All Reports

As part of the annual audit plan, the OIG audited Coal Quality Adjustment Reports (CQARs). Our objective was to determine if the CQARs were calculated in accordance with contract terms.During fiscal years 2008 through May 2010, Tennessee Valley Authority (TVA) processed 642 CQARs with net adjustments totaling about $110 million. We assessed the accuracy and compliance with contract terms of 18 CQARs, representing about $24.6 million, or all adjustments over $1 million.

We audited $67.9 million in costs billed to TVA between November 2006 and December 2009 for modification, supplemental maintenance, and technical support services provided at TVA nuclear plants by Williams Plant Services, LLC (Williams). Our objective was to determine if the costs billed by Williams were in accordance with the terms of the contract. In summary, we found TVA had been overbilled $1,229,401 as follows:$714,288 was overbilled for subcontractor costs for Williams' sister company, Williams Specialty Services.

As a result of issues discussed during meetings at Watts Bar Nuclear Plant (WBN), an audit was initiated to (1) assess the process for remediating Problem Evaluation Reports (PER) for the WBN Unit 2 project, and (2) determine the effectiveness of remediation stemming from the PER process.We identified improvements needed in the effectiveness and efficiency of the PER process.

OIG reviewed demurrage costs incurred from October 1, 2004, through June 13, 2011, totaling $14 million to assess why demurrage costs were incurred and what actions, if any, TVA could take to minimize these costs.We determined (1) $1,036,100 in origin demurrage costs had not been billed back to a contractor as provided for in the contract; (2) TVA had not fulfilled its contractual obligation to provide a contractor with applicable portions of barging agreements, resulting in $537,440 in unrecoverable demurrage costs; (3) $376, 667 in demurrage costs were incurred and billed back to the cont

We audited $314.9 million of costs billed to TVA by G-UB-MK Constructors for modifications and supplemental maintenance work at TVA fossil and hydro plants and other TVA-controlled facilities. In summary, we determined G-UB-MK's billings to TVA complied with the terms of the contract except for $3,783 in net overbillings for craft labor. The contractor agreed with our findings and plans to issue TVA a credit for the overbilled costs. Summary Only

This review included identifying (1) performance trends based on Institute of Nuclear Power Operations (INPO) reports, (2) major contributing factors affecting performance trends, and (3) patterns of behavior that impact culture. Our review found Nuclear Power Group's (NPG) performance with respect to the INPO index, an industry standard in trending nuclear performance, safety, and reliability, declined through 2007 and then improved through 2010. We found outages, both planned and forced, were a major contributor to changes in performance.

The OIG audited the handling and processing of personally identifiable information (PII) provided to Cartus Corporation, a contractor for TVA. Our audit evaluated the (1) processes used to safeguard data transmitted from TVA to Cartus (2) handling, processing, and security of the data at Cartus, and (3) compliance with security-related contract terms. Generally, we found TVA controls for transmission of data to Cartus and its security controls for TVA data stored on its systems were effective in protecting the data.

We reviewed the TVA compliance with the Federal Information Security Management Act (FISMA) of 2002. In summary, we determined that while TVA has made some progress in implementing information technology controls required by FISMA and work on some previously recommended actions continues, additional efforts were needed to strengthen compliance of TVA's security program with existing controls and address additional concerns.

The OIG audited the electric system of Volunteer Energy Cooperative (Volunteer), a distributor based in Decatur, Tennessee. The objective of the audit was to determine compliance with provisions of the power contract between TVA and Volunteer for the period July 2008 through June 2010. For fiscal year (FY) 2010, Volunteer provided power to approximately 110,000 customers resulting in electric sales revenue of approximately $200 million.

We reviewed the effectiveness of TVA's budget process. Our objective was to review the adequacy of the processes used in preparing, reviewing, and adopting the fiscal year 2011 budget. In general, we determined the overall design of the budget process was sufficient to achieve the desired results. We found nothing to indicate the benchmarking process was not sufficient to allow TVA to benchmark itself against its peers. We also found nothing to indicate the budget review and approval process was insufficient.