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. 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. 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. The steps in NRC’s billing process are described in more detail below. NRC’s OIG and internal reviews conducted by NRC in the last 5 years  identified problems with the agency’s billing process. 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. NRC also did not have a standardized  set of activity codes to be used across the agency. 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. NRC has taken or plans to take the  following two actions to address these problems:  Improving validation reports. Charging for Billable Overhead Costs

At the end of fiscal year 2012, an internal NRC audit identified  approximately $24 million in unbilled overhead hours. 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. 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. 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, 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. 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. The Project Management  Institute’s A Guide to the Project Management Body of Knowledge  identifies standards related to project management processes, including  project planning. 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. 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.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

GAO is making five recommendations, including that NRC develop a project management plan for its electronic billing initiative that follows project management standards and includes steps for involving licensees and assessing results. NRC agreed with these recommendations.