NNSA conducts its activities at research and development laboratories, production plants, and other facilities (collectively referred to as the nuclear weapons complex). Specifically, NNSA operates three national laboratories that design nuclear weapons—Lawrence Livermore National Laboratory, California; Los Alamos National Laboratory, New Mexico; and the Sandia National Laboratories, New Mexico and California; and four nuclear weapons production sites—the Pantex Plant, Texas; the Y-12 National Security Complex, Tennessee; the Kansas City Plant, Missouri; and parts of the Savannah River Site, South Carolina; as well as the Nevada Test Site. To implement its programs, NNSA received about $9.1 billion for fiscal year 2006, including almost $6.4 billion for its nuclear weapons activities, about $1.6 billion for its defense nuclear nonproliferation programs, and about $782 million for the Naval Reactors program. NNSA’s appropriation also included about $766 million to provide security at its sites. NNSA requested over $9.3 billion for fiscal year 2007, including $6.4 billion for its nuclear weapons activities, $1.7 billion for its defense nuclear nonproliferation programs, and $795 million for the Naval Reactors program. According to NNSA’s Future Years Nuclear Security Program plan, between fiscal years 2007 and 2011, NNSA is proposing to spend almost $48.5 billion on its nuclear weapons, nuclear nonproliferation, and naval reactors programs. For several years before NNSA was established, external studies found problems with the organization and operation of what is now NNSA’s principal organization—DOE’s Office of Defense Programs. These studies cited continuing problems in the areas of overall management, organization, priority setting, and maintenance of a viable infrastructure and workforce. For example, the Institute for Defense Analysis’s March 1997 study, often called the “120-Day Study,” cited ambiguities and overlaps between the roles of headquarters and the field as a primary source of inefficiencies and conflict. Most influential in the creation of NNSA was the study conducted by a Special Investigative Panel of the President’s Foreign Intelligence Advisory Board. Prepared in response to a series of security problems, including public access to classified documents at the Los Alamos National Laboratory, the Board found that DOE was a dysfunctional bureaucracy incapable of reforming itself and that reorganization was clearly warranted to resolve security and counterintelligence problems. As noted earlier, the Board urged the Congress to create a new organization that, whether established as an independent agency or a semi-autonomous entity within DOE, should have a clear mission, streamlined bureaucracy, and drastically simplified lines of authority and accountability. To correct the problems identified by the Board and others, in 1999, the Congress created the NNSA. For the last several years, we have monitored various high-risk areas impacting NNSA operations and NNSA actions to implement the NNSA Act. In January 2001, and again in January 2003, we identified strategic human capital management as a governmentwide, high-risk area. We found that the lack of attention to strategic human capital planning had created a risk to the federal government’s ability to perform its missions economically, efficiently, and effectively. In that context, we have stated that strategic workforce planning is needed to address two critical needs: (1) aligning an organization’s human capital program with its current and emerging mission and programmatic goals and (2) developing long-term strategies for acquiring, developing, and retaining staff to achieve programmatic goals. In April 2001, we testified that NNSA’s efforts to establish a new organization looked promising. However, we highlighted the need for NNSA to clearly define the roles and responsibilities of headquarters and field staff and to establish clear lines of authority between NNSA and its contractors, among other things. In May 2001, NNSA announced plans to reorganize its headquarters operations. In December 2001, we noted that NNSA had set several important goals for its overall reorganization efforts, including establishing clear and direct lines of communication, clarifying the roles and responsibilities of NNSA’s headquarters and field offices, and integrating and balancing priorities across NNSA’s missions and infrastructure. However, we found that NNSA’s plans for the headquarters reorganization did not contain a clear definition of the roles and responsibilities of the headquarters organizational units. In addition to reorganizing its headquarters, in February 2002, NNSA proposed reorganizing its entire operation to solve important, long- standing issues. Specifically, NNSA proposed a new organizational structure that would (1) remove a layer of management by converting existing operations offices to one support office, (2) locate NNSA operational oversight close to laboratories and plants by strengthening its site offices, and (3) streamline federal staff and hold federal staff and contractors more accountable. In February 2002, we testified that, with the proposed new organizational structure, resolution of NNSA’s long-standing organizational issues appeared to be within NNSA’s grasp. However, we noted that NNSA’s lack of a long-term strategic approach to ensuring a well- managed workforce precluded it from identifying its current and future human capital needs, including the size of the workforce; its deployment across the organization; and the knowledge, skills, and capabilities needed to fulfill its mission. In December 2002, the Administrator of NNSA implemented the proposed reorganization. Our May 2003 report on the management of NNSA’s security program identified similar concerns about NNSA’s security organization and management. Specifically, we found that NNSA (1) had not fully defined clear roles and responsibilities for its headquarters and site security operations and (2) had shortfalls at its site offices in the total number of staff and in expertise, which could make it more difficult for the site offices to effectively oversee security activities. We therefore concluded that NNSA could not be assured that its contractors were working to maximum advantage to protect critical facilities and material from individuals seeking to inflict damage. In June 2004, we found that NNSA’s reorganization had addressed some past problems by better delineating lines of authority and improving communication. However, we also found that NNSA’s reorganization had not ensured that the agency had sufficient staff with the right skills in the right places because it had downsized its federal workforce by about 17 percent without first determining the critical skills and capabilities needed to meet its mission and program goals. Recently, in response to a July 2005 report by the Secretary of Energy’s Advisory Board’s Nuclear Weapons Complex Infrastructure Task Force on the nuclear weapons complex of the future, NNSA changed the reporting relationship of the site office managers. To facilitate the transformation of the nuclear weapons complex, the Task Force recommended that the site office managers begin reporting to the Deputy Administrator for Defense Programs instead of to the Administrator. The Task Force believed that the Deputy Administrator was the primary line manager with mission responsibility for the work conducted at the sites and that this change would better align responsibility and management of the program. In May 2006, the Administrator made this change. Although NNSA has improved its headquarters oversight of security across the nuclear weapons complex, NNSA continues to experience difficulties in developing a safeguards and security program that provides reasonable assurance that all protection objectives are being met, especially at certain locations and in several topical areas, most notably cyber security, according to our review of NNSA site office surveys and independent inspections by DOE’s Office of Independent Oversight. We analyzed the results of the surveys and inspections because NNSA and DOE security officials generally agreed that the survey and inspection results represented the best available information on the overall performance of NNSA’s security program. While the results of the surveys and inspections are not entirely consistent, they do identify weaknesses with physical security at several NNSA sites, including the Nevada Test Site, Los Alamos National Laboratory, and the Y-12 National Security Complex, and weaknesses throughout NNSA in the cyber security area. Over the last several years, NNSA’s security program has been hampered by several factors, including (1) the lack of an effective headquarters organization, (2) security staffing shortages at its site offices, (3) the lack of adequate training resources and opportunities for its site office security staff, and (4) the lack of metrics to gauge program effectiveness. According to DOE Manual 470.4-1, Safeguards and Security Program Planning and Management, NNSA must develop a safeguards and security program that ensures NNSA has the necessary protections in place to protect its security interests against malevolent acts, such as theft, diversion, sabotage, modification, compromise, or unauthorized access to nuclear weapons, nuclear weapons components, special nuclear materials, or classified and unclassified information. NNSA’s DNS is responsible for developing the administration’s security program. To determine the overall effectiveness of NNSA’s safeguards and security program, NNSA and DOE principally rely on two types of evaluations. Specifically, NNSA site offices conduct surveys of contractors’ performance while the Office of Independent Oversight conducts periodic inspections, typically every 18 months. These evaluations identify the strengths and weaknesses of NNSA’s security program and provide a basis for line management to decide on program implementation activities, including allocating resources and correcting security deficiencies. Site Office Surveys. NNSA’s site offices assess the extent to which day-to- day security activities at its contractor-operated laboratories and production facilities ensure that program objectives are met. According to DOE’s Safeguards and Security Program Planning and Management manual, the frequency of these surveys varies from 12 months to 24 months, depending on the site’s importance rating and type of materials stored at that location. The site office surveys cover 8 topical areas and 33 subtopical areas and are based on observations of performance, including compliance with DOE and NNSA security directives. Table 1 shows the 8 topical and 33 subtopical safeguards and security areas covered.