UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON, D.C. 20555-0001

OFFICE OF THE

INSPECTOR GENERAL

October 2, 2013

MEMORANDUM TO: Chairman Macfarlane

FROM: Hubert T. Bell /RA/

Inspector General 

SUBJECT: INSPECTOR GENERAL’S ASSESSMENT OF THE MOST 

SERIOUS MANAGEMENT AND PERFORMANCE 

CHALLENGES FACING NRC (OIG-14-A-01)

In accordance with the Reports Consolidation Act of 2000, I have updated what I 

consider to be the most serious management and performance challenges facing the 

U.S. Nuclear Regulatory Commission (NRC). This report conveys the updated 

challenge list and provides a description of each challenge area and an assessment of 

agency actions to address these areas.

BACKGROUND AND OBJECTIVES

On January 24, 2000, Congress enacted the Reports Consolidation Act of 2000, 

requiring Federal agencies to provide financial and performance management 

information in a more meaningful and useful format for Congress, the President, and the 

public. The act requires the Inspector General (IG) of each Federal agency to annually 

summarize what he or she considers to be the most serious management and 

performance challenges facing the agency and to assess the agency’s progress in 

addressing those challenges.

To accomplish this assessment, I considered the overall work of the Office of the 

Inspector General (OIG), the OIG staff’s general knowledge of agency operations, and 

other relevant information to develop and update the list of management and 

performance challenges and assess the agency’s progress in addressing these 

challenges. In addition, my staff sought input from NRC’s Chairman, Commissioners,
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

and management to obtain their views on what challenges the agency is facing and 

what efforts the agency has taken or are underway to address previously identified 

management and performance challenges. 

RESULTS

The NRC’s mission is to license and regulate the Nation’s civilian use of byproduct, 

source, and special nuclear materials to ensure adequate protection of public health 

and safety, promote the common defense and security, and protect the environment. 

Like other Federal agencies, NRC faces management and performance challenges in 

carrying out its mission.

Congress left the determination and threshold of what constitutes a most serious 

management and performance challenge to the discretion of the IGs. I have defined 

serious management and performance challenges as mission critical areas or programs 

that have the potential for a perennial weakness or vulnerability that, without substantial 

management attention, would seriously impact agency operations or strategic goals.

Based on this definition, I have identified the following as the most serious management and 

performance challenges facing NRC as of October 1, 2013: 

Most Serious Management and Performance Challenges Facing NRC as of

October 1, 2013* (as identified by Inspector General)

Challenge 1 Management of regulatory processes to meet a changing environment 

in the oversight of nuclear materials.

Challenge 2 Management of NRC security programs.

Challenge 3 Management of regulatory processes to meet a changing environment 

in the oversight of nuclear facilities.

Challenge 4 Management of regulatory processes associated with high-level 

radioactive waste.

Challenge 5 Management of information technology.

Challenge 6 Administration of all aspects of financial management and procurement.

Challenge 7 Management of human capital.

*The most serious management and performance challenges are not ranked in any 

order of importance.
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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Challenge 1. Management of regulatory processes to meet a changing 

environment in the oversight of nuclear materials

Overview

NRC is responsible for maintaining an established regulatory framework for the safe 

and secure use of nuclear materials; medical, industrial, and academic applications; and 

uranium recovery activities. NRC is authorized to grant licenses for the possession and 

use of radioactive materials and establish regulations to govern the possession and use 

of those materials. Agency regulations require that certain material licensees have 

extensive material control and accounting programs as a condition of their licenses. 

Other license applicants (including those requesting authorization to possess small 

quantities of special nuclear materials1

) must develop and implement plans that 

demonstrate a commitment to accurately control and account for radioactive materials. 

Upon a State’s request, NRC may enter into an agreement to relinquish its authority to 

the State to regulate certain radioactive materials (including low-level waste) and limited 

quantities of special nuclear material. The State must demonstrate that its regulatory 

program is adequate to protect public health and safety and compatible with NRC’s 

program. The States that enter into an agreement assuming this regulatory authority 

from NRC are called Agreement States. Currently, there are 37 Agreement States.

Issues

• Ensure appropriate oversight of radioactive material. This includes the accurate 

tracking and control of byproduct material, especially those materials with the 

greatest potential to impact public health and safety.

• Ensure that radioactive material is adequately protected to prevent its use for 

malicious purposes. 

• Ensure reliable accounting of special nuclear materials in the NRC and 

Department of Energy jointly managed Nuclear Materials Management and 

Safeguards System.

 1 Special nuclear material, as defined by Title 1 (Section 11. Definitions) of the Atomic Energy Act of 

1954, is plutonium, uranium-233, or uranium enriched in the isotopes uranium-233 or uranium-235.
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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• Ensure the appropriate oversight of uranium recovery facilities. The Department 

of Energy is responsible for cleanup and remediation of these sites under an 

NRC general license.

• Ensure that Agreement State programs are adequate to protect public health and 

safety and the environment, and are compatible with NRC’s program. 

• Ensure the management and safe storage and disposal of low-level radioactive 

waste produced as a result of NRC-licensed activities.

• Improve implementation of the National Environmental Policy Act (NEPA).

Assessment

During FY 2012, OIG audited NRC’s oversight of industrial radiography and found areas 

where NRC could improve. In FY 2013, NRC continued work on addressing OIG’s 

recommendations to improve its oversight of radiography. The agency is revising its 

inspection guidance pertaining to radiography—although the revision has been delayed 

several times.

During FY 2012, OIG conducted two audits concerning general licenses.

• In the first audit, OIG identified that general licensed devices (GLD) could 

contain dangerous radioactive sources even though persons with no radiation 

training or experience were allowed to operate the devices. In response to the 

OIG audit, during FY 2013, agency staff contacted NRC’s general licensees that 

possessed devices with dangerous radioactive sources and encouraged those 

licensees to transfer their devices to specific licenses. 

• In the second audit, OIG found that many general licensees are unaware of 

NRC’s regulatory requirements. The Atomic Energy Act, through the Code of 

Federal Regulations, establishes regulatory requirements for general licensed 

devices. However, NRC relies on manufacturers to make general licensees 

aware of these requirements, thereby delegating some of its responsibilities. In 

response to the OIG audit, during FY 2013, NRC staff committed to develop a 

procedure to provide each new NRC general licensee with information that will 

clearly describe all applicable regulatory requirements. 
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Since FY 2003, OIG has been tracking NRC’s progress regarding the reliable 

accounting of special nuclear materials. While the agency continues to make progress, 

it still needs to complete rulemaking on Part 74, Material Control and Accounting of 

Special Nuclear Material. The final rule and associated guidance are scheduled to be 

completed by November 12, 2013, and March 12, 2014, respectively.

During FY 2012, OIG audited NRC’s oversight of uranium recovery facilities and found 

opportunities for improvement. In response to the OIG audit, during FY 2013, NRC staff 

completed actions to ensure compliance with memorandums of understanding it had 

with the Environmental Protection Agency and developed guidance for inspecting 

uranium recovery sites transferred to the Department of Energy for long-term 

surveillance. 

Low-level radioactive waste is a byproduct of the country’s use and production of certain 

radioactive material. NRC and the Agreement States regulate low-level waste disposal 

through a combination of regulatory requirements, licensing, and safety oversight. 

Currently, there are three low-level waste disposal sites that are regulated by 

Agreement States. However, these low-level waste disposal sites accept waste only 

from certain States or accept only limited types of low-level wastes. Low-level 

radioactive waste that cannot be disposed of at a commercially operated facility is 

stored “onsite” where it was produced. Onsite storage increases the risk of accident 

and subjects workers to an increased likelihood of an unplanned exposure. NRC 

regulates approximately 1,600 materials licensees whose State compact does not have 

a low-level radioactive waste disposal facility or is not affiliated in a compact.

Challenge 2. Management of NRC security programs

Overview

NRC must remain vigilant with regard to the security of its infrastructure and that of 

nuclear facilities and nuclear materials. NRC must continue to use robust, proactive 

measures to protect its infrastructure – the buildings, personnel, and information – from 

both internal and external threats. Moreover, as the nature of the threat continues to 

evolve, NRC faces challenges with protecting nuclear facilities and materials, the 

sharing of sensitive information, as well as emergency preparedness and incident 

response. 
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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Issues

• Ensure that NRC maintains strong internal physical and information security 

programs to protect NRC assets (e.g., NRC headquarters and regional facilities, 

safeguards and classified information, and information systems).

• Ensure that NRC strengthens the cyber security inspection program to protect 

licensee-owned assets from compromise consistent with 10 CFR Part 73 

requirements. 

• Ensure effective nuclear power plant emergency preparedness oversight.

• Ensure that NRC maintains a strong physical security program to protect 

licensee-owned assets from attack.

• Ensure implementation of the November 21, 2012, Presidential Memorandum, 

“National Insider Threat Policy and Minimum Standards for Executive Branch 

Insider Threat Programs.” Currently, the staff is working toward several options 

for presentation to the Commission that consist of the following: (1) NRC staff 

informing the Commission of the framework of the NRC’s insider threat program 

as required by Executive Order 13587, “Structural Reforms to Improve the 

Security of Classified Networks and the Responsible Sharing and Safeguarding 

of Classified Information”; (2) a policy paper/basic implementation plan that will 

be a vote paper for Commission consideration, which will include policy 

questions including the allocation of resources and implications for bargaining 

unit employees; and (3) once the National Industrial Security Program Operating 

Manual is finalized, another paper to consider whether and to what degree 

licensees will be covered by the insider threat program.

• Ensure that NRC continually enhances its capabilities to deter and defeat 

external threats to its cyber infrastructure to thwart individuals and groups that 

deploy malicious malware and offensive cyber capabilities for the purpose of 

accessing NRC’s domain for malevolent purposes. Additionally, spear phishing 

attacks have increased at NRC and present an infrastructure information 

assurance challenge for the agency.
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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Assessment

During FY 2013, OIG evaluated NRC’s compliance with the Federal Information 

Systems Management Act of 2002 (FISMA).

2

 NRC has continued to make 

improvements to its information technology security program and progress in 

implementing the recommendations from previous FISMA evaluations. Most notable is 

that the agency has continued to maintain authorizations to operate on its agency and 

contractor systems.3 

During FY 2013, OIG was mandated to audit NRC’s classified information security 

program’s policies and procedures. OIG found a limited number of marking errors but 

no evidence of systemic misclassification. Yet, this audit did identify several areas 

where compliance with Federal Government standards could be improved. For 

example, OIG found that some NRC document classifiers had not received required 

training; trained classifiers are not issued documentation that training was received; 

required classification self-assessments would be enhanced by representative 

sampling; and NRC’s policy guidance on classification is outdated. NRC is taking action 

on the recommendations to strengthen the classified information security program. 

Additionally, OIG audited NRC’s process for ensuring that NRC employees are

complying with personnel reporting responsibilities for continued NRC access 

authorization eligibility. During this audit, OIG found that NRC had implemented a new 

system to track personnel security background investigations. This new system should 

lead to efficiencies in the work. Nevertheless, OIG found that employees are not 

complying with personnel reporting responsibilities for continued NRC access 

authorization eligibility. OIG found that NRC employees rarely self-report the 

occurrence of certain events or conduct that may bring into question their reliability and 

trustworthiness even though such reporting is a requirement for continued NRC access 

authorization. OIG made recommendations to strengthen the compliance process. 

NRC was in agreement with the recommendations and is taking corrective actions.

 2 FISMA is a United States Federal law enacted in 2002. The act requires each Federal agency to 

develop, document, and implement an agencywide program to provide information security for the 

information and information systems that support the operations and assets of the agency.

3 An authorization to operate is a formal designation that authorizes operation of a business product and 

explicitly accepts the risk to agency operations. 
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Challenge 3. Management of regulatory processes to meet a changing 

environment in the oversight of nuclear facilities

Overview

NRC faces the challenge of maintaining its core regulatory programs while adapting to 

changes in its regulatory environment. NRC must address a highly variable interest in 

licensing and constructing new nuclear power plants to meet the Nation’s increasing

demands for energy production. As of May 2013, NRC had received 18 Combined 

License applications, 10 of which NRC was actively reviewing. Moreover, the agency is 

reviewing two standard design certifications and, for advanced reactors, expects to 

receive three design certification applications and one construction permit application 

through 2015. 

While responding to the emerging demands associated with licensing and regulating 

new reactors, NRC must maintain focus and effectively carry out its current regulatory 

responsibilities, such as inspections of the current fleet of operating nuclear reactors 

and fuel cycle facilities. NRC intends to increase its safety focus on licensing and 

oversight activities through risk-informed and performance-based regulation. 

Issues

New Facilities

• Implement the new Construction Inspection Program.

 Risk-inform Construction Inspection Program activities to ensure the safe 

operation of newly constructed nuclear facilities.

 Ensure that the NRC staff has the necessary knowledge and skill to 

successfully implement the program.

• As the search for new energy sources continues, NRC must ensure that the 

process for reviewing applications for new nuclear facilities focuses on safety and 

effectiveness. 
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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• As the sources of manufactured reactor components become more globalized, 

NRC must ensure that its regulations and oversight activities appropriately 

address the challenges associated with licensees procuring components from 

suppliers located outside the United States.

Existing Fleet

• Ensure that NRC maintains the ability to effectively review licensee applications 

for license renewals and power uprates submitted by industry in response to the 

Nation’s increasing demands for energy production.

• Ensure the most important operational issues remain the agency’s top priority,

and consistently apply responsive regulatory and review changes across the 

existing fleet of reactors.

• Establish and maintain effective, stable, and predictable regulatory programs or 

policies for all program areas.

Cross-Cutting Issues

• Systematically identify and develop — and consistently implement — internal 

controls to ensure effectiveness and efficiency of agency operations and 

resources. 

• Identify and improve weak, informal, or unstructured processes to facilitate 

effective, efficient, and consistent staff activities.

• Improve the clarity, consistency, and comprehensiveness of guidance for NRC 

staff, such as the Inspection Manual and inter/intra-office guidance.

Assessment

OIG conducted audit followup activities in a number of significant issue areas, including 

oversight of licensees’ vendors and reporting of nuclear power plant component defects, 

enforcement mechanisms, and new construction inspection. OIG auditors concurred 

with agency actions to close out recommendations in previously audited areas, 

including agency efforts to: 

• Develop and implement a quality assurance process that ensures the accuracy 

and completion of enforcement data.
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• Develop a vendor inspection program planning document that clearly articulates 

the program purpose and establishes metrics to evaluate program performance.

• Update inspection procedures to ensure NRC inspectors are evaluating licensee 

component defect reporting issues on a continual basis. 

However, significant audit recommendations remain open regarding the clarity of 

licensee component defect reporting regulations and guidance, assessing NRC staff 

needs for new construction-related training, and developing a framework to manage the 

impact of change on key new reactor oversight programs.

Challenge 4. Management of regulatory processes associated with high-level

radioactive waste

Overview

NRC regulates high-level radioactive waste generated from commercial nuclear power 

reactors. High-level radioactive waste is either spent (used) reactor fuel when it is 

accepted for disposal or waste materials remaining after spent fuel is reprocessed. 

Because of its highly radioactive fission products, high-level radioactive waste must be 

handled and stored with care. Since the only way radioactive waste finally becomes 

harmless is through decay, which for high-level waste can take hundreds of thousands 

of years, the waste must be stored and finally disposed of in a way that provides 

adequate protection of the public.

The United States has entered a period where the national policy for storing, 

reprocessing, and disposal of spent nuclear fuel is being reexamined. With the 

prospect of spent nuclear fuel being stored at reactor sites for the foreseeable future 

due to the uncertainty surrounding a permanent repository for high-level radioactive 

waste, along with recent judicial action, NRC is being called upon to reevaluate its 

management approaches to the issues associated with long-term high-level radioactive 

waste storage. 

In 2010, NRC updated its Waste Confidence Decision—affirming that spent nuclear fuel 

could be safely stored onsite at nuclear power plants until a permanent waste repository 

is built. However, on June 8, 2012, the U.S. Court of Appeals for the District of 

Columbia Circuit ruled that NRC’s waste-confidence decision had not adequately 

addressed all environmental effects and thus violated the National Environmental Policy 

Act. 
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On August 13, 2013, the U.S. Court of Appeals for the District of Columbia Circuit

issued a decision. The court ordered NRC to “promptly continue with the legally 

mandated licensing process” for the Department of Energy’s application for 

authorization to construct a geologic repository for high-level nuclear waste at Yucca 

Mountain, Nevada, “unless and until Congress authoritatively says otherwise or there 

are no appropriated funds remaining.” 

An independent spent fuel storage installation (ISFSI) is an NRC-licensed facility 

designed and constructed for the interim storage of spent nuclear fuel and other 

radioactive materials associated with the spent fuel. An ISFSI typically consists of a 

concrete storage pad, storage containers (casks), and any support facilities. As of

March 2013, there were 69 licensed ISFSIs in the United States.

Issues

• Ensure safe and secure interim storage for increasing quantities of high-level 

radioactive waste for the foreseeable future until a permanent repository for 

high-level radioactive waste is operational.

• Address regulatory issues relative to a longer-than-anticipated time for interim 

storage of high-level waste.

• Maintain flexibility to address regulatory challenges related to the storage and 

transportation of spent nuclear fuel and high-level waste.

Assessment

Because the U.S. Court of Appeals for the District of Columbia Circuit found that NRC 

violated the National Environmental Policy Act in issuing its 2010 update to the Waste 

Confidence Decision and Temporary Storage Rule, the Commission suspended all 

licensing activities that rely on the Waste Confidence Decision and Rule. NRC created 

a Waste Confidence Directorate within the Office of Nuclear Materials Safety and 

Safeguards to oversee the drafting of a new Waste Confidence Environmental Impact 

Statement and Rule. The Commission has instructed the Directorate to issue the final 

environmental impact statement and rule by no later than September 2014.
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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In FY 2011, OIG audited the safety aspect of NRC’s oversight of ISFSIs and identified 

areas where the agency could improve. During FY 2013, NRC staff revised its 

inspection manual establishing a minimum frequency for conducting routine ISFSI 

safety inspections.

Challenge 5. Management of information technology

Overview

NRC needs to continue upgrading and modernizing its information technology (IT) 

capabilities to meet its IT/information management strategic goals. These goals include 

ensuring that NRC staff have quick and easy access to information, providing IT 

solutions that are easy to use and increase agency program performance, and 

delivering excellent service.

Issues

• Maintain and enhance information technology activities to strengthen the 

productivity, efficiency, and effectiveness of agency programs and operations.

• Expand mobile computing – “work from anywhere” – options such as remote 

access from NRC-issued laptops, non-NRC computers, and hand-held devices 

including a “bring your own devices” pilot program to allow for the distributed 

work locations of NRC staff.

• Improve information retrieval with better categorization and organization, 

enterprise content management, and improved search capabilities.

• Enhance “work with anyone” capabilities to include virtual meeting and 

collaboration tools with internal and external stakeholders including licensees 

and the public.

Assessment

In December 2010, the U.S. Chief Information Officer promulgated the 25-Point 

Implementation Plan to Reform Federal Information Technology Management. The plan 

tasked NRC and other agencies with undertaking specific management reforms and 

policy changes. During FY 2013, OIG audited NRC’s compliance and recommended

that NRC could improve IT management. As a result, the agency has agreed to 

institutionalize current training for its IT acquisition staff, create short-term and longterms plans for its data centers, and include all data centers in future consolidation 

efforts.
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Also during FY 2013, OIG evaluated NRC’s progress in implementing social media at 

NRC. The evaluation found that NRC has made significant progress and is compliant 

with Federal social media policies and regulations. However, consistent with the fact 

that NRC is still in its early stages with its social media program, there remain areas 

where the agency can enhance its efficiency and effectiveness. These areas include 

integrating social media into existing policies, training, and practices; implementing 

more social media specific security, training, and awareness safeguards; establishing a 

more prominent voice in the digital realm, and maximizing the potential of social media 

to enhance interaction with agency stakeholders and engage them in a dialogue on 

nuclear issues. The agency has implemented a number of recommendations such as 

soliciting input on a regular basis, making the authors more prominent in articles, and 

ensuring that information on how social media can be accessed by users is clearly 

defined and visible.

Challenge 6. Administration of all aspects of financial management and 

procurement

Overview

NRC faces significant challenges to efficiently, effectively, and economically manage its 

corporate resources within the parameters of its budget. In response to a challenging 

budget environment, NRC is pursuing strategies to target areas of inefficiency. 

NRC must meet the requirements of several financial management statutes, including 

the Federal Managers’ Financial Integrity Act and the Chief Financial Officers Act. 

These acts mandate NRC to establish controls that reasonably ensure that 

(1) obligations and costs comply with applicable law; (2) assets are safeguarded against 

waste, loss, unauthorized use, or misappropriation; and (3) revenues and expenditures 

are properly recorded and accounted for. These acts also encompass programmatic 

and administrative areas, as well as accounting and financial management.

NRC’s procurement of goods and services is made with an aim to achieve the best 

value for the agency’s dollars in a timely manner. Agency policy provides that these 

activities support the agency’s mission; be planned, awarded, and administered 

efficiently and effectively; and be consistent with sound business practices and 

contracting principles. Agency efforts are currently focused on the goals of achieving 

(1) a 21st century acquisition program that uses state-of-the-art acquisition 

methodologies for acquisition planning, execution, management, and closeout, and 

(2) an acquisition program that fully integrates with the agencywide program and 

financial planning and budget execution. 
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Issues

Financial Management

• Respond to the current challenging budget environment. 

• Improve the performance and functionality of the agency’s core financial system. 

• Improve the integration and functionality of all financially-related systems.

Procurement 

• Implement a 21st century acquisition program that will interface with the agency’s 

core financial management system.

Assessment

Financial Management

During FY 2013, NRC continued to demonstrate sound financial management practices. 

The Audit of the NRC’s Financial Statements for Fiscal Year 2012 resulted in an 

unqualified audit opinion. Moreover, other OIG audits demonstrated that NRC is in 

compliance with Federal laws and standards related to financial management.

The agency also continues its efforts to enhance controls over financial management 

and to reduce agency overhead costs. For example, NRC established a Transforming 

Assets into Business Solutions Task Force to analyze and assess NRC‘s business 

practices and develop a plan to reduce the duplication of efforts in corporate and office 

support areas. However, OIG audits identified additional opportunities for improvement 

in financial operations.

An FY 2013 audit on NRC’s process for calculating license fees indicated that NRC has 

opportunities to improve management of fees. Specifically, the audit recommended that 

the agency develop an annual validation process to compare budget estimates to actual 

costs and make adjustments as needed to the fee calculation process.

During an FY 2013 audit of travel charge cards, OIG found that NRC has an opportunity 

to maximize NRC’s rebates by using recommended Federal strategies. The audit 

recommended that the agency implement a policy to pay centrally billed travel card 

accounts daily or weekly and explore the possibility of using another agency’s existing 

task order to obtain a higher rebate rate.
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During FY 2013, OIG Investigations continued to see examples where NRC employees 

misused their Government travel charge cards, for example, by charging items not 

associated with official travel. While NRC has made efforts to address this area, 

continued efforts are needed to reduce and eradicate misuse.

Procurement

NRC continues to upgrade its procurement system to streamline the agency’s 

contracting practices. During FY 2013, OIG monitored the agency’s procurement 

activities through meetings with the Division of Contracts, Office of Administration. 

During FY 2014, these meetings will focus on the agency’s Strategic Acquisition System 

scheduled to be implemented in the August – October 2013 time period.

During FY 2013, an OIG investigation concluded that a contractor improperly billed the 

agency and failed to provide adequate deliverables. A settlement was reached where 

the contractor agreed to pay damages plus investigative costs in the amount of 

$456,938. While NRC program office and contracting officials rejected deliverables and 

denied charges from the contractor, this OIG investigation highlights the need for 

continual vigilance in contract administration.

Challenge 7. Management of human capital

Overview

For several years, NRC experienced significant workforce growth resulting from 

increased interest in nuclear power. During FY 2013, NRC‘s workforce was 

approximately 4,000 staff positions. Going forward, NRC will need to support increasing 

mandates in a challenging budget environment. NRC must institutionalize an approach 

that focuses on its mission of protecting the public health and safety while remaining 

mindful of staff needs. To manage human capital effectively, while continuing to 

accomplish the agency’s mission, NRC must continue to implement initiatives in the 

following areas:

• Reduce inefficiencies and overhead by centralizing and streamlining processes 

while maintaining or improving the level of service to agency offices.

• Space planning.
Inspector General’s Assessment of the Most Serious Management and Performance Challenges Facing NRC

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Issues

• Respond to a challenging budget environment.

• Adapt training and development programs to the changing needs of agency staff.

• Facilitate continuation of space consolidation efforts.

• Address knowledge management in light of the high number of senior experts 

and managers who are or will be eligible to retire.

• Enhance the environment for raising concerns.

Assessment

NRC, like many other Federal agencies, is dealing with the need to become more 

efficient in performing its mission. In response, NRC has developed a comprehensive 

human capital management system that is consistent with the agency’s core values. 

The Office of the Chief Human Capital Officer (OCHCO) has implemented specific 

hiring controls in order to address the agency’s projected shortfall in salaries and 

benefits. Additionally, OCHCO developed long- and short-term staffing plans focusing 

on mission-related work. These plans are effective tools for offices over the next 

several years as they balance grade structure, manage positions and achieve salary 

and benefit targets. 

During audits and evaluations, OIG considers both budget information for NRC 

programs and training needs for staff and makes recommendations, as appropriate, for 

improvements in these areas. For example, in FY 2013, OIG conducted audits that

discussed improvements needed in the training offered by the agency concerning 

NRC‘s (1) budget execution process and (2) travel charge card program.

NRC and the General Services Administration continue to work together to obtain 

approval for a consolidated housing plan for NRC headquarters that meets current 

standards for space utilization. After approval by the Office of Management and 

Budget, the plan will be presented to Congress. The final decision will rest with the 

House Committee on Transportation and Infrastructure and the Senate Committee on 

Environment and Public Works.

NRC continues to make progress on reconsolidation of its staff from headquarters 

interim buildings to the White Flint Campus’ Two White Flint North and Three White Flint 

North buildings.
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During FY 2013, OIG also reported on the agencywide safety culture and climate on the 

basis of an employee survey taken in September 2012.4

 When compared to previous 

surveys, agency staff rated 8 of 19 categories less favorable than in 2009. Some of 

these areas include the staff’s comfort level in elevating concerns and raising differing 

opinions, staff development and management, agency image, and the impact of metrics 

on work quality. Regarding knowledge management, the survey identified that NRC 

has made improvements in this area but still has opportunities to improve. The survey 

also indicated that staff may be less comfortable raising concerns since the previous 

survey was conducted. NRC management has assembled a group consisting of 

agency staff from multiple offices to seek opportunities for improvement in these areas.

In FY 2013, OIG investigative activities highlighted various human capital issues. For 

example, OIG completed an investigation regarding concerns associated with NRC’s 

“open door” policy and Differing Professional Opinion (DPO) program. Several 

interviewees told OIG that because there is a perception by NRC staff that filing a DPO 

leads to retaliation, many staff are unwilling to use the program. Additionally, OIG 

investigations completed work and reported instances of misuse of the Transit Subsidy 

Benefits Program and undocumented Government overtime and time and attendance. 

CONCLUSION

The seven challenges contained in this report are distinct, yet are interdependent to 

accomplishing NRC’s mission. For example, the challenge of managing human capital 

affects all other management and performance challenges.

The agency’s continued progress in taking actions to address the challenges presented 

should facilitate achievement of the agency’s mission and goals.

SCOPE AND METHODOLOGY

This report presents the IG’s annual assessment of the most serious management and 

performance challenges facing the NRC. The challenges represent critical areas or 

difficult tasks that warrant high level management attention. To accomplish this work, 

the OIG focused on determining (1) current challenges, (2) the agency’s efforts to 

address the challenges during FY 2013, and (3) planned agency efforts to address the 

challenges. 

OIG reviewed and analyzed pertinent laws and authoritative guidance, agency 

documents, and OIG reports, and sought input from NRC officials concerning agency 

accomplishments relative to the challenge areas and suggestions they had for updating 

 4 2012 NRC Safety Culture and Climate Survey, OIG-13-A-15, March 29, 2013.
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the challenges. Specifically, because challenges affect mission critical areas or 

programs that have the potential to impact agency operations or strategic goals, NRC 

Commission members, offices that report to the Commission, the Executive Director for 

Operations, and the Chief Financial Officer were afforded the opportunity to share any 

information and insights on this subject. 

OIG staff conducted this assessment from May through August 2013 at NRC 

headquarters.