All Reports

We performed a review to determine whether River Systems Operation & Environment (RSO&E) permitting policies and procedures (1) ensure reviews and approvals are conducted consistently and in accordance with applicable requirements and (2) are being followed. Our review included Reservoir Land Records (RSLR) established in RSO&E's Automated Land Information System during the period October 1, 2004, through July 31, 2006. In summary, we found:RSO&E has implemented permitting guidelines which, if followed, should ensure (1) that TVA regulations (18 C.F.R.

This report to the TVA Board and to Congress concludes a full year for the newly constituted TVA Boardwhich was sworn in on March 31, 2006. Legislation signed by President Bush in 2004 expanded the Board fromthree full-time members to nine part-time members with a full-time chief executive officer to run TVA on a day-todaybasis. As Director Skila Harris recently noted in an address to the TVA OIG, this change amounted to a“reinvention” of the TVA Board.

We conducted a review to determine whether TVA 's inventory management system, PassPort, accurately reflected the reported $14.3million in inventory housed at the Hartsville facility as of December20, 2006. We compared PassPort data to physical inventory on hand for 93 catalog identification numbers (CAT IDs). We found PassPort accurately reflected the location and quantity on hand for 89, or 95.7percent, of the CAT IDs selected for review.

We reviewed the first FCA that went into effect January 1, 2007. The objective of our review was to determine whether the FCA for the second quarter fiscal year 2007 was calculated correctly and in accordance with the agreed-upon methodology. In summary, we found the FCA was calculated correctly and in accordance with agreed-upon methodology. Summary Only

We surveyed TVA and financial institutions in the Tennessee Valley to identify (1) any TVA-owned cash accounts not currently accounted for by TVA's Treasury and (2) non-TVA-owned cash accounts set up in TVA's taxpayer identification number (TIN).

At the request of the Coal Acquisition and Supply, Fossil Power Group, we initiated an inspection to review and obtain information related to a coal company’s cost and profitability assertions. The company leases land from TVA and pays TVA a royalty fee per ton on all coal removed from a mine which is on the leased premises.

We audited $5.6 million of costs billed by a TVA contractor for providing construction and modification services for TVA generating plant switchyards, substations, electrical transmission system, and power control communication facilities. We found TVA had been overbilled an estimated $186,378 for (1) craft labor costs that exceeded amounts provided for by TVA’s labor agreements, (2) misclassified subcontractor labor, (3)ineligible subsistence allowance payments, and (4) unsupported costs. The contractor agreed with most of our issues and provided credits to TVA.

TVA provides engineering and technical assistance to the Federal Emergency Management Agency (FEMA) for major disasters and emergencies using TVA retirees who are working for a TVA subcontractor.

We audited $22.2 million of costs billed by a TVA contractor for providing construction and modification services for TVA generating plant switchyards, substations, electrical transmission system, and power control communication facilities. We found overbillings and overpayments of about $58,000 including (1) overbillings for small tools due primarily to the contractors application of a recovery rate to an incorrect cost base, (2) craft wages and benefits that exceeded amounts provided for by TVA's labor agreements, and (3) miscellaneous overpaid and unsupported costs.

The Daily Coal Report (DCR) is used to identify variances between vendor/terminal and TVA shipment weights and to graph the identified variances.We performed an inspection to verify that TVA and vendor/terminal shipment weights were accurately entered into the DCR for the period December 1, 2005, through May 3, 2006.Of the 482 tested coal shipments from nine fossil plants, 33 shipments were not recorded in the DCR in accordance with TVA weight documentation and/or vendor/terminal bills of lading.We also found that (1) significant variances exist between TVA coal weights and vendor/t