oversight

Observations on the Nuclear Regulatory Commission's Fiscal Year 2000 Performance Plan

Published by the Government Accountability Office on 1999-07-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office                                                           Resources, Community, and
Washington, D.C. 20548                                                                        Economic Development Division




                 B-282381

                 July 20, 1999

                 The Honorable Dick Armey
                 Majority Leader
                 House of Representatives

                 The Honorable Dan Burton
                 Chairman, Committee on Government Reform
                 House of Representatives

                 The Honorable Fred Thompson
                 Chairman, Committee on Governmental Affairs
                 United States Senate

                 Subject: Observations on the Nuclear Regulatory Commission’s Fiscal Year 2000 Performance
                 Plan

                 As you requested, we have reviewed and evaluated the fiscal year 2000 performance plans for
                 the 24 Chief Financial Officers (CFO) Act agencies that were submitted to Congress as
                 required by the Government Performance and Results Act of 1993 (Results Act). Enclosure I
                 to this letter provides our observations on the fiscal year 2000 performance plan for the
                 Nuclear Regulatory Commission (NRC). Enclosure II lists management challenges that face
                 the agency and the applicable goals and measures in the fiscal year 2000 annual performance
                 plan.

                 Our objectives were to (1) assess the usefulness of the agency’s plan for decisionmaking and
                 (2) identify the degree of improvement the agency’s fiscal year 2000 performance plan
                 represents over the fiscal year 1999 plan. Our observations were generally based on the
                 requirements of the Results Act, guidance to agencies from the Office of Management and
                 Budget (OMB) for developing the plan (OMB Circular A-11, Part 2), our previous reports and
                 knowledge of NRC’s operations and programs, and our observations on NRC’s fiscal year
                 1999 performance plan. Our summary report on the CFO Act agencies’ fiscal year 2000 plans
                                                                                             1
                 contains a complete discussion of our objectives, scope, and methodology.


                 1
                  Managing for Results: Opportunities for Continued Improvements in Agencies’ Performance Plans (GAO/GGD/AIMD-99-215,
                 July 20, 1999).




                 Page 1                                                 GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
B-282381


As agreed, unless you announce the contents of this letter earlier, we plan no further
distribution until 30 days from the date of the letter. The major contributors to this report are
listed in enclosure III. Please call me on (202) 512-3841 if you or your staff have any
questions.




Victor S. Rezendes
Director, Energy, Resources, and
  and Science

Enclosures - 3




Page 2                                       GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I

Observations on the Nuclear
Regulatory Commission's
Performance Plan for Fiscal Year
2000
The Nuclear Regulatory Commission’s (NRC) fiscal year 2000 annual performance plan
should be useful to decisionmakers in that it provides a general discussion of intended
performance across the agency and of strategies and resources the agency will use to achieve
its goals. However, the plan focuses on strategies, not outcomes and provides limited
confidence to judge the credibility of performance information because it is incomplete and
lacks specificity. Figure 1 highlights the plan’s major strengths and key weaknesses as NRC
seeks to make additional improvements to its plan.

Figure 1: Major Strengths and Key Weaknesses of Fiscal Year 2000 Annual Performance Plan

Major Strengths
• Contains measurable goals and quantifiable measures
• Discusses strategies and resources for achieving intended performance
• Better discusses crosscutting functions and external factors

Key Weaknesses
• Focuses on strategies, not outcomes
• Does not show how achieving strategies and outputs will contribute to meeting
performance goals
• Lacks details to determine that performance information is credible


NRC’s fiscal year 2000 performance plan represents a moderate improvement over the fiscal
year 1999 plan in that it indicates some degree of progress in addressing the weaknesses that
we identified in our assessment of the earlier plan. In reviewing the fiscal year 1999 plan, we
observed that NRC could have provided a clearer picture of the agency’s intended
performance overall as well as the strategies and resources it would use to achieve its
performance goals. We also noted that the fiscal year 1999 performance plan did not provide
confidence that the agency’s performance information would be credible. In its fiscal year
2000 plan, NRC (1) better discusses how its strategies and resources will help achieve its
goals, (2) links its strategies to programs, and (3) better discusses crosscutting functions with
other government agencies and external factors that could affect achieving the goals
established. However, NRC focuses on strategies, not outcomes; has not related the outputs
to its performance goals; and provides limited details to determine whether its performance
information is credible.




Page 3                                       GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




NRC’s Performance Plan Provides a General Picture of Intended
Performance Across the Agency
The plan should be useful to decisionmakers in that it provides a general picture of intended
performance across the agency. NRC has established performance goals that are precise and
measurable and, collectively, cover key aspects of the agency’s strategic goals as well as
program activities in the budget. In its fiscal year 2000 performance plan, NRC states that its
strategic goals represent the overall outcomes required to accomplish its mission. In
addition, NRC states that it has reduced its strategic arenas from seven to four and
incorporated many of its fiscal year 1999 common defense and security, public confidence,
and excellence goals into the remaining four strategic arenas. However, NRC has not directly
related its strategies to the performance plan outputs, has not related the outputs to its
performance goals, and has not established intermediate outcome goals that would link
output targets to performance goals.

NRC’s performance goals are quantifiable. For example, three of NRC’s performance goals
are zero civilian nuclear reactor accidents; zero radiation-related deaths from the civilian uses
of source, by-product, and special nuclear materials; and zero loss or theft of the special
nuclear materials regulated by NRC. In the performance plan, NRC also provides “output
measures.” These measures represent the means and strategies (processes and activities that
NRC expects to perform) to attain the performance goals. Although NRC reserves the term
“performance goal” for outcome-oriented goals, both its performance goals and output
measures seem to qualify as performance goals under the Results Act.

NRC has included some baseline and trend information in its fiscal year 2000 performance
plan. The agency uses fiscal year 1998 achievements to set the baseline.
For many years, NRC used seven indicators, such as safety system actuations, significant
events, and safety system failures, to identify the overall performance of the nuclear power
industry. NRC has frequently stated that improvements in the indicators show that the
nuclear industry is getting safer. Yet NRC did not use any of the indicators to demonstrate
the impact that its programs and related costs are having on providing a reasonable
assurance of safety.

In 1998, NRC contracted with Arthur Andersen to assess the agency’s planning, budgeting,
and performance management process. In its March 1999 report, Arthur Andersen noted that
a gap exists between NRC’s strategic goals and annual performance outputs and that the
fiscal year 2000 plan focuses on strategies, not outcomes. The report also noted that NRC’s
planning activities are not driven by organizational outcome goals, plans are not effectively
integrated across offices or programs, and the fiscal year 2000 process was driven by the
budget rather than outcomes. Both Arthur Andersen and we found that NRC has not
established the necessary links in the process; that is, NRC has not related its strategies to




Page 4                                             GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




outputs and outputs to performance goals. For example, NRC has not explained how
maintaining a regulatory framework for low-level waste disposal will prevent or mitigate
radiation exposures or releases from nuclear waste. In addition, NRC did not establish
intermediate outcome goals (for example, when discussing its research activities and
performance goal for the international nuclear safety area) that would link output targets to
its performance goals. According to NRC staff, one of the reasons that the agency
contracted with Arthur Andersen was that it recognized that it did not have the necessary
links in the process.

NRC’s fiscal year 2000 performance plan indicates a moderate improvement over the fiscal
year 1999 performance plan in that it provides a clearer picture of intended performance
across the agency. Although NRC does not link its strategies to specific performance goals, it
has linked specific strategies to its programs. For example, NRC links its reactor inspection
program to the following strategy: ensure that licensees carry out their primary responsibility
for conducting activities consistent with the agency’s regulations. Also, NRC lists output
measures for programs within each strategic arena but, like last year, does not link the output
measures to specific performance goals. For example, NRC does not explain how its output
measure of reducing the age of its licensing action inventory will affect its performance goals
to prevent a nuclear plant accident or the release of radioactive material to the environment.
Last year, we noted that NRC risked creating an excess of data that will obscure rather than
clarify performance issues by including over 110 output measures. In its fiscal year 2000 plan,
NRC reduces the number to about 60.

In addition, NRC has included specific details on its crosscutting functions with other
government agencies and relates the areas of mutual interest to its strategic arenas. NRC
states that it expects to coordinate with other agencies through memorandums of
understanding and bilateral agreements. For example, NRC shows that it shares
responsibility with the Environmental Protection Agency to protect public health and safety
and the environment for the nuclear material safety and nuclear waste strategic arenas.
However, NRC has not shown how differing program strategies reinforce one another or
established common or complementary performance measures, when appropriate. For
example, NRC says that it is seeking legislation to remedy the differences in residual
radiation standards between itself and the Environmental Protection Agency. But NRC does
not discuss the ramifications on licensees from using different criteria to decontaminate their
facilities.




Page 5                                             GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




NRC’s Performance Plan Provides a General Discussion of the
Strategies and Resources It Will Use to Achieve Its Goals
The plan should be useful to decisionmakers in that it provides a general discussion of
strategies and resources the agency will use to achieve performance goals. NRC has included
its mission statement and strategic goals in the plan and linked the strategies to various
programs within each strategic arena. But like last year, NRC has not directly linked the
strategies to performance goals and has not demonstrated how achieving the desired outputs
will contribute to meeting the performance goals. For example, NRC does not explain how
its output measure of reducing the backlog of licensing actions will impact on its
performance goals to prevent radiation-related deaths and illnesses and protect the
environment.

NRC’s plan shows how budgetary resources relate to achieving performance goals. NRC has
integrated for the first time its budget justification and performance plan as part of an
initiative to implement its planning, budgeting, and performance management process. For
each strategic arena, NRC lists spending by “function” (for example, salaries and benefits,
contract support, and travel) and by “program.” NRC crosswalks each of the programs to one
or more strategies and includes a discrete group of output measures for each program.

Because NRC’s programs generally bear a one-to-one relationship with its strategic goals, the
plan clearly shows the amount that NRC is proposing to spend on the discrete set of
performance goals, outputs, and strategies associated with its strategic goals. For example,
NRC uses a table to show the funds and staff requested for the 13 programs that constitute the
nuclear reactor safety strategic arena and 13 programs that constitute the nuclear material
safety strategic arena. However, although NRC provides some information on the
recruitment, training, and utilization of staff, it does not discuss--or refer to a separate plan
that discusses--the knowledge, skills, and abilities needed to achieve the performance goals.
Such a discussion would be particularly helpful since NRC has been reducing its staff in
response to congressional pressure.

In providing a specific discussion of the strategies and resources the agency will use to
achieve performance goals, the fiscal year 2000 performance plan is a moderate improvement
in addressing the weaknesses we identified in our assessment of the fiscal year 1999
performance plan. In reviewing the fiscal year 1999 plan, we observed that NRC did not
directly link the strategies to performance goals nor did the agency link resources to
strategies. We also noted that (1) neither the performance plan nor the fiscal year 1999
budget request showed the resources needed to achieve each performance goal, (2) the plan
did not provide a rationale for how resources would contribute to accomplishing the
expected level of performance, and (3) NRC had limited information on the impact of
external factors on its activities.




Page 6                                             GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




Among the improvements in the fiscal year 2000 plan are that NRC (1) better discusses how
its strategies and resources will help achieve its goals; (2) links its strategies to programs; and
(3) provides a much better discussion of the resources applied to, and improves the linkage
between, its strategies and outputs for its information technology activities. NRC also refers
to its information technology report and its capital asset plan, which had been provided to the
Office of Management and Budget. The information technology report briefly describes the
major information technology systems that NRC is developing; the capital asset plan shows
the estimated funding required for each system as well as the justification, funding basis,
benefits to be derived, and other information.

In addition, NRC provides information on external factors that could affect the achievement
of its goals. These factors include electric utility deregulation, a decline in the number of
commercial nuclear power plants, changes in the Department of Energy’s high-level waste
program, the 100-percent fee recovery requirement, and the need to maintain core
competencies and staff. By the nature of the issues identified, NRC implicitly relates the
external factors to some of its strategic arenas but does not relate them to specific
performance goals. With one exception, NRC describes the efforts it would take to mitigate
the effect of the external factors that it identifies. For example, in discussing electric utility
deregulation, NRC notes that it is developing measures to help ensure that utilities’ cost-
cutting efforts do not endanger safe plant operations.

However, NRC does not include all external factors key to its operations and does not
discuss, for example, the significant impact that such industry organizations as the Nuclear
Energy Institute and Institute on Nuclear Power Operations could have on achieving its goals.
Over the last 12 months, the Nuclear Energy Institute has provided extensive information and
assistance as NRC developed a new process to assess nuclear plants’ overall performance
and revise its enforcement program and plant maintenance requirements to be more risk-
informed and performance-based. With the multiplicity of activities now going on at NRC, it
is likely that the nuclear industry and other external stakeholders will continue to influence
NRC’s activities. In addition, although NRC notes that utilities are primarily responsible for
the safe operation of nuclear plants, the agency does not estimate the degree of impact that
utilities and industry organizations have on meeting its performance goals and the outputs
established. According to NRC staff, they do not believe it is possible to determine the
impact that utilities and industry organizations can have on achieving the agency’s
performance goals. They also said that NRC had not discussed the impact of any of the
external factors on achieving its goals. Without some information on the impact of external
factors/stakeholders, it will be difficult for the Congress to determine the impact that the
agency’s actions and the effectiveness of its programs have on achieving the performance
goals.




Page 7                                             GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




NRC’s Performance Plan Provides Limited Confidence That the
Agency’s Performance Information Will Be Credible
The plan provides limited confidence that NRC’s performance information will be credible
because it is incomplete and lacks specificity. NRC does not address the weaknesses that we
identified in our assessment of the fiscal year 1999 performance plan. For example, NRC
does not describe (1) specific data that are required to assess each of its performance goals,
(2) reliability and validity assessment procedures of each of its performance measures, and
(3) any actions or plans to address any limitations associated with the data or information
systems used to assess performance.

NRC recognizes the importance of valid and reliable data and associated information systems
to support its performance measurement and goal assessment. NRC provides an overview of
the sources of information, identifies the three primary data systems applicable to the
performance measures, and describes the basis for its confidence that internal and external
                                        1
data sources are reliable and accurate. However, NRC does not translate its general
recognition of the importance of performance measures and the validity and reliability of
information into specific plans for their assessment. More specifically, NRC neither
describes credible procedures to verify and validate performance information nor identifies
any significant data and/or information system limitations, their implications for assessing the
achievement of performance goals, or any actions designed to improve recognized problems.
Specifically, NRC’s plan does not

• identify specific data that will be used to measure and assess each of the 14 performance
goals and related subgoals or describe procedures designed to ensure that data associated
with each goal are sufficiently valid and reliable for performance assessment,

• describe any standards and/or procedures that it will use to assess the reliability of the
three major information systems that will be used to develop and process performance
          2
measures,

• identify any data and/or information system limitations, or




1
    Sequence Coding and Search System, Nuclear Material Events Database, and Radiation Exposure Information Report System.
2
 Generally accepted standards to assess the reliability of computer system and application controls can be found in Government
Auditing Standards (June 1994) and Assessing the Reliability of Computer-Processed Data (GAO/OP-8.1.3, Sept. 1990).




Page 8                                                     GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




• describe the agency’s plans to assess or improve the quality of its performance measures
and related information systems.

NRC does identify the primary information systems that support its performance
measurement and assessment but only briefly mentions a plan to assess these systems.
However, NRC does not provide details on the assessment plan; therefore, we could not
determine its credibility. In addition, the plan lists a set of procedures and reports that
provide NRC with a high degree of confidence in the reliability and technical accuracy of
events reported to it. Although the listed procedures generally seem sound, NRC does not
provide details to assess the credibility of those procedures to achieve their intended
purpose. NRC may have specific and credible plans, but they are not described in its fiscal
year 2000 performance plan. According to NRC staff, the agency is working to document the
processes that are used to collect data to measure performance and to further refine its
performance goals, measures, and outputs.

By providing limited confidence that the agency’s performance information will be credible,
NRC’s fiscal year 2000 performance plan shows little, if any, improvement over the fiscal year
1999 performance plan. In reviewing the fiscal year 1999 plan, we observed that most of the
data to measure performance originates with such external sources as electric utilities, fuel
cycle facility operators, or materials licensees. Yet the fiscal year 1999 plan did not address
how NRC would ensure that these external sources provide accurate, timely, and reliable
information. NRC also said that it planned to carefully examine its data systems to help
ensure that accurate and reliable data were reported. NRC did not discuss how it intended to
actually verify and validate these data. In this area, we did not see any improvement in NRC’s
fiscal year 2000 performance plan compared to its fiscal year 1999 plan.

Other Observations on NRC’s Implementation of Performance-
Based Management
NRC has undertaken various activities to implement a performance-based regulatory and
                         3
management approach. In 1993, NRC formed the Regulatory Review Group to examine its
power reactor regulations and assess the feasibility of substituting performance-based
requirements and guidance for its traditional requirements and guidance. One of NRC’s most
significant efforts to implement a performance-based approach was the implementation of
the maintenance regulations in July 1996. The regulations allow utilities to establish


3
 Nuclear Regulation: Strategy Needed to Regulate Safety Using Information on Risk (GAO/RCED-99-95, Mar. 19, 1999), Nuclear
Regulatory Commission: Strategy Needed to Develop a Risk-Informed Safety Approach (GAO/T-RCED-99-71, Feb. 4, 1999), and
Performance and Accountability Series: Major Management Challenges and Program Risks: Nuclear Regulatory Commission
(GAO/OCG-99-19, Jan. 1999).




Page 9                                                   GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




performance goals and equipment monitoring regimes, modify established goals on the basis
of plant or equipment performance, and determine whether to rely on preventive
maintenance in lieu of establishing goals and performance monitoring. The regulations also
require utilities to periodically reevaluate their maintenance programs and to consider that
the risk significance of structures, systems, and components can change as a result of plant
modifications or the availability of new information.

In addition, in January 1999, NRC released for public comment a new approach to assess
overall plant safety. As proposed, NRC’s plant assessment process would use performance
indicators; inspection results; utilities’ self-assessments; and clearly defined, objective
thresholds for making decisions. Although some performance indicators would apply to the
industry as a whole, others would be plant-specific and would depend, in part, on the results
of utilities’ risk assessments. NRC expects to use a phased approach to implement the new
process. Under this approach, it plans to begin pilot testing the use of risk-informed
performance indicators at 13 plants in June 1999. In addition, NRC staff have proposed that
the agency fully implement the process by January 2000 and complete an evaluation and
propose any adjustments or modifications needed by June 2001.

However, the Commissioners have not yet decided on the staff’s proposed implementation
schedule. NRC expects to obtain needed information through the pilot projects and will need
to factor the results into the proposed assessment process. As a result, NRC staff told us that
it is not clear that the January 2000 implementation date will apply across the industry or
whether NRC will incrementally adopt the process. Another issue that NRC is addressing is
how performance-based regulation will affect the finding of violations and the use of its
enforcement authority. According to NRC staff, in March 1999 they proposed that the
Commission integrate a changed enforcement program approach with the pilot projects for
the proposed assessment process.

NRC’s proposed fiscal year 2000 budget and performance plan reflect NRC’s continuing
commitment to move forward with a risk-informed and, ultimately, performance-based
regulatory approach. In March 1999, an NRC contractor reported that NRC’s becoming a
performance-based organization will require a long-term commitment, with many challenges
for management and staff. NRC staff, the report said, will be challenged to become outcome-
based and to be held more accountable for measurable results.

Furthermore, NRC has implemented, and described in the performance plan, its planning,
budgeting, and performance management process. Using this process, NRC will establish
goals and objectives and determine the resources and planned accomplishments needed to
achieve them. NRC staff estimate that it could take 3 to 5 years until the agency fully
implements its planning, budgeting, and performance management process and achieves the
cultural changes required to use the process in its activities. According to staff, NRC has
used a contractor to make this process more performance-based and outcome-oriented.



Page 10                                            GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




They also said that the agency has identified outcomes for the nuclear reactor safety arena
and expects to use the outcomes in its fiscal year 2001 performance plan.

In part to conform to federal cost accounting standards, NRC is developing an integrated
financial and resource management system (STARFIRE). Cost accounting standards and
concepts are designed to complement the financial accounting practices in place at NRC.
Managerial cost accounting focuses on the information needs of agency managers to support
agency functions for planning, controlling costs, decision-making, and evaluating
performance. NRC plans to use cost accounting to trace various input costs to the outputs
and outcomes realized by the agency under the Results Act. NRC expects the managerial
cost accounting features of the system to be operational in fiscal year 2000.

In the independent auditor’s report for the year ending September 30, 1998, NRC’s Office of
the Inspector General concluded that the lack of cost-accounting information undermines the
agency’s ability to demonstrate its readiness to fully comply with the Results Act
requirements in fiscal year 1999. In the fiscal year 2000 performance plan, NRC states that
once implemented, STARFIRE will, among other things, support the preparation of auditable
financial statements. However, it is not clear from NRC’s plan how the system relates to the
assessment of performance measures. NRC does not describe the part of the system that is
directly related to its performance measures and its plans to ensure that the applicable part of
the system is reliable and the resulting information credible.

Agency Comments
On April 12, 1999, we obtained comments from NRC staff, including the Deputy Chief
Financial Officer, Office of the Chief Financial Officer, on a draft of our analysis of the fiscal
year 2000 annual performance plan. According to NRC staff, the agency appreciates the
recognition of the progress noted in our report of its fiscal year 2000 performance plan. They
said that the agency is committed to moving to an outcome-oriented, performance-based
organization. NRC recognizes that a multiyear effort will be required to do so and that it
expects to continue to make progress in this endeavor. We added this information to this
report.

In addition, NRC staff said that the agency has many activities that are not included as
strategies or outputs in the performance plan. They noted, for example, that NRC has
realigned three major program offices and eliminated the Office for Analysis and Evaluation
of Operational Data and has undertaken an assessment to ensure that its research program
focuses on outcomes. NRC staff also said the agency has initiatives under way that will allow
it to make some substantial changes in the fiscal year 2001 performance plan. We have added
these activities to the report, where appropriate.




Page 11                                            GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Nuclear Regulatory Commission's Performance Plan for Fiscal Year 2000




Furthermore, NRC staff said that most of the data to measure performance are developed for
and summarized in the report of abnormal occurrences report, which NRC submits to the
Congress annually, and that the agency has procedures to review and evaluate potential
abnormal occurrences reported by licensees. NRC reiterated the points that it made last
year; in particular, the agency has a high degree of confidence about the reliability of its
information, in part, because the agency maintains an aggressive inspection program that
audits licensees to determine that they report required information. Nevertheless, the Results
Act requires that agencies describe the specific procedures they will use to assess the
reliability and validity of all data used for all performance measures as well as the
information systems used to maintain, process, and report the data. NRC has not indicated
how it will verify and validate its data to ensure that they are accurate and complete.

NRC staff also said that it would be very difficult to show a one-to-one relationship between
the improved performance of the nuclear industry over the last 10 years and the impact that
the agency’s programs have on performance or the safe operation of plants. For example,
after American Electric Power shut down its D. C. Cook plant as a result of NRC’s design
inspection, other utilities acted to correct problems at their plants. A number of variables
may affect the actions taken by utilities; therefore, NRC cannot quantify the impact that it has
on safety. Although it may be difficult for NRC to show the impact of external factors on
achieving its performance goals, without such information, it will be difficult for the Congress
to determine the impact of the agency’s actions on achieving its performance goals.




Page 12                                            GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure II

Management Challenges


The following table shows the management challenges that we noted in the Performance and
Accountability Series: Major Management Challenges and Program Risks: Nuclear
Regulatory Commission (GAO/OCG-99-19) in January 1999 and that NRC’s Office of the
Inspector General noted in a December 1998 letter to the Honorable Dick Armey, House
Majority Leader, and the Honorable Dan Burton, Chairman, of what was then the House
Committee on Government Reform and Oversight. The table also shows the specific
performance goals, strategies, and outputs, where applicable, that NRC has established to
address each management challenge.

Table II.1: Management Challenges in NRC’s Fiscal Year 2000 Performance Plans
                                                           Applicable references in the fiscal year 2000
GAO identified management challenge                        annual performance plan
NRC lacks assurance that nuclear plants are safe.          Strategic arena: Nuclear reactor safety.

NRC assumes that plants are safe if they operate as        Performance goals: (1) zero civilian nuclear reactor
designed and follow NRC’s regulations. However,            accidents, (2) maintain low frequency of events that
NRC’s regulations and other guidance do not define the     could lead to an accident, (3) zero deaths because of
conditions necessary for a plant’s safety; therefore,      radioactive releases from civilian reactors, and (4)
determining safety is subjective                           zero significant radiation exposures because of
                                                           civilian reactors.

                                                           Strategies: (1) ensure that licensees discharge their
                                                           primary responsibility for conducting safe operations,
                                                           (2) incrementally implement risk-informed and
                                                           performance-based regulatory approaches, and (3)
                                                           others.

                                                           Outputs: (1) operator licensing examinations, (2)
                                                           license renewal reviews, (3) inspections, (4) safety
                                                           assessments, (5) evaluation of operational
                                                           experience, and (6) others.
NRC is slow to require corrective action.                  Strategic arena: Nuclear reactor safety.

Although NRC’s performance indicators show that            Performance goals: (1) zero civilian nuclear reactor
conditions throughout the nuclear energy industry have     accidents, (2) maintain low frequency of events that
generally improved, they also show that several plants     could lead to an accident, (3) zero deaths because of
are chronically poor performers. At three nuclear plants   radioactive releases from civilian reactors, and (4)
with long-standing safety problems, NRC did not take       zero significant radiation exposures because of
aggressive action to ensure that the utilities corrected   civilian reactors.
the problems.
                                                           Strategies: ensure that licensees carry out their
                                                           primary responsibility for conducting activities
                                                           consistent with NRC’s regulations.

                                                           Outputs: (1) timely review of allegations, (2) timely
                                                           completion of enforcement actions and
                                                           investigations, (3) annual senior managers meeting,
                                                           (4) inspections, and (4) plant performance reviews.
NRC’s culture and organizational structure impede          Strategic arena: None—overarching issues.
effective actions.
                                                           Performance goals: None. But NRC has




Page 13                                             GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure II
Management Challenges




                                                           Applicable references in the fiscal year 2000
GAO identified management challenge                        annual performance plan
Since 1979, various reviews have concluded that            management goals that it says will achieve
NRC’s organizational structure, inadequate                 excellence and public confidence; provide the public
management control, and inability to oversee itself have   and its other stakeholders with clear and accurate
impeded the agency’s effectiveness.                        information; and sustain a diverse workforce while
                                                           employing inovative and sound business practices.

                                                           Outputs: None.



Inspector General’s areas of concern                       Applicable references in the fiscal year 2000
                                                           annual performance plan
Developing and implementing a risk-informed,               Strategic arena: Nuclear reactor safety and nuclear
performance-based approach to regulatory oversight.        material safety.

                                                           Performance goals: (1) zero civilian nuclear reactor
                                                           accidents, deaths, and significant radiation
                                                           exposures; (2) zero deaths or significant radiation
                                                           exposures from the civilian use or loss of source, by-
                                                           product, and special nuclear materials; (3) zero off-
                                                           site releases of radioactive material from operating
                                                           facilities, and (4) others.

                                                           Strategies: (1) ensure that licensees discharge their
                                                           primary responsibility for conducting safe operations;
                                                           (2) incrementally implement risk-informed,
                                                           performance-based regulatory approaches; (3)
                                                           consider risk information when authorizing the use
                                                           and storage of nuclear materials and transportation
                                                           packages; and (4) others.

                                                           Outputs: (1) operator licensing examinations; (2)
                                                           license renewal reviews; (3) inspections; (4) safety
                                                           assessments; (5) reviews for spent fuel containers;
                                                           (6) timely review of new materials licenses,
                                                           amendments, and renewals; and (7) others.
Developing information management systems and              Strategic arena: None—overarching issue.
being able to anticipate and measure the benefits to be
gained.                                                    Performance goals: None. But NRC has a
                                                           management goal to apply information technology to
                                                           streamline processes, improve information delivery,
                                                           and support scientific computing and information
                                                           needs.

                                                           Strategies: (1) increase knowledge of and ability to
                                                           apply information technology to improve
                                                           performance, (2) make sound information technology
                                                           investments that are focused on results and
                                                           responsive to customers’ needs, (3) ensure that
                                                           computer systems are Year 2000 compliant, and (4)
                                                           others.




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Enclosure II
Management Challenges




Inspector General’s areas of concern                        Applicable references in the fiscal year 2000
                                                            annual performance plan
                                                            Outputs: (1) develop demonstrable returns from the
                                                            reactor program system, agencywide integrated
                                                            financial and resource management system, and
                                                            agencywide document management system; (2)
                                                            replace workstations to support new agency
                                                            applications; (3) zero affects from the Year 2000
                                                            problem; and (4) others.
Responding to the impact of industry deregulation and       Strategic arena: Nuclear reactor safety.
license transfers.
                                                            Performance goals: None of NRC’s performance
                                                            goals specifically address this issue.

                                                            Strategies: (1) place a high priority on the review of
                                                            license transfer amendments, (2) ensure that
                                                            licensees discharge their responsibility to conduct
                                                            safe operations, and (3) others.

                                                            Outputs: evaluate operational experience and
                                                            develop the technical bases for safety and regulatory
                                                            guidance.
Administering and overseeing agency procurement             Strategic arena: None—overarching issue.
under government contracting rules.
                                                            Performance goals: None. But NRC has a
                                                            management goal: employ innovative and sound
                                                            business practices.

                                                            Strategies: NRC will acquire goods and services in a
                                                            manner that results in the best value to the agency,
                                                            ensures fair and equitable treatment for all parties
                                                            wishing to do business with NRC, and results in the
                                                            best value to the agency.

                                                            Outputs: None.
Ability to effectively communicate with the public and      Strategic arena: None—overarching issue.
industry.
                                                            Performance goals: None. But NRC has a
                                                            management goal: inspire public confidence by
                                                            providing stakeholders with clear and accurate
                                                            information.

                                                            Strategies: (1) demonstrate that its efforts enable
                                                            the nation to use nuclear materials safety and
                                                            securely; (2) respond to requests, inquiries, and
                                                            concerns of stakeholders in a timely way; and (3)
                                                            others.

                                                            Outputs: None.
Maintaining an unqualified financial statement opinion in   Strategic arena: None—overarching issue.
light of new and existing Chief Financial Officer
requirements.                                               Performance goals: None. But NRC has a
                                                            management goal to employ innovative and sound
                                                            business practices.




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Enclosure II
Management Challenges




Inspector General’s areas of concern                      Applicable references in the fiscal year 2000
                                                          annual performance plan

                                                          Strategies: NRC will create and maintain a planning,
                                                          budgeting, and performance management process
                                                          that focuses on outcomes and provides an effective
                                                          tool for setting goals, allocating resources, tracking
                                                          progress, measuring results, and identifying areas
                                                          for improvement.

                                                          Outputs: publish a timely and an unqualified
                                                          financial statement.
Ensuring that NRC’s processes, such as spent fuel cask    Strategic arena: Nuclear reactor safety, nuclear
certification and licensee renewal, are responsive to     materials safety, and nuclear waste safety.
industry needs.
                                                          Performance goals: (1) zero radiation-related deaths
                                                          and significant radiation exposures from the civilian
                                                          use or loss of source, by-product, and special
                                                          nuclear materials; (2) zero off-site releases of
                                                          radioactive material from operating facilities; and (3)
                                                          no significant accidental releases of radioactive
                                                          material from the storage or transportation of nuclear
                                                          material or waste.

                                                          Strategies: (1) develop the capability to provide
                                                          timely and independent technical bases for
                                                          regulatory decisions; (2) improve the regulatory
                                                          framework and use risk information, where
                                                          appropriate; (3) consider risk information when
                                                          authorizing the use and storage of nuclear materials
                                                          and transportation packages; and (4) place a high
                                                          priority on the review of applications for renewing
                                                          existing nuclear power plant licenses.

                                                          Outputs: (1) complete design reviews for spent fuel
                                                          containers; (2) timely review of new materials
                                                          licenses, amendments, and renewals; (3) conduct
                                                          timely inspections; (4) complete research products
                                                          that respond to high and medium priorities of the
                                                          Commission and licensees.
Ensuring that NRC’s enforcement program has an            Strategic arena: Nuclear reactor safety and nuclear
appropriate safety focus and reflects improved licensee   materials safety.
performance.
                                                          Performance goals: (1) zero civilian nuclear reactor
                                                          accidents, deaths, and significant radiation
                                                          exposures; (2) zero deaths or significant radiation
                                                          exposures from the civilian use or loss of source, by-
                                                          product, and special nuclear materials; (3) zero off-
                                                          site releases of radioactive material from operating
                                                          facilities, and (4) others.

                                                          Strategies: (1) ensure that licensees discharge their
                                                          primary responsibility for conducting safe operations;
                                                          (2) incrementally implement risk-informed,




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Enclosure II
Management Challenges




Inspector General’s areas of concern                    Applicable references in the fiscal year 2000
                                                        annual performance plan
                                                        performance-based regulatory approaches; (3)
                                                        consider risk information when authorizing the use
                                                        and storage of nuclear materials and transportation
                                                        packages; and (4) others.

                                                        Outputs: timeliness in completing enforcement
                                                        actions.
Refocusing NRC’s research program to reflect a mature   Strategic arena: Nuclear reactor safety, nuclear
industry.                                               materials safety, and nuclear waste safety.

                                                        Performance goals: None.

                                                        Strategies: (1) maintain and further develop the
                                                        capability to provide timely and independent
                                                        technical bases for regulatory decisions, (2) improve
                                                        the regulatory framework and incrementally use risk-
                                                        informed approaches, and (3) evaluate operational
                                                        experience and use the information to improve its
                                                        regulations.

                                                        Outputs: provide technical bases for safety and
                                                        regulatory guidance and decision-making.
Responding to external influences for changing NRC’s    Strategic arena: None—overarching issue.
operations, for example, NRC’s ability to meet its
mission and the requirements of the Results Act         Performance goals: None. But NRC has a
following the agency’s proposed reorganization.         management goal to employ innovative and sound
                                                        business practices.

                                                        Strategies: create and maintain a planning,
                                                        budgeting, and performance management process
                                                        that is focused on outcomes and provides an
                                                        effective tool to set goals; allocate resources; track
                                                        progress; measure results; and identify areas for
                                                        improvement.

                                                        Outputs: None.




Page 17                                           GAO/RCED-99-213R NRC’s Fiscal Year 2000 Performance Plan
Enclosure III

GAO Contacts and Staff
Acknowledgments

GAO Contact
Victor S. Rezendes,   (202) 512-3841

Acknowledgments
In addition to the contact named above, Gary Jones, Mary Ann Kruslicky, and Philip Olson
made key contributions to this product.




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