Nuclear Material: Agencies Have Sound Procedures for Managing Exchanges but Could Improve Inventory Monitoring
Fast Facts
Certain nuclear facilities in the United States get nuclear material from foreign countries under peaceful agreements, which require that it can't be used for military purposes. To meet the requirements, facilities must track how much of their material is subject to these agreements ("obligated"). Facilities can also exchange their obligations without having to physically move any material.
Looking at these exchanges, we recommended ways to improve how the United States tracks them to ensure that it meets its international commitments.
Example of an Obligation Exchange Involving Nuclear Material
Figure showing how Facilities A and B exchange obligations on 25 grams of low-enriched uranium.
Highlights
What GAO Found
In the United States, from October 1, 2003, through November 30, 2015, there were 817 exchanges of nuclear material that carried obligations to foreign partners under nuclear cooperation agreements. These exchanges allowed the obligated nuclear material to be transferred between U.S. facilities without physically moving it. For example, if a facility had a certain amount of obligated nuclear material and another facility had at least the same amount and type of unobligated material (which is not subject to the same conditions as obligated material), the facilities could exchange the obligations on their material so that each facility had a portion of both types of material without physically moving it.
- Numbers of exchanges. Of the 817 exchanges, 802 were conducted by Nuclear Regulatory Commission (NRC)-licensed facilities—private companies and other entities involved in commercially producing nuclear energy. Of the remaining exchanges, 14 were conducted by contractors that run Department of Energy (DOE) laboratories and weapons-production sites, and 1 by an NRC licensee that does both commercial and DOE work.
- Reasons for exchanges. NRC licensees said they conducted exchanges primarily to meet their utility customer demand, as well as to avoid the high costs and safety risks associated with physically transporting nuclear material. DOE contractors said they conducted exchanges primarily to avoid physically moving nuclear material stored at a specific site.
DOE and NRC have procedures to ensure accurate tracking and reporting of data on obligation exchanges through the Nuclear Materials Management and Safeguards System (NMMSS). GAO tested elements of these procedures and generally found them to be reliable. But, GAO identified two issues that may impact the agencies' ability to effectively monitor nuclear material inventories.
- First, some facilities have carried negative obligation balances for extended periods. A negative obligation balance occurs when a facility conducts an exchange without having enough of a given material in its physical inventory to cover the exchange. In certain circumstances, negative balances may place the United States at risk of noncompliance with nuclear agreements. Negative balances have occurred because DOE and NRC have not addressed this issue in documented guidance on when facilities may carry such balances, which is inconsistent with federal internal control standards.
- Second, while unobligated low-enriched uranium (LEU) could be used to correct any future negative obligation balances, the U.S. inventory of it is declining and NMMSS does not have an early-warning monitoring capability to alert DOE when the inventory is particularly low. Federal internal control standards state that agencies should establish activities to monitor internal control systems and evaluate the results, but DOE officials said that the LEU inventory is currently sufficient and no early warning capability is needed. Without developing such a capability in NMMSS, DOE officials cannot know when the inventory of unobligated LEU becomes so low that supplies may not be available to correct negative obligation balances, thereby putting the United States at risk of not complying with its nuclear agreements.
Why GAO Did This Study
The United States must generally account for nuclear material it has obtained under nuclear cooperation agreements with foreign partners. The agreements generally impose certain conditions, including that the material be used for peaceful purposes. Material subject to such conditions is called “obligated.” The United States relies on NMMSS to track obligated material and to help demonstrate U.S. compliance with agreements. Material not subject to agreement conditions is called “unobligated.” Some forms of uranium, such as LEU, are used to maintain the nuclear weapons in the U.S. stockpile, but the U.S. inventory of unobligated LEU is declining.
GAO was asked to review the practice of obligation exchanges and the reliability of certain NMMSS data. This report examines (1) the number of obligation exchanges in the United States since 2003, and the reasons for them, and (2) how DOE and NRC ensure such exchanges are accurately tracked and reported through NMMSS. GAO analyzed NMMSS data and agency documents and interviewed agency officials, DOE contractors, and NRC licensees, among other steps.
Recommendations
GAO recommends that DOE and NRC (1) clarify in guidance when facilities may carry negative obligation balances and (2) develop an early-warning monitoring capability in NMMSS to alert DOE when the inventory of unobligated LEU is particularly low. DOE and NRC neither agreed nor disagreed with GAO's recommendations but stated that they have ongoing efforts that may address GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| National Nuclear Security Administration | To help ensure compliance with the United States' nuclear cooperation agreements, the Under Secretary for Nuclear Security, as the Administrator of the National Nuclear Security Administration, and the Nuclear Regulatory Commission, should clarify in guidance the conditions under which facilities may carry negative obligation balances. |
In June 2019, NNSA officials provided documentation indicating that NNSA had taken several initiatives to prevent facilities from carrying negative obligation balances. These steps include (1) the development of a new Nuclear Materials Management and Safeguards System (NMMSS) report to monitor facility-specific obligation balances; (2) the ongoing development of an obligations handbook that will be completed in 2020 and which will provide clarification and guidance on obligations accounting and management principles for use by U.S. nuclear fuel cycle facilities and nuclear material holders; and (3) outreach and coordination with the U.S. facilities that possesses significant inventories of foreign obligated nuclear material. Officials noted that these steps were taken in response to the recommendations in GAO-16-713.
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| Nuclear Regulatory Commission | To help ensure compliance with the United States' nuclear cooperation agreements, the Under Secretary for Nuclear Security, as the Administrator of the National Nuclear Security Administration, and the Nuclear Regulatory Commission, should clarify in guidance the conditions under which facilities may carry negative obligation balances. |
In regulations issued in May 2018 and revised in August 2020, NRC included language advising nuclear material facilities to take special care in avoiding negative obligation balances, and noted that it may be possible to report a negative foreign obligations balance in the Nuclear Materials Management and Safeguards System for a facility at any given reporting date because of the time delay in reporting shipments versus receipt of material. However, the regulations specified that the NMMSS accounting system would not be able to reconcile a facility for a material balance period until the foreign obligations at the facility are balanced. This could create an incentive for facilities to avoid such negative obligation balances in the future.
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| National Nuclear Security Administration | To help ensure compliance with the United States' nuclear cooperation agreements, the Under Secretary for Nuclear Security, as the Administrator of the National Nuclear Security Administration, and the Nuclear Regulatory Commission, should develop an early-warning monitoring capability in NMMSS to alert senior DOE officials when the inventory of unobligated LEU is particularly low. |
Initially, NNSA neither agreed nor disagreed with our recommendation. However, NNSA has taken recent steps to implement this recommendation, according to a senior NNSA official. Specifically, in September 2017, NNSA created a "facility obligations status" report. According to this official, NNSA officials will use the report to monitor negative obligation balances on an ad hoc basis throughout the year. In addition, the official noted that the report has been integrated into NNMSS operations and is being used on a monthly basis to confirm status and inventories and balances of obligated material. The official noted that NRC played a role in this action and said that the report was a "joint DOE-NRC deliverable." As such, we are closing the recommendation as implemented for both agencies.
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| Nuclear Regulatory Commission | To help ensure compliance with the United States' nuclear cooperation agreements, the Under Secretary for Nuclear Security, as the Administrator of the National Nuclear Security Administration, and the Nuclear Regulatory Commission, should develop an early-warning monitoring capability in NMMSS to alert senior DOE officials when the inventory of unobligated LEU is particularly low. |
Initially, NRC neither agreed nor disagreed with GAO's recommendation, but indicated that they would "support DOE, as appropriate" in implementing our recommendation. DOE/NNSA have taken recent steps to implement this recommendation, according to a senior NNSA official. Specifically, in September 2017, NNSA created a "facility obligations status" report. According to this official, NNSA officials will use the report to monitor negative obligation balances on an ad hoc basis throughout the year. In addition, the official noted that the report has been integrated into NNMSS operations and is being used on a monthly basis to confirm status and inventories and balances of obligated material. The official noted that NRC played a role in this action and said that the report was a "joint DOE-NRC deliverable." As such, we are closing the recommendation as implemented for both agencies.
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