United States Nuclear Regulatory Commission - Protecting People and the Environment

OIG/95A-10 - NRC Needs to Strengthen its Process for Allegations Received Regarding the High-Level Nuclear Waste Repository

Contents


Overview

Office of the Inspector General
United States Nuclear Regulatory Commission
Washington, D.C. 20555
September 13, 1995

Office of The Inspector General
Memorandum to: James M. Taylor
Executive Director for Operations
From: Thomas J. Barchi
Assistant Inspector General for Audits
Subject: NRC Needs to Strengthen its Process for Allegations Received Regarding the High-Level Nuclear Waste Repository

Attached is the Office of the Inspector General's audit report entitled, "NRC Needs to Strengthen Its Process for Allegations Received Regarding the High-Level Nuclear Waste Repository." This report addresses the U.S. Nuclear Regulatory Commission's (NRC) allegations management process related to the U.S. Department of Energy's (DOE) High-Level Nuclear Waste (HLW) Repository program.

Our audit found that NRC has implemented procedures for processing quality assurance and technical site characterization concerns related to DOE's pre-licensing HLW activities. NRC also has developed a process for handling harassment and intimidation (H&I) allegations related to these same activities. However, we believe NRC needs to improve the latter process. As a result, our report makes three recommendations.

On August 31, 1995, the Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support, responded to our report. He agreed with our recommendations and provided completion dates for agency actions to implement them.

Attachment:
As stated

cc: H. Thompson, EDO
J. Milhoan, EDO
K. Cyr, OGC
J. Hoyle, SECY
D. Rathbun, OCA
J. Blaha, EDO
R. Scroggins, OC
P. Norry, ADM
G. Cranford, IRM
R. Bangart, OSP
W. Russell, NRR
E. Jordan, AEOD
D. Morrison, RES
C. Paperiello, NMSS
J. Funches, ICC
W. Beecher, OPA
T. Martin, RI
S. Ebneter, RII
H. Miller, RIII
L. Callan, RIV
OPA-RI
OPA-RII
OPA-RIII
OPA-RIV
OPA-RIV: Walnut Creek

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Report Synopsis

The Office of the Inspector General has completed an audit of the U.S. Nuclear Regulatory Commission's (NRC) allegations management process related to the U.S. Department of Energy's (DOE) High-Level Nuclear Waste (HLW) Repository program.

According to the Nuclear Waste Policy Act, (1) DOE is to construct, operate, and permanently close a HLW storage and disposal facility; (2) NRC is to issue a final decision on the issuance of a construction authorization for the HLW repository; and, (3) NRC must make this decision within 3 to 4 years of receiving DOE's application. Therefore, the satisfactory resolution of allegations about DOE's HLW repository pre-licensing activities is important in meeting this mandated deadline.

Our audit found that NRC has implemented procedures for processing quality assurance and technical site characterization concerns related to DOE's pre-licensing HLW activities. NRC also has developed a process for handling harassment and intimidation (H&I) allegations related to these same activities.

However, we believe NRC needs to improve the latter process. The process refers H&I allegations to the DOE HLW program office for investigation rather than to an independent DOE organization. As such, we believe this creates a potential conflict of interest. We also found other areas not addressed in the current NRC guidance. These are the handling of allegers desiring anonymity, the handling of various alleger/employer relationships, and the tracking and evaluation of NRC referrals of H&I allegations to DOE for investigation. As a result, our report makes three recommendations for correcting these conditions.


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Introduction

The Office of the Inspector General (OIG) has completed an audit of the U.S. Nuclear Regulatory Commission's (NRC) allegations management process related to the U.S. Department of Energy's (DOE) High-Level Nuclear Waste (HLW) Repository program. The objective of our audit was to determine if NRC has procedures in place to ensure allegations received during the pre-licensing period of DOE's HLW repository are addressed and tracked. Appendix I contains a detailed description of our objectives, scope, and methodology.


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Background

The Nuclear Waste Policy Act of 1982 (NWPA) mandates DOE to construct, operate, and permanently close a HLW storage and disposal facility. The NWPA(1) requires NRC to issue a final decision on the issuance of a construction authorization for the HLW repository, according to applicable laws. This must be done within three years after DOE submits its construction license application. A one year extension is possible for justifiable cause. If the agency determines that it cannot meet these deadlines, NRC must report the expected delay and its reasons to Congress.

On average, NRC took five years to complete a typical reactor operating license hearing. In highly contested cases, NRC needed up to nine years to license a power reactor. The repository licensing will also likely be a highly contested case. Therefore, the satisfactory resolution of allegations about DOE's HLW repository pre-licensing activities is important in meeting the mandated deadline.

Since March 1988, NRC has received nine allegations related to the DOE HLW repository. These allegations raised a variety of concerns about DOE's pre-licensing activities in the areas of quality assurance, site characterization, and harassment and intimidation (H&I). NRC processed these allegations in one of two ways, depending on the areas of concern. NRC reviewed allegations related to quality assurance and technical site characterization by using the same procedures NRC established for assessing allegations received about other NRC licensees, license applicants, and vendors.(2)

NRC handles allegations concerning H&I differently. Historically, NRC referred H&I allegations directly to DOE's Inspector General (IG). However, NRC recently implemented a new process for handling H&I allegations as outlined in an April 1995 NRC letter to DOE. NRC now refers H&I allegations to the Director for Quality Assurance in DOE's Office of Civilian Radioactive Waste Management (OCRWM) and informs allegers about other possible avenues for resolving their concerns.


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Findings

Our audit found that NRC has procedures in place for processing quality assurance and technical site characterization concerns related to DOE's pre-licensing HLW activities. Additionally, we believe that NRC is currently complying with those procedures.

However, we found that NRC needs to improve its process for handling H&I allegations. As currently implemented, NRC forwards H&I allegations to the DOE program office for investigation rather than to an independent DOE organization. We believe this presents a conflict of interest and, if allegers do not pursue other available remedies, does not ensure that the allegers obtain an impartial evaluation of their concerns. We also found other areas not addressed in the current NRC process that we believe NRC should address. These are the handling of allegers desiring anonymity, the handling of various alleger/employer relationships, and the tracking and evaluation of NRC referrals of H&I allegations to DOE for investigation.


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Procedures for Handling Quality Assurance and Site Characterization Concerns Are In Place

A previous OIG audit report(3) found that NRC's MD 8.8, dealing with allegations, clearly describes the general policies and procedures used to receive, process, control, and dispose of allegations for NRC-regulated activities. MD 8.8 defines program objectives and areas of coverage, outlines responsibilities and authorities, and provides basic requirements for handling allegations within NRC. Emphasis is placed on determining the attributes of wrongdoing, protecting the identity of allegers, processing allegations, handling late filed allegations, and involving licensees or other affected organizations in resolving allegations.

An appendix to MD 8.8 provides more detailed procedures for processing allegations and for operating the allegation management system computer data system. It also contains specific guidelines for implementing the Commission's Statement of Policy on Confidentiality, as well as Commission approved guidelines for referring matters of wrongdoing to the NRC Office of Investigations.

A senior level manager in the Office of Nuclear Material Safety and Safeguards (NMSS) told us that NRC follows these procedures to process quality assurance and site characterization concerns raised about the DOE HLW pre-licensing activities. And, as discussed in the next section, we found that NRC complies with the requirements of MD 8.8 for these types of allegations.


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Quality Assurance and Site Characterization Concerns Are Handled According to Existing Procedures

Our review found that, as of May 1995, NRC received nine allegations related to HLW pre-licensing activities and has closed five. NRC received three allegations prior to the April 1990 issuance of NRC's current procedures for resolving allegations.

The nine allegations contained concerns about three areas: quality assurance, site characterization, and H&I. We identified that: four allegations involved quality assurance issues, one involved site characterization concerns, two identified H&I issues, and two others contained both quality assurance and H&I concerns. NRC entered all allegations into the allegation management computer data system for tracking and close out.

We found that NRC generally processed the quality assurance and site characterization concerns according to procedural requirements. NRC either referred them to DOE for resolution or initiated its own review of the issues. NRC tracked the resolution of the allegations in its computerized Allegation Management System. After NMSS initiated use of the allegation review panel process, the allegations were discussed within this forum. NRC maintained files for documentation associated with resolution of the allegations.

Of the seven allegations containing quality assurance or site characterization concerns, four are closed. During our review of these closed allegation files, we noted that in three of the four cases NRC did not follow up with the allegers. In one case, the alleger was anonymous so follow-up was impossible. In the other three cases, NRC did not provide the results of its reviews to the allegers. However, for the three open allegation files with quality assurance concerns, we found documentation indicating that NRC either followed-up with the allegers or anticipated doing so. Additionally, we believe that implementation of the allegation review panel process within NMSS provides relative confidence that proper close out will be tracked in the future.


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NRC Needs to Revise Its H&I Allegations Process for DOE's HLW Repository Prelicensing Activities

Although NRC has final regulatory authority on the disposal of HLW, DOE has not yet applied for a repository license. In a March 1988 letter, the NRC Office of the General Counsel (OGC) said:

Although DOE is required by the Nuclear Waste Policy Act ... to seek Commission review of, or comment on, various actions in the pre-license application phase, this does not constitute regulatory jurisdiction over DOE in the sense that the Commission's formal regulatory tools will apply.

The agency received two early allegations regarding H&I concerns about DOE pre-licensing activities in late 1989. Because NRC's General Counsel had determined that NRC lacked regulatory jurisdiction over DOE during pre-licensing activities, NRC referred these two H&I allegations to the DOE IG for resolution.

In 1994, NRC received information regarding two new H&I allegations. Due to the sensitive nature of one of these allegations, NRC heightened its interest in the matter of H&I during DOE pre-licensing activities. They set out a generic approach to addressing H&I in the future.

In establishing this approach, NRC representatives from the Office of Enforcement (OE), NMSS, and OGC met with the DOE IG on September 27, 1994. The NRC IG was also in attendance. A senior official in NMSS told us that the DOE IG recommended that NRC refer H&I allegations to the appropriate DOE program office. NRC interpreted this as being OCRWM, the Program Office responsible for DOE's HLW repository program. NRC subsequently revised its process for referring H&I allegations to DOE. In an April 10, 1995 letter to the Director, OCRWM, DOE, NRC said it will now provide H&I allegations received from DOE or DOE contractor employees to the Director for Quality Assurance, OCRWM, DOE.

We believe referring such allegations to OCRWM for investigation creates an inherent conflict of interest, or the appearance of such a conflict, since OCRWM may be the subject of the alleger's concerns. Therefore, we discussed this matter with the DOE IG to confirm our understanding of what he recommended to NRC. He told us that the September 27, 1994 meeting with NRC representatives was an exploratory meeting to discuss possible avenues for referring H&I allegations to DOE. He further told us that he remembered suggesting that NRC consider referring H&I allegations regarding DOE's pre-licensing activities to DOE's Office of Contractor Employee Protection (OCEP). He also said he advised the NRC representatives that, if NRC was not satisfied with OCEP's handling of any case, NRC could bring the case to him. He would then have his office investigate it and would allow NRC's Office of Investigations to review the record of the investigation.

Accordingly, we believe NRC should revise its current practice of referring H&I allegations to OCRWM. Also, we believe NRC should specifically evaluate the handling of two allegations recently referred to OCRWM for investigation. NRC should bring any concerns about the handling of these allegations to the attention of the DOE IG.

We also noted other areas NRC has not addressed in its current process that we believe need attention. These are (1) the handling of allegers desiring anonymity, (2) the handling of various alleger/employer relationships, and (3) the tracking and evaluation of NRC referrals of H&I allegations to DOE for investigation.


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Handling Allegers Desiring Anonymity

Besides referring H&I allegations to DOE, the April 10, 1995 process states that NRC will forward allegations only if the alleger is willing to have his or her identity made known to aid the investigation. However, the new process does not specify NRC actions when the alleger is not willing to have his or her name identified. We believe NRC's process needs to consider the issue of how it will handle allegations regarding H&I during DOE pre-licensing activities when allegers wish to remain anonymous to DOE or its contractors/subcontractors.


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Handling Various Alleger/Employer Relationships

We also believe NRC must consider the various alleger/employer relationship possibilities during DOE pre-licensing activities. For example, we found that Federal employees of an agency other than DOE, but working as a sub-contractor to DOE, have raised H&I allegations. We believe NRC needs to evaluate if the referral process to DOE is appropriate for these type of cases. Other avenues, such as referral to the other agency's OIG, may be more appropriate. Additionally, NRC should consider other possible alleger/employer relationships in revising its process and developing procedures to implement that process.


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Tracking and Evaluation of NRC H&I Referrals to DOE

As part of the April 10, 1995 process, NRC requested that DOE provide interim status reports on DOE's actions within 30 days of receiving the allegation from NRC. NRC also requested that DOE send the agency (1) a copy of final DOE allegation investigation reports and (2) summary reports suitable for release to the public. NMSS staff stated that they planned to monitor DOE's handling of H&I allegations. They also intend to request additional information from DOE to determine whether allegations present a basis for an NRC objection to DOE's pre-licensing activities.

As part of its internal procedures for implementing the H&I allegation process, we believe NRC needs to define how it will track and evaluate any referrals for investigation. In particular, we believe NRC should establish (1) who will review allegation investigation reports, (2) what criteria will be used to assess the investigation methodology and its conclusions, and (3) how it will track the investigation. Furthermore, NRC should indicate what it will do if the agency concludes that an investigation was not complete or adequate.


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Conclusions

The DOE HLW repository is a one-of-a-kind facility posing unique licensing challenges. The proper management and disposition of allegations is important to a smooth licensing process. We believe that NRC has procedures in place which, if followed, will effectively resolve allegations related to quality assurance and technical site characterization during the HLW pre-licensing activities.

We found, however, that NRC's current process for sending H&I concerns to DOE's HLW program office for investigation can be improved. NRC should revise its current practice to ensure that an independent DOE organization investigates such allegations. We also believe the agency should develop and implement procedures to ensure that NRC tracks and properly resolves H&I allegations about DOE pre-licensing activities. Without having such processes and procedures in place, it is possible that unsatisfactory resolution of H&I concerns could unnecessarily delay NRC's review of DOE's license application for the nation's HLW repository.


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Recommendations

We believe NRC needs to ensure that the agency has an adequate process in place for handling allegations received by NRC about DOE's HLW pre-licensing activities. Therefore, we recommend that the Director, NMSS:

(1) Revise the current process of referring H&I allegations to DOE's OCRWM and evaluate DOE's handling of two 1994 H&I allegations, referring any concerns to the DOE IG for investigation;

(2) Revise other elements of the current process to address how NRC will handle (a) allegations from allegers wishing to remain anonymous and (b) unique situations involving allegers that are both government employees and subcontractors to DOE, or other similar arrangements; and,

(3) Develop procedures to carry out NRC's revised process for handling H&I allegations about DOE and its contractors. In particular, NRC should clearly define: who will review allegation investigation reports; what criteria will be used to assess the investigation methodology and conclusions; how NRC will track the investigation; and, if the investigation is incomplete or inadequate, what will be done.


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Agency Comments

On August 31, 1995, the Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support, responded to our report. He agreed with our recommendations and provided completion dates for agency actions to implement them. The complete text of his comments are included in Appendix II.


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Objectives, Scope, and Methodology

The objective of our audit was to determine if the U.S. Nuclear Regulatory Commission (NRC) has adequate procedures for handling allegations related to the U.S. Department of Energy's (DOE) High-Level Nuclear Waste (HLW) Repository. We conducted our audit between April and May of 1995 at NRC headquarters.

We interviewed officials in the Office of Nuclear Material Safety and Safeguards and reviewed pertinent agency documentation. Such documentation included intra-agency and interagency correspondence and the nine NRC allegation files related to the HLW repository pre-licensing activities. We also conferred with the DOE Inspector General regarding the referral of harassment and intimidation (H&I) allegations about DOE pre-licensing activities to DOE's Office of Civilian Radioactive Waste Management. As part of our review, we looked at an internal report dealing with the agency's handling of H&I allegations(4). We found no reference to the handling of H&I allegations related to DOE's HLW pre-licensing activities.

We conducted our audit according to generally accepted Government auditing standards.


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Agency Comments on Draft Report

United States Nuclear Regulatory Commission
Washington, D.C. 20555-0001
August 31, 1995

Memorandum For: Thomas J. Barchi
Assistant Inspector General for Audits
Office of the Inspector General
From: Hugh L. Thompson, Jr.
Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support
Subject: Review of "Draft Report - NRC Needs to Strengthen its Process for Allegations Received Regarding the High-level Nuclear Waste Repository," OIG/95a-10

I am responding to the July 7, 1995, memorandum transmitting the subject audit report and the follow-up discussions during our meeting on August 9, 1995. I am pleased to note your conclusion that the U.S. Nuclear Regulatory Commission has procedures in place to effectively resolve allegations related to quality assurance (QA) and technical site characterization during the high-level waste pre-licensing activities. With respect to your specific recommendations, I submit the following:

Recommendation 1:

Revise the current process for referring harassment and intimidation (H&I) allegations to the U.S. Department of Energy's (DOE's) Office of Civilian Radioactive Waste Management (OCRWM) and evaluate DOE's handling of two 1994 H&I allegations, referring any concerns to the DOE Inspector General (IG), for investigation.

Response:

(a) Agree. We will hold additional discussions with DOE to address this recommendation. This is particularly necessary because the DOE Office of Contractor Employee Protection (OCEP) -- the office to which your draft report (page 9) suggested referral of such H&I allegations -- will cease to exist in its present form on October 1, 1995. As we understand from conversations with the Director of OCEP, this organization will become a part of the DOE IG office. Additionally, we intend to confirm that OCEP's successor organization can serve as the referral point for H&I allegations involving DOE employees (as well as DOE contractor/subcontractor employees). Further, we will resolve with OCEP's successor the process for addressing any chilling effect in situations that involve H&I. NMSS anticipates completing discussions with DOE and establishing a new point of contact by October 30, 1995.

(b) NRC evaluated DOE's handling of the two incidents of alleged H&I, against contractor quality control inspectors that occurred in June 1994. On April 10, 1995, NRC requested DOE, (letter from R. Bernero, Office of Nuclear Material Safety and Safeguards (NMSS) to D. Dreyfus, OCRWM, DOE) to provide a status report on DOE's investigation into the circumstances of alleged H&I involving QA inspectors and an employee of the United States Geological Survey (USGS). DOE provided a response on May 22, 1995 (letter from D. Dreyfus, OCRWM, DOE, to C. Paperiello, NMSS, NRC). DOE's response addressed the alleged H&I regarding the QA inspectors. (The USGS case was still under investigation.) NMSS staff and the Office of Investigations (OI) have reviewed the response regarding the QA inspectors. NMSS expects to respond to DOE's letter by September 30, 1995.

The DOE response (dated July 25, 1995) regarding the USGS case has been received and is being reviewed by both NMSS and OI. If any concerns are identified, they will be referred to the DOE IG. NMSS expects to respond to this DOE letter by October 30, 1995.

Recommendation 2:

Revise other elements of the current process to address how NRC will handle (a) allegations from allegers wishing to remain anonymous and (b) unique situations involving allegers who are both government employees and subcontractors to DOE, or other similar arrangements.

Response:

(a) Agree. On August 22, 1994, the Executive Director for Operations (EDO) issued interim guidance concerning informing allegers of the degree to which NRC can protect their identity. On the subject of H&I, the guidance states that allegers are to be informed that NRC will disclose their identity during an NRC investigation of the H&I. In addition, the allegers are to be informed that NRC normally will not investigate this type of case from a confidential source because H&I cannot be investigated if the alleger's name is kept confidential. The pending revision to Management Directive 8.8 includes these positions. Extrapolating this policy for allegations concerning DOE, allegers will be informed that NRC will not normally investigate anonymous allegations of H&I.

Additionally, NRC is currently in the process of revising the Commission's "Policy Statement on Confidentiality." The revision adopts the position stated in the August 22, 1994, interim guidance. The procedural revisions discussed in the response to Recommendation 3 below will include adopting the EDO's interim guidance.

(b) NMSS agrees that the current process for handling unique situations involving allegers who are both government employees and subcontractors to DOE needs revision. Therefore, for each specific case involving H&I allegations, NRC will consider whether potentially unique factors exist, such as the alleger/employer relationship, that would make referral to DOE inappropriate. The procedures will be revised to reflect this.

Recommendation 3:

Develop procedures to carry out NRC's revised process for handling H&I allegations about DOE and its contractors.

Response:

NMSS agrees that the current procedures for handling H&I need to be revised. The following revisions are proposed.

The Allegation Review Board (ARB) will continue to review the investigation reports. OI will attend ARB meetings addressing H&I allegations. OI will be responsible for reviewing the reports for investigational adequacy, and the cognizant NMSS technical staff will be responsible for reviewing the reports for technical adequacy.

Allegation activities, including H&I allegations, will be tracked in the allegation management system (AMS) from initial receipt to final resolution. The NMSS branch assigned responsibility for resolution of the allegation will ensure that NRC monitors DOE's response to NRC's requests for information on the processing of H&I allegations. (NMSS was already tracking DOE H&I allegations in AMS.) Procedures will also be revised to be consistent with any agreements reached with DOE, as identified in the response to Recommendation 1. NMSS expects to complete revisions to all of the procedures discussed in this Memorandum by November 30, 1995.


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U.S. NRC Functional Organization Chart

Figure 1: The U.S. NRC Functional Organization Chart


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Major Contributors to this Report

Anthony C. Lipuma
Director, Program and Financial Audits

Russell Irish
Audit Manager

Judith L. Leonhardt
Senior Auditor


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Glossary: Office of the Inspector General Products

Investigative

1. Investigative Report - White Cover

An Investigative Report documents pertinent facts of a case and describes available evidence relevant to allegations against individuals, including aspects of an allegation not substantiated. Investigative reports do not recommend disciplinary action against individual employees. Investigative reports are sensitive documents and contain information subject to the Privacy Act restrictions. Reports are given to officials and managers who have a need to know in order to properly determine whether administrative action is warranted. The agency is expected to advise the OIG within 90 days of receiving the investigative report as to what disciplinary or other action has been taken in response to investigative report findings.

2. Event Inquiry - Green Cover

The Event Inquiry is an investigative product that documents the examination of events or agency actions that do not focus specifically on individual misconduct. These reports identify institutional weaknesses that led to or allowed a problem to occur. The agency is requested to advise the OIG of managerial initiatives taken in response to issues identified in these reports but tracking its recommendations is not required.

3. Management Implications Report (MIR) - Memorandum

MIRs provide a "ROOT CAUSE" analysis sufficient for managers to facilitate correction of problems and to avoid similar issues in the future. Agency tracking of recommendations is not required.

Audit

4. Audit Report - Blue Cover

An Audit Report is the documentation of the review, recommendations, and findings resulting from an objective assessment of a program, function, or activity. Audits follow a defined procedure that allows for agency review and comment on draft audit reports. The audit results are also reported in the OIG's "Semiannual Report" to the Congress. Tracking of audit report recommendations and agency response is required.

5. Special Evaluation Report - Burgundy Cover

A Special Evaluation Report documents the results of short-term, limited assessments. It provides an initial, quick response to a question or issue, and data to determine whether an in-depth independent audit should be planned. Agency tracking of recommendations is not required.

Regulatory

6. Regulatory Commentary - Brown Cover

Regulatory Commentary is the review of existing and proposed legislation, regulations, and policies so as to assist the agency in preventing and detecting fraud, waste, and abuse in programs and operations. Commentaries cite the IG Act as authority for the review, state the specific law, regulation or policy examined, pertinent background information considered and identifies OIG concerns, observations, and objections. Significant observations regarding action or inaction by the agency are reported in the OIG Semiannual Report to Congress. Each report indicates whether a response is required.


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Notes:

1. Nuclear Waste Policy Act of 1982, Section 114d

2. NRC Management Directive 8.8 (MD 8.8), Management of Allegations, April 3, 1990. This Management Directive was initially issued as NRC Manual Chapter NRC-0517.

3. Review of NRC's Allegation Management System, OIG/91A-07, April 3, 1992.

4. "Report of the Review Team for Reassessment of the NRC's Program for Protecting Allegers Against Retaliation," (January 7, 1994)

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