Estimating the administrative cost of regulatory noncompliance: A pilot method for quantifying the value of prevention

Routine regulatory inspections provide a valuable independent quality assurance review of radiation protection programs that ultimately serves to improve overall program performance. But when an item of non-compliance is noted, regardless of its significance or severity, the ensuing notice of violation (NOV) results in an added cost to both the permit holder and the regulatory authority. Such added costs may be tangible, in the form of added work to process and resolve the NOV, or intangible, in the form of damage to organizational reputation or worker morale. If the portion of the tangible costs incurred by a regulatory agency for issuing NOVs could be quantified, the analysis could aid in the identification of agency resources that might be dedicated to other areas such as prevention. Ideally, any prevention activities would reduce the overall number of NOVs issued without impacting, the routine inspection process. In this study, the administrative costs of NOV issuance and resolution was estimated by obtaining data from the professional staff of the Texas Department of Health, Bureau of Radiation Control (TDH-BRC). Based a focus group model, the data indicate that approximately $106,000 in TDH-BRC personnel resources were expended to process and resolve the 6,800 NOVs issued in Texas during 1997 inspection activities. The study's findings imply that an incremental decrease in the number of NOVs issued would result in corresponding savings of agency resources. Suggested prevention activities that might be financed through any resource savings include the dissemination of common violation data to permit holders or training for improving correspondence with regulatory agencies. The significance of this exercise is that any savings experienced by an agency could enhance permittee compliance without impacting the routine inspection process.