1. 1 National Nuclear Security Administration U.S. Department of Energy Item Level Reporting Proposal Amy B. Whitworth NNSA MC&A Program Manager

2. 2 Overview Background Proposal Path Forward

3. 3 Background The Nuclear Materials Management and Safeguards System (NMMSS) was designed during the weapons production era. NMMSS was designed as both a nuclear materials management and safeguards tool. Materials management community found that the data in NMMSS did not adequately cover all their information needs so they designed and implemented the Nuclear Material Information Assessment (NMIA). The nuclear materials management community also receives some information from the NMMSS.

4. Background (continued) NMMSS is not a safeguards tool. –The nuclear materials inventory summary information is artificially binned up into Composition of Ending Inventory Codes (COEI) and then further compiled into Reporting Identification Symbols (RIS) and also sorted by project code. –It is recognized that the binning of nuclear material inventory information in all the COEI codes is not standardized across the DOE complex. –RIS reporting for the most part encompasses multiple material balance areas (MBA). –MBAs are the accounting structures defined to identify inventory differences where they best make sense on related operations. –Many facilities with complicated processes are now implementing process monitoring on a lower level than MBA (process unit) recognizing that safeguards are more relevant at this level. 4

5. Background (continued) DOE facilities are reporting artificially binned up information on nuclear material inventories to Headquarters in accounting structures that may or may not be operationally related. Therefore, analysis on information at the RIS level such as inventory difference or material balance is essentially meaningless for safeguards purposes and can be easily misunderstood. 5

6. Background (continued) Contractor performance is essentially measured by ability to report artificially binned up information in accounting structures not relevant for safeguards. The majority of errors encountered in reporting information to the NMMSS are in the owner/project codes (used by materials management and cost financial accounting). There has never been an instance where the site changed its accountability book value for nuclear material based upon NMMSS. 6

7. Background (continued) NMMSS does not identify significant shipper/receiver differences to Headquarters nor does it report inventory differences that exceed warning or alarm limits. NMMSS does not analyze these material control indicators to identify potential site biases or trends. 7

8. Why are we doing this? Significant amounts of effort are expended to report to and reconcile with the NMMSS. Activity funded by security dollars, but no security benefit. 8 However, we recognize that there are some very important users of NMMSS data, so this proposal seeks to minimize reporting burden while still providing information necessary for the customers….

9. Proposal Inventory reporting to provide more timely, accurate, and detailed inventory information while also significantly reducing the burden on the contractor. 9

10. Proposal Submit item level information for physical inventory and shipments/receipts and enhance business practices to improve data audit trails while minimizing errors. –add reconciliation (validation) steps along the way (for PILs, transactions, and MBRs) –require the sites to provide complete and fully reconciled material balance reports(MBRs) to NMMSS (currently there is no solid requirement for the sites) at least twice a year for the March and September inventories. 10 Create a mirror of the site data

11. Proposal BEFOREAFTERBENEFIT Material Balance Report Optional for Sites, typically provided by NMMSS Frequency at least twice a year Required for Sites, provided by Sites No change in frequency Sites are responsible and accountable for providing a detailed and fully reconciled MBR to NMMSS. Reconciliation of NMMSS to site data enhanced as site must provide all detail (beginning, ending inventories, all transactions) in MBR. Physical Inventory Listing Summary data Monthly/quarterly/se mi-annual Item level data As often as needed or on demand Two step reconciliation: immediate (site to NMMSS on individual PILs) and NMMSS received to NMMSS input PIL more detailed and accurate information. Greatly enhances ability to reconcile while minimizing errors between sites, NMMSS and NMIA. Ability remains to roll-up the data by COEI, project code, material type codes, etc. as required for customers (i.e. cost financial accounting). 11

12. Proposal BEFOREAFTERBENEFIT Transactions, shipments/receipts Summary dataItem level data Two step reconciliation: immediate (site to NMMSS on individual PILs) and NMMSS received to NMMSS input More detailed, no loss of operational integrity, and potential to reduce error rate. (not checking summary line numbers) Transactions, other (internal project code transfers, decay, rounding, degradation of materials, inventory adjustments, etc.) Summary data No change, allows creation of reports for customers and maintains transactional database. 12

13. Proposal BEFOREAFTERBENEFIT Audit trailNot complete from sites to NMMSS (transactions forced for reconciliation purposes) Complete and accurate audit trail from sites to NMMSS (data mirror) Enhanced data integrity for NMMSS, NMIA, and financial cost accounting. GeneralLabor intensive for users Ability to automate and reduce errors and workload. Transparent to the customer, less errors, potentially easier to reconcile NMIA to NMMSS (from 6 months to days) 13

14. Proposal Drawbacks: –Programming changes at NMMSS (need ability to sum by project number and material type code and COEI, accept location field) –Programming changes at Sites (automate the generation of detailed data sets) –Potential concern from NRC licensed facilities they might not be able to handle item level data. (741s) –Requires directive change (potential to promulgate NNSA standard or NNSA level deviation) 14

15. Proposal Recommendations: –General Recommendations: Short Term: Improve the timeliness, accuracy and detail of the NMMSS data and reports by changing the business practices to accept reconciled, facility item level inventory data while retaining the ability of the NMMSS to reconcile external transaction. –Long Term: Improve the cost efficiency of maintaining of HSS accountability systems by adopting a common architecture. Consider migration of the NMMSS to a Data Warehouse structure based on Core LANMAS. –NMM Recommendations : Combine COEI codes (i.e. 700s to 700 only) Consider IDES as a replacement COEI codes Identify information necessary considering requirements for currency 15

16. Test Beds NTS, SRS, Y-12, ORNL July – August (60 day parallel reporting) –Item field data definition 16

17. Actions Identify field requirements for item level records (subset of information currently provided and driven by customer) –RIS, –Identification (Batch Name or in this case item ID), –DOE project code, –gross and net weights (optional in 741), –detailed material type, –element weight, –isotope weight, –weight percent, –LOE (as currently required in 741), –piece count (number of items – optional), –Site/Item Description Code (use IDES - optional), –COEI, and –owner code. File verification software –SFV Checker 17

18. Actions (continued) Identify potential NRC impacts Contact NMMSS and define universe of DOE/NRC interactions (still waiting on response) Site to site contact to assess ability to accept item level data on transactions Anticipate potential issues and recommend action to address Rounding errors Limitations on number of lines Batch Name (requiring shipper/receiver to have same name) Reporting negative inventory lines NMMSS Compatibility Error Check Pilot sites need to be in balance before beginning item level Large Inventory Datasets 18

19. Actions (continued) Draft site level project plans Revise Operating Procedure (this is Section B of the current directive) Review NMMSS SOP for reconciliation of facility MBR Identify potential classification concerns and how to address them –Sigma 3 or 5 with summary and item level, these sigmas are going away (confirmed with NA-12) Coordinate with HQ and field CFO –VTCs scheduled week of June 1. Review NMMSS definition of “error” resolve SAMS issue Conduct lean six sigma of process changes to determine benefits/efficiencies/cost savings 19

20. Questions? 20