```
                                                                 
Managing for Results: Efforts to Strengthen the Link Between	 
Resources and Results at the Nuclear Regulatory Commission	 
(10-DEC-02, GAO-03-258).					 
                                                                 
Encouraging a clearer and closer link between budgeting and	 
planning is essential to improving federal management and	 
instilling a greater focus on results. Through work at various	 
levels within the organization, this report on the Nuclear	 
Regulatory Commission (NRC)--and its two companion studies on the
Administration for Children and Families (GAO-03-09) and the	 
Veterans Health Administration (GAO-03-10)--documents (1) what	 
managers considered successful efforts at creating linkages	 
between planning and performance information to influence	 
resource choices and (2) the challenges managers face in creating
these linkages. 						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-258 					        
    ACCNO:   A05703						        
  TITLE:     Managing for Results: Efforts to Strengthen the Link     
Between Resources and Results at the Nuclear Regulatory 	 
Commission							 
     DATE:   12/10/2002 
  SUBJECT:   Performance measures				 
	     Planning programming budgeting			 
	     General management reviews 			 
	     OMB Program Assessment and Rating Tool		 

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GAO-03-258

                                       A

Report to the Chairman, Subcommittee on Government Efficiency, Financial
Management and Intergovernmental Relations, Committee on Government
Reform, House of Representatives

December 2002 MANAGING FOR RESULTS Efforts to Strengthen the Link Between
Resources and Results at the Nuclear Regulatory Commission

GAO- 03- 258

Letter

December 10, 2002 The Honorable Stephen Horn Chairman Subcommittee on
Government Efficiency, Financial Management and Intergovernmental
Relations Committee on Government Reform House of Representatives Dear Mr.
Chairman: During the past decade, the Congress and the executive branch
have sought to improve federal management and instill a greater focus on
results. By enacting a number of major management reforms, the Congress
has created a statutory framework, with the Government Performance and
Results Act (GPRA) as its centerpiece. 1 One of GPRA*s major purposes is
to encourage a closer and clearer link between planning, performance* that
is, results, and the budget process. Each administration takes a slightly
different approach to implementing results management. Improving the
integration of budget and performance is a high priority initiative in the

President*s Management Agenda. 2 A central piece of that initiative is the
Office of Management and Budget*s (OMB) new diagnostic tool, the Program
Performance Assessment Rating Tool (PART). PART is designed to provide a
consistent approach to reviewing program design, planning, and goals
development as well as program management and results. OMB expects to use
PART assessments in considering department and agency budget submissions
for the fiscal year 2004 President*s Budget request to the Congress. 3 1
Other significant legislation includes the Chief Financial Officers Act of
1990 and related

legislation, which created a structure for more businesslike management
and reporting of the government*s finances, and the Clinger- Cohen Act of
1996 and the Paperwork Reduction Acts, which required agencies to take an
orderly, planned approach to their information technology needs. 2 The
President*s Management Agenda, by focusing on 14 targeted areas* 5

governmentwide goals and 9 program initiatives* seeks to improve the
management and performance of the federal government.

3 Office of Management and Budget, Program Performance Assessments for the
FY2004 Budget, M- 02- 10 (Washington, D. C.: July 16, 2002).

In a number of different reports to the Congress, we have examined
different aspects of the resources- to- results link. A series of three
reports described agencies* progress over a 4- year period in aligning
performance plans; budgets; and, in the most recent report, financial
statements. 4 We found that from fiscal years 1999 through 2002, agencies
made significant

progress in showing a direct link between expected performance and
requested program activity funding levels* either through structural
changes or crosswalks* as the first step in defining the performance
consequences of budgetary decisions. However, we concluded that additional
effort was needed to describe the relationship between performance
expectations, requested funding, consumed resources, and performance
results. Furthermore, we found that progress likely would be uneven and
the pace of development affected by mission complexity and

differences in operating environments across the government. Finally, we
observed that describing the planned and actual use of resources in terms
of measurable results was an essential long- term effort that would take
time and adaptation on the part of all agencies. We also studied ways to
guide agencies to better integrate performance information into the budget
process. 5 In this work, we developed a

framework of budget practices that we believe can contribute to an
agency*s capacity to manage for results. We view these practices as
desirable dimensions of budgeting that could be implemented in many
different ways to reflect the characteristics and circumstances of a
particular agency. Both our assessments of performance and budget account
alignments and the framework of budget practices have led to the next
phase of work and the subject of this report. This report* one of a group
of three* looks at the resources- to- results link from the perspective of
agency managers charged with making the link happen.

The objectives of this report on the Nuclear Regulatory Commission (NRC),
and its two companion studies on the Administration for Children and
Families within the Department of Health and Human Services and the 4 U.
S. General Accounting Office, Performance Budgeting: Initial Experiences
under the Results Act in Linking Plans With Budgets, GAO/ AIMD/ GGD- 99-
67 (Washington, D. C.: Apr. 12, 1999); Performance Budgeting: Fiscal Year
2000 Progress in Linking Plans with

Budgets, GAO/ AIMD- 99- 239R (Washington, D. C.: July 30, 1999); and
Managing for Results: Agency Progress in Linking Performance Plans With
Budgets and Financial Statements,

GAO- 02- 236 (Washington, D. C.: Jan. 4, 2002). 5 U. S. General Accounting
Office, Results- Oriented Budget Practices in Federal Agencies, GAO- 01-
1084SP (Washington, D. C.: August 2001).

Veterans Health Administration within the Department of Veterans Affairs,
are (1) to document what managers in these three agencies considered
successful efforts at creating links between planning and performance
information to influence resource choices and (2) the challenges they face
in doing so. For the purposes of this report, we take a broad view of
performance information* possible sources include GPRA and program
evaluations. We neither evaluated agency choices nor critiqued their
processes. Instead, we asked managers to describe when and how planning
and performance information was included in the budget cycle, to explain
what strategies were used and why, and to provide evidence that

there was a related programmatic effect. A secondary purpose was to show
that there are multiple ways to establish these links, and that there can
be successful applications even if progress in budget and performance
integration is uneven.

Budgeting is and will remain an exercise in political choice in which
performance can be one, but not necessarily the only, factor underlying
decisions. However, efforts to infuse performance information into
resource allocation decisions can more explicitly inform budget

discussions and focus them* both in the Congress and in agencies* on
expected results rather than on inputs. We believe that showcasing
agencies* successes with and challenges in integrating budgeting and
planning may prove useful to other agencies; congressional authorizing,
appropriations, and oversight committees; and OMB in the shared goal of
strengthening the link between program performance and resources. Results
in Brief NRC designed the Planning, Budgeting, and Performance Management

Process (PBPM) to better integrate its strategic planning, budgeting, and
performance management processes. Its implementation is a work in
progress. As designed, the process has four major components; the results
of each component influence the other components. The four component
processes are (1) setting the agency*s strategic direction, (2)
determining activities and performance targets of component offices and
necessary

resources to accomplish the work, (3) executing the budget and monitoring
performance targets and making adjustments, if needed, to achieve those
targets, and (4) assessing agency progress toward achieving its goals. NRC
officials describe PBPM as a framework through which planning and
performance information can influence decisions in budget formulation and
execution. NRC provides strategic direction to operating units prior to
budget formulation through its strategic and performance plans and other

policy decisions. For example, the strategy of risk- informed regulation
and NRC*s four performance goals guided offices involved in the
implementation of a revised nuclear power reactor oversight program. Two
PBPM techniques in particular provide a link between agency goals

and budget decisions for individual office work activities.  The first
technique is NRC*s use of effectiveness reviews, where individual offices
set priorities for work activities based on their

contribution to achieving NRC performance goals. The prioritization
process questions why NRC is doing the work and whether the results, that
is, outcomes, are worth the planned budgetary resources. Offices that had
conducted effectiveness reviews prior to September 11, 2001, used
information from those reviews to plan for work changes based upon new
security threats.  The second technique is NRC*s use of operational
planning reports. Once offices set work priorities, they monitor both work
activity

performance and budgets during program implementation. For example,
offices monitored license renewal activities throughout the fiscal year so
resources could be adjusted to achieve annual program performance targets.
In addition, PBPM also promotes agencywide coordination of budget

formulation and execution decisions by providing a common language and
common goals.

Integrating budget and planning processes and improving performance
management in NRC is an ongoing effort that requires NRC to address a
series of challenges that it had identified. The primary challenge facing

NRC is to further develop the concepts and techniques established within
the various components of PBPM and to refine agencywide implementation (e.
g., by standardizing the priority ranking system). Integral to this
challenge is keeping performance measures current to reflect new programs
and industry practices, balancing efforts to standardize agencylevel
processes against individual office flexibility to implement PBPM, and
improving performance assessment. As part of this challenge, NRC also
faces an issue common to other federal agencies linking outcomes and
resources* how to show progress in an annual budget process for activities
such as research that may take years to produce results. Both the nature
of these challenges and the additional work necessary to implement

PBPM present a continuing workload challenge to NRC. In addition, NRC

must also finish implementing a cost accounting system that correlates
cost and performance information. Background NRC is an independent federal
agency that (1) establishes standards and

regulations for commercial nuclear power plants and non- power research,
test, and training reactors; fuel cycle facilities; medical, academic, and
industrial uses of nuclear materials; and the transport, storage, and
disposal of nuclear materials and wastes, (2) issues licenses for nuclear
facilities and uses of nuclear materials, such as industrial applications,
nuclear medicine, academic activities, and research work, and (3) inspects
facilities and the uses of nuclear materials to ensure compliance with
regulatory requirements. While safety is a paramount goal, a reassessment
in 2001 added three

subordinate performance goals to NRC*s strategic plan: (1) to make NRC
activities and decisions more effective, efficient, and realistic, (2) to
reduce unnecessary regulatory burden on industry without affecting safety,
and (3) to increase public confidence in NRC actions.

Figure 1 shows NRC*s organization. NRC is governed by a five- member
commission with one member designated by the President to serve as
Chairman. The Chairman serves as the principal executive officer and
official spokesperson of the commission. Reporting to the Commission

Chairman is the Executive Director for Operations (EDO). The EDO is the
chief operational and administrative officer of NRC, and is generally
responsible for executing the program policies and decisions made by the
NRC. Also reporting to the Commission Chairman is the Chief Financial
Officer (CFO), who is responsible for the agency*s PBPM and all of NRC*s
financial management activities. NRC is organized into seven program
offices under the EDO. The Office of Nuclear Reactor Regulation (NRR), the
Office of Nuclear Material Safety and Safeguards (NMSS), the Office of
Nuclear Regulatory Research (RES), and the newly created Office of Nuclear
Security and Incident Response (NSIR) are NRC*s four largest offices. It
also has three smaller program offices, various other management and
mission support offices, and four regional offices.

Figure 1: NRC Organization Chart The Commission Commissioner Commissioner
Chairman Commissioner Commissioner

Advisory Committee Office of the

Office of Office of Public

Office of the General Atomic Safety and

on Nuclear Waste Inspector General

Congressional Affairs

Counsel Licensing Board

Affairs Panel

Advisory Office of

Office of Office of the

Committee on Chief Financial

Commission Secretary of the

Reactor Safeguards Officer

Appellate Adjudication Commission

Executive Director for Office of

Operations International

Programs Deputy Executive Director

Deputy Executive Director Deputy Executive Director

Office of for Materials, Research,

for for

Chief Information and State Programs

Reactor Programs Management Services

Officer Office of Nuclear

Office of Nuclear Office of

Office of Office of

Office of Material Safety

Regulatory State and Tribal

Administration Human Resources Small Business

and Safeguards Research

Programs and Civil Rights

Offfice of Nuclear Office of

Office of Nuclear Office of Reactor

Enforcement Security and Incident

Investigations Regulation

Response Region I

Region II Region III

Region IV Philadelphia, PA Atlanta, GA Chicago, IL Arlington, TX

Direct reporting relationship General supervision Advisory body Areas of
GAO study NRC*s seven program offices Source: NRC.

While strategic planning, budgeting, and program implementation involve
headquarters offices and regional operations, we focused our work on those
offices that NRC officials said had more experience in PBPM
implementation. The Office of the CFO which includes the Division of
Planning, Budget, and Analysis, is responsible for NRC*s financial

management and reporting under GPRA. NRR licenses and inspects nuclear
power reactors and non- power reactors. NMSS directs and oversees
licensing, inspection, and environmental activities for nuclear fuel cycle
facilities and safeguards nuclear materials, including the management and
disposal of high- and low- level radioactive wastes. RES provides
technical support to the frontline regulatory activities involving
licensing and inspection, oversight and development of regulatory
products. NSIR combines NMSS responsibilities for protection of fuel cycle
facilities and materials with NRR responsibilities for physical security
at nuclear power plants and other facilities. 6 The four regions execute
NRC policies and various programs relating to inspection, licensing,
enforcement, investigation, governmental liaison, as well as emergency
response within their regional boundaries. NRC employed approximately
2,900 people and had a total budget of

approximately $559 million in fiscal year 2002. Of that amount, the
Congress transferred about $23.7 million from the Nuclear Waste Fund. 7
The remainder was to be financed by a mix of revenues from licensing,

inspection services, and other services and collections, and amounts from
the general fund of the Treasury. These amounts were made available in
NRC*s annual appropriations and in an emergency supplemental appropriation
to support homeland- security- related activities. Over half of NRC*s
annual budget is used to pay staff salaries and benefits. The remaining
funds are used to support other operating expenses, purchase technical
assistance for regulatory programs, and conduct safety research. 6 NSIR
was created after we conducted our fieldwork for this study.

7 The Nuclear Waste Fund supports NRC*s High Level Waste Program, which
currently consists of the Yucca Mountain project. The High Level Waste
Program was authorized under the Nuclear Waste Policy Act, as amended, and
the Energy Policy Act of 1992. This legislation states requirements for
storage, transportation, and disposal of high- level nuclear waste, and
prescribes the respective roles of NRC, the Department of Energy, and the
Environmental Protection Agency in the High Level Waste Program.

During the 1990s, various concerns were raised about NRC*s performance,
particularly the way NRC conducted inspections and promulgated
regulations. Agency officials told us that NRC*s former Commission
Chairman, Shirley Jackson, was concerned that NRC*s practices were
narrowly focused on ensuring that its activities and processes were
consistent with regulatory law without adequate attention to the results
of its activities. Both the nuclear industry and public interest groups

criticized NRC*s plant assessment and enforcement processes as lacking
objectivity, consistency, and predictability. 8 An NRC report also
described its former regulatory approach as punitive and reactive.
According to a senior agency official, the agency was concerned that the
Congress would cut about one- third of the agency*s staff from the NRC
budget for fiscal year

1999 unless the agency changed the way it conducted business. NRC took
various steps to improve regulatory oversight and agency management. These
changes included a comprehensive strategic planning effort from 1995 to
1997 to reassess and establish new baselines for its programs, led by
then- Chairman Jackson. NRC also charged the OCFO and the former Executive
Council 9 with developing a new planning, budgeting, and performance
management process. NRC staff said that PBPM changes also supported the
agency*s efforts to implement GPRA. NRC established PBPM in the fall of
1997 and implemented a pilot project in NRR. In 1999, NRC extended PBPM to
NMSS and RES for the fiscal year 2000 budget. NRC plans to further develop
PBPM to include more detailed procedures,

the products involved, and the roles of various management levels. Scope
and

To achieve our objectives, we interviewed selected NRC staff members
Methodology

from the offices of the EDO, the CFO, and the Chief Information Officer;
from three headquarters offices in Rockville, Maryland (NRR, NMSS, and
RES); and from the Region II (Atlanta) office for their perspectives on
PBPM and how it supports resource decisions. The Region II office was
selected because, according to NRC officials, this region had been
instrumental in developing a cohesive operating plan* one of the PBPM
techniques used by NRC to enhance coordination among program offices

8 U. S. General Accounting Office, Nuclear Regulation: Strategy Needed to
Regulate Safety Using Information on Risk, GAO/ RCED- 99- 95 (Washington,
D. C.: Mar. 19, 1999). 9 The Executive Council consisted of the EDO, the
Chief Information Officer, and the CFO. The Executive Council was
abolished without replacement in 2000.

and regions. Within these organizations, we interviewed officials at
various levels of management involved in the budget decision- making
process, including office directors, division directors, and unit
managers. In total, we interviewed more than 30 NRC officials on the
various aspects of

planning and budgeting practices. We reviewed NRC*s planning, budget, and
program documents, including strategic plans, annual performance plans,
budget requests, operating plans, and performance reports, that

support PBPM. This report presents NRC*s budget and planning practices as
described by the NRC officials we interviewed and described in the NRC
documents we reviewed. The views of those individuals and the information
in these documents, which we have summarized for reporting purposes, may
not necessarily be generalized across NRC. We also did not observe or
evaluate the processes in operation, nor did we assess the program or

financial information contained in documents provided by NRC. We also did
not evaluate the completeness or accuracy of NRC performance goals and
measures or the effectiveness of NRC rule making, licensing, inspection,
and oversight programs. 10 Our work was conducted from February through
May of 2002 in accordance with generally accepted government auditing
standards. The Current Budget

Implementation of PBPM is a work in progress. PBPM was created by NRC and
Planning Process

to improve program and service performance by integrating NRC*s strategic
planning and budgeting processes. This section describes how components of
the process were designed to operate, while the next section (* Planning
and Performance Information Influences Resource Allocation Decisions in
Various Ways*) explains how performance information informs resource
decisions in those offices that have implemented PBPM and its techniques.
PBPM: A Work in Progress NRC has gradually introduced PBPM techniques
across the agency and has

allowed offices some flexibility during implementation of the process. NRC
began implementation in its larger program and mission support offices. As
NRC has gained experience, it is examining ways to extend the

10 For example, this study did not observe or evaluate recently reported
safety problems in the Davis- Besse power plant.

process to the smaller program and mission support offices and to more
fully standardize PBPM techniques across the agency. NRC designed PBPM as
an integrated process that functions most

effectively when information from one component is used to inform
decisions in other components. Figure 2 shows how the four components
interact over a budget cycle. For example, the strategic direction setting
in Component 1 relies in part on the assessment elements in Component 4.
The effectiveness review element in Component 2 relies on performance
goals developed during strategic direction setting. Finally, the
assessment

elements in Component 4 incorporate information gathered from Component 3,
performance monitoring, to identify topics for program evaluations and
self- assessments.

Figure 2: NRC*s Planning, Budgeting, and Performance Management Process
Fiscal Year 2001 Fiscal Year 2002 October

January April July

October January

April 2000 2001 2001

2001 2001

2002 2002 Triannual review Component 1 and update of Strategic Plan
Setting the strategic

involving NRC direction

senior management * Updates may occur from last

and Commission. year's triennual review beyond January. NRC receives
fiscal

year 2002 appropriation Individual offices formulate

and adjusts fiscal year NRC submits fiscal year 2003

Component 2 fiscal year 2003 budgets

2002 operating plans budget and annual performance

Determining planned based upon Commission

as necessary. Senior plan to OMB and the Congress.

accomplishments guidelines, effectiveness

management and and resources

reviews, budget assumptions, commission review and fiscal targets. fiscal
year 2003 budget proposed.

Component 3 NRC and component offices implement annual operating

plans and monitor Fiscal Year 2001 budgets. NRC and individual offices

Measuring and monitoring implement annual operating

performance (Offices prepare fiscal year 2002 operating plans.)

plans. Component 4

Ongoing performance reviews and assessments conducted for the four major
strategic arenas. Assessing performance

Source: GAO analysis.

Four Components of PBPM Component 1: Setting the

In Component 1, NRC establishes agencywide strategic direction by
Strategic Direction

formulating the strategic plan and by issuing Commission guidance
throughout the year. The plan includes NRC*s strategic and performance
goals and corresponding measures and identifies general strategies on how
best to achieve the agency*s mission. The plan is developed with
Commission and stakeholder involvement by a senior management group with a
broad perspective of the agency, and is approved by the Commission.
Although the plan covers 5 years and is reexamined every 3 years as
required by GPRA, if circumstances warrant, the plan can be changed more
often. 11 The plan also establishes a framework called

*strategic arenas,* each of which is composed of related programs with a
common purpose. 12 NRC*s strategic arenas correspond to program activities
in the President*s budget. In addition, the Commission provides direction
to its managers on programs and operations through various written
directives.

Component 2: Determining In Component 2, managers in offices using PBPM
employ a set of

Planned Accomplishments and interrelated tools to translate agency goals
and strategies into individual

Resources office work activities, 13 performance targets, and resource
needs. To determine how work activities contribute to achieving NRC*s four

performance goals, 14 individual offices conduct what are called
effectiveness reviews. These reviews are not comprehensive assessments of
programs but rather a structured way for managers to evaluate the
contribution of work activities to achieving performance goals prior to
budget formulation. For example, an office will examine each of its work
activities and ask how a given activity achieves each of the performance
goals. Effectiveness reviews also assist offices in identifying where
there

are gaps in activities or where new initiatives are needed. Agency
officials 11 For example, NRC reviewed its strategic plan after the
terrorist attacks of September 11 but determined that the plan did not
need to change at that time. 12 NRC*s strategic arenas are Nuclear Reactor
Safety, Nuclear Materials Safety, Nuclear Waste Safety, Management and
Support, International Nuclear Safety Support, and the Office of the
Inspector General.

13 NRC defines planned accomplishments as work activities that implement a
strategy in the strategic plan. A group of related work activities is a
program. 14 Performance goals contribute to achieving strategic goals and
outcomes.

said that offices that conduct these reviews have used various
methodologies to rank office activities relative to agency performance
goals.

According to agency officials, if an office determines through an
effectiveness review that activities are not critical to achieving NRC
performance goals, the office will likely propose reducing or eliminating
resources for the activity in the upcoming budget year. 15 Effectiveness
review discussions may begin prior to the start of the annual budget
process, concurrent with Component 1 activities establishing strategic
direction. These discussions enable senior management to provide guidance
on expectations for work priorities (targets). The budget assumptions
document is a tool used to plan work activities

based on workload and set performance targets. This document identifies
external and internal factors, such as anticipated number of license
reviews that will affect the agency*s workload over the next 2 fiscal
years. These assumptions are developed by the offices and approved by NRC

executive- level managers. These assumptions then become key inputs for
offices when formulating their resource needs for the upcoming budget
year. Each budget assumption is supported by a summary of the factors that
were evaluated to produce the assumption and to indicate the likelihood

that this assumption will materialize. For example, the fiscal year 2003-
2004 budget assumptions document estimates approximately 1,500 enforcement
actions for each year. This estimate is based on historical trends and
anticipated results from implementation of the revised reactor oversight
process. In addition, the budget assumptions document includes related
information that may affect the assumptions. In the above example, NRC is
attempting to integrate Alternative Dispute Resolution techniques 16 into
the enforcement program, a decision that may require additional

resources to implement. 15 According to an NRC official, NRC*s authorizing
statutes provide NRC with flexibility on which type of work activities it
can perform to accomplish its mission. This official stated that the
agency is required to license nuclear plants and ensure they are operated
safely, but that NRC is not specifically required to inspect these plants.

16 Alternative Dispute Resolution refers to a number of processes, such as
mediation and facilitated dialogues, used to assist parties in resolving
disputes and potential conflicts.

Finally, through its annual budget call NRC provides instructions to
individual offices for developing office budget priorities. Individual
offices submit budgets to the NRC executive level by program. These
submissions address resources needed by each office to accomplish NRC
strategic and performance goals. A group of senior managers then reviews
office budget submissions by strategic arena and submits the proposed
office budget to the CFO and EDO. The CFO and EDO then submit their
proposed budget to the Chairman for Commission approval. After Commission
approval, NRC submits a combined annual budget and performance plan to OMB
for inclusion in the President*s budget. The combined budget and
performance plan also serves as the agency*s budget justification to the
Congress. Figure 3 shows how NRC*s performance plan links program
activities and funding allocations by goal.

Figure 3: NRC Linked Program Activities and Funding Allocations by General
Goal (Fiscal Year 2002)

Agency Account Program activity (dollars

General Performance

in fiscal year 2002 in millions) goal goal

NRC Salaries 1. Nuclear reactor safety (259.2)

Nuclear

Maintain safety,

and program areas

reactor

protection of the

Expenses safety

environment, and Reactor licensing (56.0)

(259.2)

the common Reactor license (13.1)

defense and renewal

security. Reactor inspection and (70.4)

Increase public performance

confidence. assessment

Reactor incident (( 7.0) Make NRC

response activities and

Reactor safety research (57.3) decisions more

Reactor technical (9.8) effective, efficient,

training and realistic.

Reactor enforcement (1.8) actions

Reduce Reactor investigations (4.1)

unnecessary Reactor legal advice (2.5)

regulatory burden Reactor adjudication (1.2)

on stakeholders. New reactor licensing (10.0) Homeland Security (26.0)

2. Nuclear materials safety program area

3. Nuclear waste safety program program area

4. International nuclear safety support program area

5. Management and support program area

Source: GAO table NRC figures.

Component 3: Measuring and In Component 3, NRC executes the approved
budget through office

Monitoring Performance operating plans 17 based on appropriations,
congressional guidance, and

Commission priorities. Each office prepares operating plans to reflect the
allocation of staff years and funds available following appropriations
action and OMB apportionment. The operating plans, tailored by each office

17 The OCFO is responsible for monitoring overall budget execution. As
part of this responsibility, the OCFO prepares financial plans with each
office to monitor resource utilization. In addition, offices report staff
years and contract dollars used to the Office of Executive Director for
Operations as part of its operating plan.

implementing PBPM, tie allocated staff and other resources to each work
activity and to performance goals and define how success is measured for
each activity. As the budget is executed, operating plans also are used to
compare actual

office resources to budget estimates and actual performance to targeted
performance, and to identify necessary programmatic and fiscal actions.
Based on targets established in the operating plans, individual offices
develop quarterly reports on the status of resources and performance. Any
performance issues identified in the quarterly reports are discussed with
the deputy executive director responsible for that particular office.
Generally, when an office meets with its cognizant deputy executive
director, it has prepared a course of corrective action it intends to
take. However, if an issue is significant, senior staff members will meet
with their deputy when they become aware of the issue rather than wait for
the quarterly operating plan update. Follow- up actions are incorporated
into the next scheduled operating plan meeting as appropriate. The Office
of the EDO does not prepare quarterly reports summarizing its review of
office operating plans for the Commission. Instead, the Commission is

kept informed of operating plan issues throughout the year by various
means including Commission meetings, staff papers, the Budget Execution
Report, and individual briefings. Finally, performance results are
reported annually through a publicly available agency performance report.

Component 4: Assessing In Component 4, NRC assesses agency performance.
This component is

Performance designed to use information from and feed information to other

components. Although this component is the least developed of the four
components, products are intended to both inform future planning and
budget deliberations and further improve performance. (A later section of
this report, *Challenges to Improving the NRC Budget and Planning

Process,* more fully discusses challenges to improving the assessment
component). When fully operational, this component should help NRC to
determine whether a program should be continued, restructured, or
curtailed and, as designed, may influence planning and budget decisions in
Components 1 and 2. In July 2002, NRC proposed that this component include
performance reviews conducted for the four major strategic arenas as well
as selected management and support offices. However, no decision has been
made on who in NRC will conduct these reviews. In addition, individual
offices can identify issues during the performance monitoring component
that they may select for internal self- assessments during Component 4.

Planning and PBPM provides NRC with a framework through which it can use

Performance performance information to influence planning and resource
allocation decisions and is consistent in key respects with our framework
for budget

Information Influences practices. 18 NRC informs its resource allocation
decisions by providing

Resource Allocation strategic direction to operating units prior to budget
formulation and by

Decisions in Various monitoring actual performance against performance
targets during budget

execution. PBPM also promotes agencywide coordination of budget Ways
formulation and execution decisions by providing a common language and

common goals. Strategic Direction A key principle driving PBPM is that the
agency*s strategic direction Influences Resource

influences internal policy and resource decisions. NRC seeks to use PBPM
Allocation Decisions

to identify general strategies to achieve goals, identify programs to
implement these strategies, and determine resources to fund and staff
programs. NRC practices are similar to those proposed in our framework for
budget practices. Under the framework for budget practices, agency
management should provide context during budget formulation in the form

of general guidance to program managers on proposed agency goals, existing
performance issues, and resource constraints* consistent with Components 1
and 2 of PBPM. The following are examples of operation and program
decisions that link NRC*s strategic direction with corresponding resource
decisions made though PBPM. One of the strategies used to implement the
four performance goals in the

strategic plan is risk- informed regulation and oversight. This strategy
uses risk assessment findings, engineering analysis, and performance
history to focus attention on the most important safety- related
activities; establishes objective criteria to evaluate performance;
develops measures to assess

licensee performance; and uses performance results as the primary basis
for making regulatory decisions. 18 GAO- 01- 1084SP.

As part of its risk- informed regulation and oversight strategy, NRC
modified its reactor oversight program to help achieve its three
subordinate performance goals* developed through Component 1* while
maintaining its primary safety goal. 19 The Commission provided guidance
throughout the development and implementation of the revised reactor
oversight program. This guidance included requirements for staff reporting
to the Commission, approval of a pilot program, and instructions for
future program development. In one modification to the inspection process,
NRC stopped inspecting some elements affecting the plant operators* work
environments (e. g., how well lights in the plant illuminate the operating

panel). NRC determined that these factors did not critically contribute to
safety and created unnecessary regulatory burdens to industry. Regional
officials told us that NRC could now focus on the significant work
activities that maintain safety.

The reactor oversight program*s procedure for assessing nuclear plants was
also changed to increase public confidence in NRC operations by increasing
the predictability, consistency, objectivity, and transparency of

the oversight process. Each quarter, NRC posts the performance of each
nuclear plant on its Web site to provide more information to the public.
Regional officials told us that the overall level of resources required to
implement the revised reactor oversight program is similar to that of the
prior oversight program but that significant changes have occurred in how

they manage their inspection program. Specifically, the new inspection
procedure includes baseline inspections of all plants but focuses more of
the agency*s resources on plants that demonstrate performance problems.
Whether the revised reactor oversight program will reduce costs is
unknown, but regional officials said that potentially fewer resources may
be needed in the future using this approach. NRC established a focus

group to identify where or how possible resource savings could occur. As
part of its risk- informed regulation and oversight strategy, NRC
developed the Risk- Informed Regulation Implementation Plan (RIRIP), which
is updated periodically. The first RIRIP, issued in October 2000, examined
a range of staff activities including rule making to achieve NRC
performance goals. The Commission provided guidance throughout the
development and implementation of the new plan, including instructions

19 As mentioned previously, we did not evaluate the completeness or
accuracy of NRC performance goals and measures or the effectiveness of NRC
rule making, licensing, inspection, and oversight programs.

for future program development as NRC updates the plan. To facilitate its
use, the plan is organized around the strategic arenas. Organizing the
plan around arenas helps offices to establish priorities and identify
resources as part of PBPM. For example, the plan describes activities
designed to improve fire protection for nuclear power plants. In this
area, NRC plans to develop less prescriptive, more performance- based
risk- informed regulations to support its primary goal of safety. NRC is
working with industry to study alternatives to existing fire protection
standards and emergency postfire shutdown procedures.

A senior NRC official gave additional examples of changes NRC has made to
its regulations to reduce unnecessary regulatory burden on licensees
without compromising safety. He cited the decision to have NRC oversee,
but no longer perform, examinations to qualify power plant operators since
the industry conducts its own examinations. In addition, this official
said NRC eliminated its regulation requiring all nuclear power plants to
install state- of- the- art equipment, for example, they could continue to
use analog rather than digital equipment, focusing instead on whether use
of the current equipment adversely affected safety.

NRC also changed its licensing regulations to support its performance
goals of reducing unnecessary regulatory burden on licensees and becoming
more effective and efficient. One official said NRC changed its regulation
governing the length of a power plant license from 40 years to 60 years in
some circumstances. Before this change, NRC would only license

a power plant for 40 years. At the end of the 40- year license period, the
licensee would be required to shut down and decommission the plant. 20 The
change in regulation means that NRC will extend the term of a license

from 40 to 60 years if it determines through licensing review that
existing plant design will support a longer term. According to NRC
officials, these license extensions can eliminate extremely large costs to
licensees while reducing NRC costs because it is less costly to renew a
plant operating

license than to review a request for a license for a new power plant. The
Commission directed the reorganization of NRC*s three major NRC program
offices so that they could become more effective and efficient. For
example, in NRR the reorganization established reporting lines consistent
with major NRR program functions* inspection, performance

20 *Decommissioning* is the process of shutting down and dismantling a
nuclear power plant so the plant site can be safely reused for other
purposes.

assessment, license renewal, and licensing. An NRR official said the
previous organizational structure in NRC had contributed to inconsistent
processes for inspecting power plants and duplication of work.

To address the overall safety goal, NRC developed a program to measure
trends in industry nuclear power reactor performance. One part of the
safety goal is that there should be no statistically significant adverse
industry trends in safety performance. 21 Performance indicators are
included in the NRC performance plan and are reported to the Congress
through the NRC annual performance report. Resources for this new program
are determined through PBPM.

Work Performance NRC uses performance information to inform resource
allocation decisions

Influences Resource during budget execution by monitoring current year
work performance and

Allocation Decisions by adjusting resource allocations as necessary. This
practice is consistent

with our proposed framework for budget practices. As noted previously,
office operating plans track performance against established targets for
each planned work activity to call attention to significant performance
issues needing corrective action. For example, shortly after September 11,
2001, NRC conducted a comprehensive review of its security program. As

part of this review, NRC examined lists of prioritized work activities
prepared during the effectiveness review process in Component 2. These
lists helped NRC determine which activities to delete or modify as it
prepared to use existing resources to respond to security threats in the
post- September 11 environment. For example, NRC staffed around- theclock
emergency response centers for significantly longer than originally
anticipated.

21 The performance measure of no statistically significant adverse
industry trends in safety performance is one of several measures under
NRC*s performance goal of maintaining safety. Another measure, is having
no more than one event per year identified as a significant precursor of a
nuclear accident.

As part of this comprehensive review of its security program, NRC began
research on the structural integrity of power plants if they were attacked
by large aircraft. NRC also delayed routine inspections at non- power
reactors

for 3 months to help fund these new activities. 22 In addition, in April
2002, NRC established NSIR to streamline selected NRC security,
safeguards, and incident response responsibilities and related resources.
23

Operating plans are also used to monitor performance and make necessary
adjustments. For example, NRR discovered that the May 2000 operating plan
report showed plant license renewal applications and associated staff
years well below annual expected target levels that year. NRR was thus
able to shift resources to other priorities. An NRR official said this
example showed NRR the importance of monthly monitoring of the budget
assumptions prior to the beginning of the fiscal year. Furthermore, in
another example, NRR management officials also reviewed the fiscal year
2002 first quarter operating plan report and found that the workload
impact

from the September 11 attacks would prevent NRR from achieving annual
licensing action targets. These officials redirected additional staff
resources to complete these licensing actions. As a result, the third
quarter projection is that NRR will slightly exceed its annual target for
these actions.

Enhanced Cooperation and PBPM is designed to enhance cooperation and
coordination among offices.

Communication among This practice matches our proposed framework for
budget practices, Offices

which states that agency managers should share information on policy and
programs among offices during budget decision making.

Sharing information during budgeting is important because many offices
share responsibilities for achieving NRC goals. NRC office managers said
they coordinate their work with others to determine if necessary skills
are already available elsewhere in the agency. For example, one official
said he relies on another unit*s expertise in conducting environmental
studies. In

22 NRC eventually received $36 million in fiscal year 2002 emergency
supplemental funds for new security- related activities. 23 The new office
combines NMSS responsibilities for protection of fuel cycle facilities and

materials with NRR responsibilities for nuclear power plants and other
facilities. Resources for the consolidated functions, including about 90
staff members, were transferred from existing NRC offices.

another example, regional officials reported that they occasionally share
specialized staff with other regions to perform nonroutine inspections.

PBPM provides NRC with reference points such as common goals, performance
measures, and strategies that help offices communicate and reach agreement
on budget priorities. For example, NRR, which depends upon research
studies conducted by RES, meets regularly with that office to discuss
program and budget priorities for risk analysis, structural integrity, and
new reactor designs. 24 NRR also meets with other offices as it develops
its budget proposal to coordinate its resource requests for mutually
agreed- upon priorities. For instance, NRR shares information with NMSS to
ensure that crosscutting activities, such as rule making, have adequate
resources. In addition, the NRC crosswalk of all program activities into
strategic arenas allows NRC to clarify the relationship between budget
requests and agency goals. Our report on federal agency efforts in linking
performance plans with budgets found that NRC*s budget presentation linked
its program activities to performance goals, which showed funding needed
to achieve goals. 25 NRC uses the arena reporting structure to communicate
its budget needs to audiences outside the agency, including OMB and the
Congress. 26 Challenges to

When it introduced PBPM, NRC recognized that continued development of
Improving the NRC

the process would be necessary. After gaining experience for several
years, NRC is now in the process of addressing several challenges to PBPM
Budget and Planning

implementation. Agency officials noted challenges in (1) creating Process
performance measures that balance competing goals and keep performance
measures current, (2) associating resource requests with

outcomes, (3) standardizing PBPM practices and techniques but still
allowing individual offices to tailor the process to their needs, (4)
developing the assessment component, and (5) committing significant

effort to maintaining PBPM. In addition, NRC must continue developing a
cost accounting system to support PBPM. 24 RES funds approximately 190
separate activities, which serve the immediate needs of

other offices. It also funds long- term research. 25 GAO- 02- 236.

26 NRC*s budget guidance includes a detailed crosswalk of offices and
programs to specific planned activities.

NRC Efforts to Develop PBPM Issues in Creating Performance

As NRC officials create new performance measures or redesign existing
Measures That Balance Goals measures, they find it a challenge to refine
performance measures so that and Remain Current and Linked

they balance performance goals. While safety is a paramount goal, NRC to
Resources

also seeks to progress in reducing unnecessary regulatory burden on the
industry and improving public confidence in NRC*s operations. One official
said it is a balancing act to minimize the time and steps it takes to
license a facility while at the same time being sure that the agency is
licensing a safe operation. Several NRC officials also said current
performance measures track office efficiency well but capture the quality
of license review poorly. NRC officials said they are beginning to develop
performance measures

that better capture quality. For example, NRR is now using a template to
assess the quality of its evaluation of safety issues during review of
licensing actions. Officials believe that when measures of quality are in
place, they can be used to determine whether adjusting budget resources
will have an effect on the quality of their activities.

New strategies, such as risk- based regulation and oversight programs, can
dictate changes in performance measures. NRC must also keep its
performance measures relevant as the industry changes. Several examples
illustrate these points. NRC plans to develop new performance measures for
reviewing applications to upgrade power output from existing plants
because of concern that existing measures did not accurately measure NRC
performance in this area. In another example, NRC is studying new
performance measures to determine if it can predict, and thus avoid,
emergent problems in the Reactor Oversight Program. NRC and industry
representatives jointly developed a new set of performance indicators to
measure availability of nuclear plant safety systems. NRC believes the new

performance indicators will provide more accurate risk assessments.

Link between Expected NRC officials said that linking outcomes to
resources is challenging for

Outcomes and Resource several reasons. First, the budget process focuses
on performance targets

Requests Is Not Always Clear and budget decisions for the short term while
achieving some outcomes

may take many years. Therefore, it is difficult to know the incremental
effect of adjusting resources annually for longer- term outcomes. For
example, one official noted that research leading to safer reactor design
takes many years to bear fruit. Agency officials said linking outcomes to

resources is also difficult because achieving many agency goals depends on
the actions of others not directly under NRC*s control. NRC*s strategic
plan states that achieving its strategic goals 27 requires the collective
efforts of NRC, licensees, and the agreement states. 28 Yet, as one NRC
official noted, neither NRC nor stakeholder representatives could identify
how much each contributes to achieving NRC strategic goals. Nonetheless,
this official said that both NRC and stakeholders strongly believe in
establishing quantifiable outcome measures so that all stakeholders
understand NRC*s goals. While the particular links and interdependencies
are specific to NRC, many of these challenges permeate federal agencies.
Many federal programs depend on other actors. For many federal activities
ultimate outcomes are years away, but ways must be found to evaluate
progress and make resource decisions annually. 29

Standardizing Practices and A continuing challenge during PBPM
implementation is to determine which

Techniques while Maintaining process techniques and information should be
standardized across offices. Office Flexibility Is Difficult

For example, NRC officials said the major program offices use different
procedures and methodologies to rank the contribution of their work
activities to achieving NRC performance goals. Nonstandard weighing of
priorities has made cross- office comparisons of activities and related

resource allocation decisions more challenging for NRC officials. NRC
officials said they established a task force to develop a common
methodology to prioritize the contributions of the major program offices
to

NRC goals. They said their goal is to have aspects of a common ranking 27
NRC strategic goals represent the agency*s fundamental mission and the
overall outcome NRC wants to achieve. Performance goals are the key
contributors to achieving the strategic goals.

28 An agreement state is one that NRC has authorized to regulate certain
radioactive materials. 29 A previous GAO report identified many federal
agencies that shared responsibilities with other entities for achieving
their objectives. U. S. General Accounting Office, Managing for Results:
Measuring Program Results That Are Under Limited Federal Control, GAO/
GGD99- 16 (Washington, D. C.: Dec. 11, 1998).

process among the major program offices for the fiscal year 2005 budget.
In addition, NRC is in the process of further defining the roles and
responsibilities of participants in PBPM through a management directive.
In a related example, an NRC official said the agency faces a challenge to
improve comparison of performance measures across both major program and
mission support offices. Major NRC program offices are required to include
agency strategic goals and performance goal measures in their annual
operating plans. These measures are reported in the annual performance
report by strategic arena. However, mission support offices are not
required to report on these strategic performance goals. 30 In addition,
each office has been permitted to develop additional, officespecific,
detailed performance measures to provide supplemental management
information. The Assessment Component

NRC officials describe NRC*s current assessment process as the weakest
Needs Further Work

component of PBPM. These officials said existing guidance does not
adequately describe what an assessment is or how to select programs for
evaluation. Since there is not a clear definition of what qualifies as an
assessment within Component 4, NRC performance reports vary and may not
capture the full range of assessments that occurred or are planned at NRC.

Because information contained in assessments is intended to inform the
other PBPM components, NRC officials see the performance assessment
component as a critical element of its process. For example, performance
assessments can capture key information on how the agency is performing
that can be used for setting the agency*s strategic direction. This
practice,

consistent with our framework for budget practices, can help NRC to seek
continual improvement by evaluating current program performance and
identifying alternative approaches to better achieve agency goals.

NRC is taking steps to improve its assessment process by developing a new
procedure for selecting programs and activities for evaluation. In July
2002, NRC established annual performance reviews for the four major
strategic arenas and an annual assessment plan that identifies subjects
for

30 According to NRC officials, although mission support offices are not
required to report on strategic performance goals in the Performance and
Accountability Report, some information on mission support outputs is
included in the Budget Estimates and Performance Plan.

evaluation during the upcoming fiscal year. Programs will be selected for
evaluation where a strong potential exists for performance improvement,
cost reduction, or both. Results of the program evaluations will inform
the

next strategic direction phase of PBPM and may also result in changes
during the performance monitoring process.

Implementation of New Agency officials describe the introduction of PBPM
as a culture shift

Processes Requires Commitment requiring a commitment of time and effort by
NRC employees. NRC

officials said the agency sought to facilitate this cultural change by
holding staff meetings at all levels and by using task force working
groups to introduce PBPM. The introduction and evolution of PBPM also
presents a continuing workload challenge to NRC. For example, one official
said the detailed work associated with PBPM had been added to reporting
requirements already in place. Nevertheless, key officials reported that
implementing PBPM has been worth the time and effort because it provides

a framework for more informed and focused resource allocation decisions.
According to one official, PBPM has resulted in agency officials asking
the key questions about why and how they conduct an activity.

Cost Accounting System NRC faces the challenge of developing a cost
accounting system that can

Not Fully Developed support budget decision making. Developing a cost
accounting system is

important to budget decision making because it can help managers track
direct, indirect, and unit costs of activities and compare the cost of
activities to appropriate benchmarks. 31 The October 2001 NRC Managerial
Cost Accounting Remediation Plan noted that the prior accounting system

supported general financial reporting but did not include a managerial
cost accounting system. An example in the remediation plan states that
labor hour tracking systems were not integrated with payroll systems. NRC
officials said the agency has since developed a cost accounting system to
help in resource allocation decisions. They said the new system will
integrate payroll and nonpayroll costs at a level that will enable NRC to
compare total direct costs of work activities with appropriate benchmarks.
However, officials told us that they only started using the cost
accounting system in the first two quarters of fiscal year 2002 32 and
plan to refine the information collected based on what is the most useful
and relevant. Agency officials estimate that fully implementing the system
will take 4 to 5 years.

Agency Comments and We requested comments on a draft of this report from
NRC. NRC

Our Evaluation expressed appreciation for our recognition of its efforts
and progress and

the fact that we note consistencies with our framework for budget
practices. 33 NRC expressed some concern about our report underrecognizing
how far beyond conceptual stage PBPM is, about our statement that a good
cost accounting system was necessary, and about our reference to operating
plans. We modified our language to clarify our views on the implementation
of PBPM. The agency*s letter and our response are contained in appendix I.
NRC officials also provided clarifying comments, which we have
incorporated in the report as appropriate.

31 GAO- 01- 1084SP. 32 NRC experienced delays in developing and
implementing its cost accounting system because of problems it encountered
with the contractor initially selected to develop the core system. NRC
contracted with a new vendor and purchased a software package to develop
the core system. In our January 2001 report on NRC major management
challenges, we said NRC*s staff expected to have manager*s time and labor
charges for each strategic arena available by April 2001. 33 GAO- 01-
1084SP.

We are sending copies of this report to the Chairman of the Nuclear
Regulatory Commission and will make copies available to other interested
parties upon request. In addition, the report will be available at no
charge on the GAO Web site at http:// www. gao. gov.

Please contact me on (202) 512- 9573 or Denise Fantone, Assistant
Director, on (202) 512- 4997 if you or your staff has any questions about
this report. Major contributors to this report are Robert Hadley, James
Whitcomb, and Robert Yetvin.

Sincerely yours, Paul L. Posner Managing Director, Federal Budget Analysis
Strategic Issues

Appendi xes Comments from the Nuclear Regulatory

Appendi x I

Commission Note: GAO comments supplementing those in the report text
appear at the end of this appendix. See comment 1. See comment 2. See
comment 3.

See comment 4. Now fn. 10, p. 9.

The following are GAO*s comments on the Nuclear Regulatory Commission*s
(NRC) letter dated November 22, 2002. GAO Comments 1. Our point is not
that the Planning, Budgeting, and Performance

Management Process is still at a conceptual stage but rather that
implementation is in various stages throughout NRC, and that refinement of
agencywide implementation is still necessary. This is

consistent with what we were told and saw at NRC. We modified wording to
clarify this point. (See pp. 4 and 9.)

2. We consistently have said that good cost accounting is critical to
linking resources to results/ outcomes. For example, in our recent
testimony on performance budgeting we said that the integration of
reliable cost accounting data into budget debates needs to become a key
part of the performance budgeting agenda. 34 3. NRC uses operating plans
to set milestones, track progress, and make

adjustments to improve program outcomes. This is* and was so described in
our interviews at NRC* an important part of PBPM. 4. The footnote was
modified to clarify that this report neither observed

nor evaluated reported safety problems in the Davis- Besse power plant.
(See p. 9.)

34 U. S. General Accounting Office, Performance Budgeting: Opportunities
and Challenges,

GAO- 02- 1106T (Washington, D. C.: Sept. 19, 2002).

(450095)

a

GAO United States General Accounting Office

Although in differing stages of implementation throughout NRC, NRC
designed the Planning, Budgeting, and Performance Management Process
(PBPM) to better integrate its strategic planning, budgeting, and
performance management processes. PBPM links four individual components:
(1) setting the agency*s strategic direction, (2) determining activities
and performance targets of component offices and related resources, (3)
executing the budget and monitoring performance targets and taking
corrective actions, if needed, to achieve those targets, and (4) assessing
agency progress toward achieving its goals.

GAO*s report provides examples of how the PBPM framework can influence
budget formulation and execution decisions. These examples show (1) how
NRC informs its resource allocation decisions by providing strategic
direction to operating units prior to budget formulation, (2) how
operating units that have implemented these processes link strategic
direction to budgets through tools that set priorities and assign
resources to office activities to accomplish these priorities, and (3) how
operating units monitor performance targets and make adjustments as
necessary during budget execution. In addition, agency managers have told
GAO that PBPM also promotes agencywide coordination of budget formulation
and execution decisions by providing a common language and common goals.

Integrating budget and planning processes and improving performance
management in NRC is an ongoing effort that includes addressing a series
of challenges. They are (1) creating performance measures that balance
competing goals and keep performance measures current, (2) associating
resource requests with outcomes, (3) standardizing PBPM practices and
techniques but still allowing some flexibility among offices to tailor the
process to their needs, (4) developing the assessment component, and (5)
committing significant effort to maintain PBPM. In addition, NRC must
continue developing a cost accounting system to support PBPM.

MANAGING FOR RESULTS

Efforts to Strengthen the Link Between Resources and Results at the
Nuclear Regulatory Commission

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 258. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Paul Posner (202) 512- 9573. Highlights of GAO- 03-
258, a report to the

Chairman, Subcommittee on Government Efficiency, Financial Management and
Intergovernmental Relations, House Committee on Government Reform

December 2002

Encouraging a clearer and closer link between budgeting and planning is
essential to improving federal management and instilling a greater focus
on results. Through work at various levels within the organization, this
report on the Nuclear Regulatory Commission (NRC)-- and its two companion
studies on the Administration for Children and Families (GAO- 03- 09) and
the Veterans Health Administration (GAO- 03- 10)- documents (1) what
managers considered successful efforts at creating linkages between
planning and performance information to influence resource choices and (2)
the challenges managers face in creating these linkages.

Page i GAO- 03- 258 Link Between Resources and Results at NRC

Contents Letter 1

Results in Brief 3 Background 5 Scope and Methodology 8 The Current Budget
and Planning Process 9 Planning and Performance Information Influences
Resource

Allocation Decisions in Various Ways 17 Challenges to Improving the NRC
Budget and Planning Process 22 Agency Comments and Our Evaluation 27

Appendix

Appendix I: Comments from the Nuclear Regulatory Commission 29 Figures
Figure 1: NRC Organization Chart 6

Figure 2: NRC*s Planning, Budgeting, and Performance Management Process 11
Figure 3: NRC Linked Program Activities and Funding Allocations

by General Goal (Fiscal Year 2002) 15

Abbreviations

CFO Chief Financial Officer EDO Executive Director for Operations GPRA
Government Performance and Results Act NMSS Office of Nuclear Material
Safety and Safeguards NRC Nuclear Regulatory Commission NRR Office of
Nuclear Reactor Regulation NSIR Office of Nuclear Security and Incident
Response OMB Office of Management and Budget PART Program Performance
Assessment Rating Tool PBPM Planning, Budgeting, and Performance
Management Process RES Office of Nuclear Regulatory Research RIRIP Risk-
Informed Regulation Implementation Plan

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Appendix I

Appendix I Comments from the Nuclear Regulatory Commission Page 30 GAO-
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Appendix I Comments from the Nuclear Regulatory Commission

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