Background NRC is an independent agency established by the Energy Reorganization  Act of 1974 to license and regulate civilian uses of nuclear materials in  the United States for commercial, industrial, medical, and academic  purposes. Under the Atomic Energy Act of 1954, as amended, NRC is  responsible for issuing licenses for civilian uses of radioactive material  and conducting oversight activities under such licenses to protect the  health and safety of the public, among other things. NRC regulates  commercial nuclear power plants; research, test, and training reactors;  nuclear fuel cycle facilities; the transport, storage, and disposal of  radioactive materials and waste; and the use of radioactive materials in  medical, academic, and industrial settings. NRC is authorized to  conduct inspections and investigations; enforce regulatory requirements  by, among other things, issuing orders and imposing civil (monetary)  penalties; and revoke licenses. NRC is headed by a five-member  Commission, with members appointed by the President and confirmed by  the Senate; one commissioner is designated by the President to serve as  the Chair and official spokesperson of the Commission. NRC staff from  headquarters and the four regional offices implement the agency’s  programs for developing regulations, licensing, inspection, enforcement,  and emergency response, among other responsibilities. NRC’s Office of  the Chief Financial Officer establishes, maintains, and oversees the  implementation and interpretation of the agency’s regulatory user fee  policies and regulations, among other responsibilities. The Office of the Chief Financial Officer is responsible for assessing  service fees to licensees for each license they hold and sending licensees  invoices quarterly. The quarterly invoices for service fees may include  costs in the following three categories: NRC staff work. NRC staff record their time related to services, such  as licensing, inspections, special projects, and license reviews, which  is then billed to licensees to recover the full cost of these services. To  calculate the cost of work performed by NRC staff, NRC applies an  hourly rate—as established during the agency’s annual rulemaking  process—to the number of staff hours spent on work that is directly  attributable to a specific licensee. Overhead costs for project managers and resident inspectors. Some licensees work with an NRC project manager or resident  inspector, and NRC allocates the overhead costs for these NRC  staff to the licensees. Overhead costs cover the costs of these staff  doing tasks that are not assigned to a specific licensee, but that  benefit licensees, such as training, according to NRC staff. Project  manager and resident inspector overhead costs are calculated for  each relevant licensee as 6 percent of the licensee’s total NRC staff  time charges for the quarter. Contractor charges. NRC sometimes hires a commercial contractor  or other federal agency, such as the Department of Energy (referred  to collectively as contractors), to perform services that are directly  attributable to a licensee, such as reviewing license applications. In  these cases, NRC pays the contractor for the work and then bills the  licensee for reimbursement of the contractor’s charges. NRC’s billing process for service fees begins by identifying work that can  be billed to a specific licensee and ends when the licensee pays the  quarterly invoice. Once NRC determines that billable work needs to be  done, the agency follows the steps in the billing process shown in  figure 1. The steps in NRC’s billing process are described in more detail below. NRC assigns activity code: After billable work is identified, NRC  assigns an activity code, which is a project code to which NRC  employees charge time for billable work performed. NRC performs work: NRC staff perform work that is billable to a  licensee and record their time biweekly in electronic time cards in  NRC’s time and labor management system. If NRC staff discover that  they have recorded time incorrectly in a previous pay period, such as  by charging time to an incorrect activity code, they can correct the  error by making a prior-period adjustment. Adjustments that are made  within 6 weeks of the date of the error can be made directly in the time  and labor management system; adjustments made 6 weeks or more  after the date of the error require a memo with justification from the  employee’s office director to NRC’s Controller. Supervisors review hours: At the end of each 2-week pay period,  NRC supervisors review and approve the time cards for the staff they  supervise, including the hours charged to activity codes. Contractor performs work: If work is done by a contractor, the  contractor submits a status report and invoice to NRC each month.  Each monthly status report includes a description of the work done,  the planned completion date, the total charges for the current invoice,  the cumulative charges to date, and an estimate of future charges. NRC reviews charges: NRC staff responsible for managing the  agency’s contracts review the monthly status reports and invoices and  must approve invoices before paying the contractor. After paying a  contractor’s invoice, NRC bills the licensee for reimbursement of the  amount NRC paid to the contractor. Contractor charges are included  on a licensee’s quarterly invoice, and NRC may bill a licensee for  contractor charges after the quarter in which the work was performed. NRC aggregates charges: NRC’s financial management system  aggregates all NRC staff hours and charges from contractors biweekly  for each licensee. The financial management system obtains data on  staff hours from NRC’s time and labor management system.  Contractor charges are entered manually into the financial  management system. NRC validates charges: NRC regional and program offices review  and certify all charges to licensees after the end of each quarter. To  accomplish this, the Office of the Chief Financial Officer produces  quarterly validation reports—one for staff charges and one for  contractor charges—from NRC’s financial management system. NRC invoices licensees: NRC creates invoices each quarter and  sends them to licensees via the U.S. Postal Service. Licensees’  payments are due to NRC within 30 days of the invoice date to avoid  paying interest on the charges. Licensee reviews and pays invoice: Licensees review the invoice  and may pay the invoice, request that NRC review the fees assessed,  or dispute the fees. These billing disputes generally start informally  with the licensee contacting NRC. According to NRC staff, most  disputes are handled informally and generally entail explanations of  the agency’s billing or licensing policies. If NRC staff are unable to  resolve a licensee’s concern informally, the licensee can write a letter  to the Chief Financial Officer, which begins a formal dispute process.  According to NRC staff, to address a licensee’s concerns with the  charges, the Office of the Chief Financial Officer reviews the charges  on the invoice and may involve the relevant regional or program  offices to determine whether the charges are valid for the work  performed. Additionally, NRC’s Office of the General Counsel may be  included in disputes regarding NRC’s fee policy. After the dispute is  resolved, the licensee pays the invoice. NRC’s OIG and internal reviews conducted by NRC in the last 5 years  identified problems with the agency’s billing process. In 2012 and 2015,  for example, OIG audits identified problems with NRC’s management and  review of billable charges and recommended changes to the agency’s  internal processes and procedures—called internal controls—to improve  the accuracy of invoices. In 2013, NRC launched the Business Process  Improvement Project to determine the root causes of billing errors, many  of which were discovered during the quarterly validation step of the billing  process. The project was completed in 2014 and made recommendations  focused on strengthening internal controls and improving efficiency and  effectiveness of the billing process. Additionally, in 2016 NRC requested  feedback from the public, including licensees and other stakeholders, on  the general communications the agency provides about its fees, intending  to use the feedback to improve the transparency of its fees development  and invoicing practices. Following this effort, NRC launched its Fees  Transformation initiative to improve transparency of its fee-setting and  billing processes. NRC Has Taken  Action in Four Main  Areas to Improve Its  Billing Process NRC has recently implemented or plans to implement changes in four  main areas of its billing process to address problems identified by NRC’s  OIG and NRC internal reviews: controls over activity codes, guidance and  training for NRC staff, quarterly validation of charges, and charging  licensees for billable overhead costs. Controls over Activity  Codes NRC’s OIG and internal reviews found problems with NRC’s internal  controls over activity codes, which affected the quality of data used for  billing and other agency processes. The management of activity codes  was decentralized, meaning that staff in NRC’s offices generated the  codes and each office followed its own policies and procedures regarding  the setup and use of these codes. NRC also did not have a standardized  set of activity codes to be used across the agency. Activity codes were  instead linked to specific licensees, meaning that identical work activities  for two licensees would require two different activity codes. These  conditions resulted in an excessive number of activity codes in the  agency’s time and labor management system. According to an internal  NRC review, the decentralized management and absence of  standardized activity codes weakened internal controls and put NRC at  risk for incomplete or inaccurate billing. Further, there was no consistent  naming convention, and activity code titles often lacked the specificity  necessary for NRC staff to readily identify the correct code for the work  activity performed, according to the OIG. NRC staff could also search  and access the entire inventory of activity codes, including those  unrelated to their work. According to the OIG, these conditions increased  risk for staff to inadvertently select the wrong activity codes when  recording their time; in such cases, the wrong licensee could be billed for  the work. Starting in fiscal year 2016, the Office of the Chief Financial Officer began  taking responsibility for overseeing and managing activity codes,  including establishing, maintaining, and closing activity codes available in  the agency’s time and labor management system. Further, NRC  developed a set of standardized activity codes with titles related to the  specific work activities completed. The transition to centralized activity  code management and standardized activity codes was completed in  October 2017, according to NRC staff. Also in October 2017, the agency  implemented controls that prevent a staff member from charging time to  an activity code unless a project manager has granted that staff member  access to the code. Guidance and Training NRC’s OIG and internal reviews found problems with staff’s  understanding of their roles and responsibilities for accurate time and  labor reporting and management of billable contracts, which, according to  NRC documents, contributed to avoidable time card errors and billing  errors. To address these problems, NRC provided training and updated  guidance for staff covering the following two areas: Time and labor reporting. According to an internal NRC review, staff  were making avoidable data entry errors in time cards that  supervisors who approved the timecards were not identifying,  meaning incorrect time cards were sent to the Office of the Chief  Financial Officer for billing. In late fiscal year 2015, NRC provided  training to all agency staff to emphasize the importance of accurate  time reporting, the process for selecting correct activity codes, and the  relationship of time card entry to billing. According to NRC officials,  the agency also provided specialized training to staff in offices where  errors were common. Additionally, the agency updated its time and  labor reporting guidance and provided supplemental guidance to staff  related to time and labor reporting. Furthermore, in preparation for  changes to activity codes that were implemented in October 2017,  NRC provided additional training to staff on the new activity code  structure and making corrections to their time cards. Management of contracts. According to an internal NRC review,  approximately one-third of the billing errors identified during the  quarterly validation step of the billing process resulted from  administrative errors in managing contracts. NRC’s OIG also found  that agency guidance related to the invoice review process was  outdated and did not provide staff with sufficient criteria for verifying  information contained in contractor invoices. Without such criteria,  NRC could not ensure that it was evaluating contractor charges  consistently and appropriately before billing those charges to  licensees. In 2015, NRC provided training to staff who manage  contracts, which, according to NRC officials, resulted in an immediate  decrease in associated billing errors. NRC also revised its guidance to  clarify responsibilities, procedures, and instructions for reviewing and  approving contractor invoices. Quarterly Validation NRC’s OIG and internal reviews identified conditions that made the  quarterly validation step in the billing process challenging for staff to  perform and that led to inconsistent validation procedures among  program and regional offices. NRC has taken or plans to take the  following two actions to address these problems:  Improving validation reports. According to NRC documents, the  quarterly validation reports contained billing data for all program and  regional offices—sometimes amounting to more than 4,000 pages of  data—and the reports did not have the sorting functionality or  querying capability that would allow NRC staff to extract relevant  information. Staff in program and regional offices instead relied on  manually generated reports to compile information they needed.  Additionally, according to the OIG, the quarterly validation reports did  not include sufficient detail on contractor charges for NRC’s staff to  properly review them. To address these problems, in 2014 NRC  started providing the quarterly validation report in electronic  spreadsheet format, which gave staff the sorting and filtering  capabilities needed to extract data relevant to their respective reviews  and eliminated the need for manually generated reports, according to  NRC staff. Further, NRC began providing validation information for  contractor charges in a separate report. The new validation report for  contractor charges has more detailed information and specific  instructions for NRC staff for verifying the accuracy of the charges. Standardizing the quarterly validation process. According to NRC,  the current quarterly validation process is not standardized across the  regional and program offices and there is no agency guidance to  ensure that staff in different offices conduct the process consistently.  Further, there is currently no way to ensure that an adequately trained  person in each program or regional office is conducting the validation,  according to NRC staff. To address these problems, NRC is planning  to standardize the quarterly validation process and to establish clear  roles and responsibilities for staff participating in the process. One key  change NRC is planning is to have the individual leading the work  validate the accuracy of the charges. According to NRC’s planning  documents—dated August 2017—NRC expects to pilot the new  validation process in June 2018 and to implement it agency-wide by  October 2018. Charging for Billable  Overhead Costs At the end of fiscal year 2012, an internal NRC audit identified  approximately $24 million in unbilled overhead hours. NRC staff  explained that the hours went unbilled because project managers and  resident inspectors charged billable overhead time to nonbillable activity  codes, rather than to the billable activity codes associated with licensees. According to an internal NRC review, these errors accounted for  approximately two-thirds of the billing errors identified during the quarterly  validation process. At the beginning of fiscal year 2016, NRC started  billing this overhead time as a separate fee on invoices that is calculated  as 6 percent of all NRC billable hours on an invoice, which eliminated the  billing errors related to overhead. However, NRC analyzed this billing  method again in fiscal year 2017 and determined that eliminating the  percentage charge and having staff charge their billable overhead time to  billable activity codes would be more equitable. NRC intends to  implement a new process for charging billable overhead time at the start  of fiscal year 2019. According to NRC staff, the agency has made  administrative changes to address the factors that contributed to project  managers and resident inspectors incorrectly charging overhead time in  the past. Licensees We  Interviewed Identified  Several Challenges  with NRC’s Billing  Process, and NRC’s  Recent and Planned  Changes May Not  Fully Address Them Licensees we interviewed identified challenges with the amount of  information available about NRC’s billable work, and NRC’s recent  changes have made more information available, but some licensees are  not aware of the information. Licensees also identified challenges with  NRC’s method of delivering paper invoices by mail, and although NRC’s  recent and planned changes may help address these challenges, NRC’s  plans are incomplete. Licensees Identified  Challenges with the  Information Available  about NRC’s Billable  Work, and NRC Has Made  More Information  Available, but Some  Licensees Are Not Aware  of It Licensees we interviewed identified challenges with the amount of  information available about NRC’s billable work, including challenges  related to planning and budgeting for NRC work and verifying charges on  invoices. NRC has recently implemented changes that may address  some of the challenges. Planning and Budgeting for  NRC Work Licensees we interviewed identified challenges with planning for future  work and budgeting to pay future costs because NRC does not provide  certain information about the agency’s billable work. Specifically, NRC  does not formally provide information on timeframes for completing  billable work, customized cost estimates for projects, or the status of  ongoing work. Eleven of the 13 licensees we interviewed indicated that  having timeframes, cost estimates, status reports, or a combination of  these would be useful. One licensee explained that when it receives an  invoice for work that NRC staff have performed, the licensee does not  know how much work remains and cannot budget for future expenses. This challenge may be addressed, in part, by NRC’s Fees Transformation  initiative. Under this initiative, NRC began reporting on its public website  in September 2017 resource estimates for various licensing actions, such  as site permitting, design certifications, inspections, license amendments,  and license renewals, among others. These resource estimates include  the low, high, and average number of NRC staff hours billed for each  action, as well as some estimates for contractor charges for certain tasks.  These resource estimates are based on historical expenses and were  calculated using a sample of licensing and oversight actions, though they  may still be useful to licensees to help plan and budget for future NRC  costs. According to NRC’s website, the agency will update most of the  resource estimates every 2 years. Verifying Charges on Invoices Licensees we interviewed said that they have challenges verifying  charges on their invoices because NRC’s invoices do not provide enough  information on work that NRC staff or contractors perform. For NRC staff  work, invoices include the total hours charged by NRC staff for each  activity code. However, activity codes often cover broad topics rather than  specific work activities. Also, activity codes have a 120-character limit,  according to NRC staff, and NRC uses some of those characters to list  each licensee’s name and other identifying information, which means that  there is limited remaining space to identify the specific work activity. Nine  of the 13 licensees we interviewed explained that more descriptive activity  codes on invoices would be helpful. One licensee said that it is difficult to  know what project it is being billed for because the activity code  descriptions are cryptic and sometimes nondescript. In addition, all 13  licensees we interviewed indicated that having NRC staff names or their  positions would be helpful in verifying the accuracy of charges. For  example, 2 of these licensees explained that they are familiar with the  NRC staff who consistently work on their projects, so they could consider  questioning charges if the invoice showed a new person working on a  project. Additionally, licensees said that it is difficult to verify charges on their  invoices because NRC’s invoices also do not contain detailed information  on contractor charges. Invoices indicate that work was done by a  contractor and provide the total cost of the work, but they do not include  the contractor’s name or describe the work performed. Five of the  licensees we interviewed said that invoices do not have enough  information about the contractor and the work performed. Additionally, 4  of these licensees stated that they cannot determine whether the  amounts charged were accurate or reasonable without more information. Challenges related to verifying charges may be addressed by some of  NRC’s recent changes to its billing process, which include updating  invoices. NRC is updating its invoices to include (1) standardized activity  codes that have titles describing the specific work activity completed, (2)  the names of the NRC staff charging time to the licensee, and (3) the  name of the contractor that performed the work for which the licensee is  being billed. NRC staff expected to issue the updated invoices to  licensees in January 2018, after we completed our audit work. Therefore,  we could not assess licensees’ satisfaction with the updated invoices.  According to a planning document for some of NRC’s recent changes, the  agency intends to solicit feedback from licensees in fiscal year 2018 on  whether the updated invoices have addressed licensees’ challenges.  However, NRC staff told us that they are not certain when the agency will  solicit feedback. In addition to updating invoices, NRC can provide supplemental  information to licensees to help them verify the accuracy of the following  charges: NRC staff charges: NRC created biweekly reports on staff charges  that it sends to licensees, when requested. These biweekly reports  provide more frequent cost data and include a level of detail that is not  provided on the quarterly invoices. For example, the biweekly reports  include NRC staff names and the charges, by employee, for that 2- week period. Three of the 13 licensees we interviewed that receive  the biweekly reports said that they use the reports to check the  quarterly invoice for accuracy by adding up the costs from the  biweekly reports and comparing them to the quarterly invoice. For  example, a licensee told us that if the biweekly reports and quarterly  invoice have similar totals, it does not raise any questions about the  charges. Contractor charges: NRC has supplemental contractor information  that it can provide to licensees. NRC receives monthly status reports  from contractors on charges that are ultimately billed to licensees on  their quarterly invoices. These monthly status reports include current  work performed and associated charges, as well as remaining work to  be performed and an estimate of future charges. In 2015, NRC  developed a process to review and provide to licensees certain  information from the monthly status reports when licensees request it. Although this supplemental information on staff charges and contractor  charges is available, not all licensees know it is available. Specifically, 6  of the 13 licensees we interviewed told us that the biweekly reports would  be useful, but did not know the reports are available and can be  requested. Also, 10 of the 13 licensees we interviewed told us that  detailed information on contract work would be useful, but 9 of them did  not know this information is available and can be requested. Not all licensees know the supplemental information is available because,  according to NRC staff in the Office of the Chief Financial Officer, the  agency has not instituted a formal process to inform all licensees of its  availability. These staff added that the agency has announced the  availability of this supplemental information at industry conferences or has  told individual licensees about it. NRC staff explained that the agency is  meeting statutory requirements for issuing invoices and provides the  supplemental information as a courtesy to licensees, but is not required to  do so. According to NRC staff in the Office of the Chief Financial Officer,  the agency has not formally notified all licensees about the availability of  this supplemental information because it is time-consuming to provide it  to licensees. These staff also said that they have found that not all  licensees may need this information. This is consistent with information  from the licensees we interviewed. For example, 2 licensees told us that  they do not need biweekly reports; one said that it operates on a fixed  annual budget, so additional information on biweekly costs would not be  useful. In contrast, NRC staff noted that licensees with more complex  invoices—such as multiple sites and multiple inspections and licensing  actions—may find the supplemental information useful. Standards for  Internal Control in the Federal Government explains that management  should communicate quality information externally so that external parties  can help the entity achieve its objectives and address related risks.  Furthermore, being open and transparent in communications is part of  NRC’s Organizational Values, which guide every action it takes, how it  performs administrative tasks, and how it interacts with stakeholders.  Communicating to licensees about what information is available could  help improve the transparency of NRC’s invoices, in accordance with the  agency’s values. Additionally, 2 licensees told us that they requested information on work  being done by a contractor but NRC staff told them that the information  could not be provided. NRC staff in the Office of the Chief Financial  Officer acknowledged that some NRC project managers may not be  aware that licensees can request contract information because there is no  policy or guidance to instruct NRC staff on what information they can  provide or how to do so. Standards for Internal Control in the Federal  Government states that agency management should clearly document— in management directives, administrative policies, or operating manuals— the processes it uses to ensure that it is achieving its objectives. By  developing a policy and guidance for NRC staff, the agency could help  ensure that staff are aware of the agency’s processes and provide quality  information consistently. Licensees Identified  Challenges with NRC’s  Method for Delivering  Invoices, and NRC’s  Recent and Planned  Changes May Address  These Challenges, but Its  Plans Are Incomplete Licensees we interviewed said that NRC’s method for delivering paper  invoices by mail created challenges related to the format and timeliness  of the invoice, though NRC’s recent and planned changes may help  address these challenges. For example, one licensee told us that, without  the sorting and filtering capabilities of an electronic spreadsheet, this  licensee is not able to verify the accuracy of charges for specific  components of the work that NRC is doing. Another licensee told us that it  is difficult to track costs of projects to completion without an electronic  spreadsheet of charges. NRC now provides biweekly reports in an  electronic spreadsheet format, which may help address the challenges  these licensees cited. However, as discussed above, NRC does not  provide these biweekly reports unless they are requested, and some  licensees do not know that they are available. Licensees also cited challenges with the timeliness of invoices they  receive via mail. For example, 2 licensees stated that, with invoices taking  up to 10 days to arrive in the mail, licensees sometimes do not have  sufficient time to conduct a proper review of charges and remit payment  to NRC within the 30-day deadline. According to one licensee we  interviewed, delays in receiving the invoices have resulted in late fees. To  address the challenge of timeliness, NRC will, upon request from a  licensee, e-mail a copy of the invoice to the licensee after the hardcopy  invoice has been mailed. This practice allows the licensee to begin  reviewing its charges while waiting for the mailed copy to arrive. However,  of the 11 licensees that told us an e-mailed copy of the invoice would be  useful, 4 of them did not know this option was available. NRC staff said the agency intends to transition to electronic billing—that  is, sending invoices in electronic format via e-mail or providing licensees  with web access to review and pay invoices. According to NRC staff, the  agency’s transition to electronic billing is being done to improve efficiency  and internal controls in NRC’s billing process. However, doing so may  also help address challenges that some licensees experience with the  format and timeliness of invoices. For example, 11 of the 13 licensees we  interviewed affirmed that receiving electronic invoices or periodic  statements of charges electronically would be beneficial. In October 2016, NRC’s Commission directed NRC staff to examine  opportunities to accelerate the transition to an electronic billing system.  The agency has indicated its intent to complete the planning phase by  October 2017 and fully implement a new system by October 2019.  However, according to NRC staff, the planning phase was not completed  because the agency needed to fully implement the recent changes to its  billing process before planning for the transition to electronic billing. As a  result, the agency has not yet developed any planning documents to help  ensure that it meets its deadlines, achieves its goal of increasing  efficiency, or addresses licensees’ challenges. NRC staff in the Office of  the Chief Financial Officer said that they recognize there could be delays  in planning, but still expect to implement electronic billing by October  2019. We have previously found that federal information technology projects too  frequently incur cost overruns and schedule slippages, but that proper  planning—including incorporating best practices for project planning and  scheduling—may help mitigate these effects. The Project Management  Institute’s A Guide to the Project Management Body of Knowledge  identifies standards related to project management processes, including  project planning. In particular, the guide explains that the project plan is  a comprehensive document that defines the basis of all project work and  describes how the project will be executed, monitored, and controlled.  The project plan integrates and consolidates plans for project  components, such as plans for managing the project’s scope, schedule,  cost, quality, and risk, among others. Among other things, the project  management plan may also include requirements and techniques for  communication among stakeholders and key reviews by management. By  developing a project management plan that is consistent with best  practices, NRC would have more reasonable assurance that it is better  managing its transition to electronic billing. Furthermore, Standards for Internal Control in the Federal Government  also states that, in deciding what information is required to achieve  objectives, management should consider the needs of both internal and  external users. Additionally, we have previously identified common factors  critical to successful information technology acquisitions. Among these  factors are (1) involving end users and stakeholders in developing  requirements and (2) including end users in testing of system functionality  prior to formal end user acceptance testing. As NRC develops a project  management plan, by involving licensees in developing system  capabilities for electronic billing, which includes soliciting and considering  licensees’ information needs, the agency would have better assurance of  a successful transition to electronic billing. Additionally, Standards for Internal Control in the Federal Government  states that management should design control activities to achieve  objectives. Control activities may include establishing performance measures and indicators and management reviews that compare actual  performance to planned or expected results and analyze significant  differences. As NRC develops a project management plan, including  steps to assess the results of implementing electronic billing, which  includes comparing actual performance of the new electronic billing  system to planned results, would provide the agency more reasonable  assurance that the project meets desired outcomes. Conclusions NRC has recently implemented or plans to implement a number of  changes to its billing process that—if implemented as intended—could  address challenges that licensees identified in our interviews. However,  additional steps could enhance NRC’s efforts to improve its billing  process. Licensees told us that they could use more detailed information,  more timely information, and information in an electronic format. NRC has  made more detailed information on staff charges available in biweekly  reports and has developed a process to provide detailed information on  contractor work, upon request from a licensee. NRC is also providing  invoices in electronic format to some licensees, when requested.  However, some licensees that would find the information on staff and  contractor charges useful do not know that it is available, and some NRC  staff are not aware that they can provide it or how to do so. Until NRC  communicates to all licensees about what information is available and  develops a policy and guidance for agency staff, the agency cannot  ensure that it is providing quality information consistently. Further, NRC intends to take additional action toward improving its billing  process and invoices by transitioning to electronic billing. As NRC moves  forward with this project, developing a project management plan that is  consistent with best practices, to include establishing plans for the  project’s schedule and cost, as well as involving licensees in developing  the plan and assessing the results of implementation, will give the agency  more reasonable assurance that it is better managing its transition to  electronic billing and could help ensure that the project meets desired  outcomes. Recommendations for  Executive Action We are making the following five recommendations to NRC:  The Chief Financial Officer of NRC should formally communicate to all  licensees that supplemental billing information—including biweekly  reports and monthly status reports on contractor charges—is available  and how to request it. Formal communication that would reach all  licensees could include adding information to their quarterly invoices.  (Recommendation 1) The Chief Financial Officer of NRC should develop agency policy and  guidance for staff on what billing information related to contractor charges  NRC staff can provide to licensees and how it should be provided.  (Recommendation 2) As NRC plans its transition to electronic billing, the Chief Financial Officer  of NRC should develop a project plan that incorporates standards for  project management, which includes establishing plans for schedule and  cost. (Recommendation 3) In developing the project plan for electronic billing, the Chief Financial  Officer of NRC should include steps to involve licensees in developing  system capabilities, which includes soliciting and considering licensees’  information needs. (Recommendation 4) In developing the project plan for electronic billing, the Chief Financial  Officer of NRC should include steps to assess the results of implementing  electronic billing, which includes comparing the actual performance to  intended outcomes. (Recommendation 5) Agency Comments We provided a draft of this report to NRC for review and comment. NRC  provided written comments, which are reproduced in appendix I. In its  written comments, NRC agreed with our findings and recommendations. As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Chairman of the Nuclear Regulatory  Commission, and other interested parties. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact  me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix II. Appendix I: Comments from the Nuclear  Regulatory Commission Appendix II: GAO Contact and Staff  Acknowledgments GAO Contact Staff  Acknowledgments In addition to the contact named above, Hilary Benedict (Assistant  Director), Wyatt R. Hundrup (Analyst in Charge), and Breanna Trexler  made key contributions to this report. Also contributing to this report were  Ellen Fried, Cindy Gilbert, Heather Keister, Benjamin Licht, Laurel Plume,  Dan C. Royer, and Barbara Timmerman.
NRC is responsible for regulating the commercial nuclear industry, including nuclear power plants. NRC provides services, such as inspections, for regulated entities that hold licenses—that is, licensees. NRC recovers the costs for these services by assessing fees and billing licensees quarterly. In fiscal year 2016, NRC collected about $321 million in service fees. From 2006 to 2016, audits of NRC's fees identified problems with NRC's billing process. For example, a 2012 audit identified about $24 million in unbilled fees from fiscal years 2011 and 2012. GAO was asked to review NRC's billing process for service fees. This report examines (1) the actions NRC is taking to address problems with its billing process identified by internal reviews and (2) the challenges selected licensees identified with NRC's billing process and the extent to which NRC's actions are addressing them. GAO reviewed audits of NRC's billing process and other documents related to this process. GAO also interviewed NRC staff and a nongeneralizable sample of 13 licensees, selected based on the amount of service fees charged from October 2015 through July 2017, and compared NRC's actions against criteria on internal controls and project planning. The Office of the Inspector General for the Nuclear Regulatory Commission (NRC) and internal reviews conducted by NRC identified several problems with the agency's billing process, and NRC has implemented or plans to implement several changes to address the recommendations. For example, the codes that NRC staff use to record their work hours on time cards—referred to as activity codes—did not describe the work and did not have a consistent naming convention, which increased the risk of staff charging their time to the wrong activity codes. This could lead, in some cases, to billing errors. To address these problems, NRC created a standard naming convention for activity codes that provides more information about the activity. See the figure below for the steps in NRC's billing process for work that NRC or contractor staff performed. Some of the 13 licensees that GAO interviewed identified challenges with NRC's billing process, including its method for delivering paper invoices by mail. For example, two of these licensees stated that with invoices taking up to 10 days to arrive in the mail, they sometimes do not have sufficient time to properly review charges and remit payment to NRC within the 30-day deadline for paying the invoice. One licensee said that delays in receiving an invoice resulted in late fees. NRC is undertaking an initiative to transition to electronic billing, which may address the challenges the licensees identified and, according to NRC staff, improve the agency's billing process. However, NRC has not developed planning documents for this initiative and, according to staff, the planning phase is already past its original deadline of October 2017. The Project Management Institute has identified standards related to project management processes, including project planning. By developing a project management plan that is consistent with best practices and includes steps for involving licensees in system development and assessing results of the project, NRC would have reasonable assurance that it can better manage its electronic billing initiative.