of Enforcement

Office of the Executive Director for Operations

Office of the General Counsel

Office of Investigations

Office of Public Affairs

Office of Small Business and Civil Rights

Office of the Secretary

Office of Federal and State 

Materials and Environmental 

Management Programs

Office of Federal and State Materials and

Environmental Management Programs

Office of the Chief Human 

Capital Officer Office of the Chief Human Capital Officer

Office of Nuclear Material Safety 

and Safeguards Office of Nuclear Material Safety and Safeguards

Office of New Reactors Office of New Reactors

Office of Nuclear Reactor 

Regulation Office of Nuclear Reactor Regulation

Office of Nuclear Security and 

Incident Response Office of Nuclear Security and Incident Response

Office of the Inspector General Office of the Inspector General

Office of Information Services Office of Information Services

Office of Nuclear Regulatory 

Research Office of Nuclear Regulatory Research

Region I Region I

Region II Region II

Region III Region III

Region IV Region IV

Salaries and Benefits/OCFO All Offices

 Source: OIG analysis of OCFO data