All Reports

We audited the costs invoiced by a contractor for retroactive rate adjustments and determined the adjustments were overstated by about $12,000 due to miscellaneous billing errors. The contractor agreed with our findings. Summary Only

We reviewed TVA's contracting process and noted several areas where improvements could result in better contract management and greater contractor compliance with commercial terms and conditions. Although we noted many instances of good practices being performed by various individuals in Procurement and TVA's Strategic Business Units, these practices were not universal.

We audited $3.2 million of costs billed to TVA by a contractor for welding services performed at Browns Ferry and Sequoyah Nuclear Plants by one of its subcontractors and determined TVA had been billed $450,165 for unsupported and ineligible costs. The overbilling included (1) per diem payments that exceeded limitations or were ineligible under the contract, (2) ineligible mobilization/demobilization and travel expenses, (3) unsupported small tools and consumable costs, (4) labor costs that were either unsupported or billed at incorrect rates, and (5) unsupported subcontractor costs.

We audited $32.7 million of costs billed to TVA by a contractor providing reload fuel fabrication services for Browns Ferry Nuclear Plant and determined TVA had been overbilled $5,545 due to the contractor's use of overstated hours and incorrect labor rates. Additionally, the contract did not have a formal authorization process for certain services to be performed by the contractor and the contractor could not provide documentation of TVA's authorization for some of the services it had billed TVA. The contractor agreed to credit TVA for the overbilled amount.

We determined a TVA contractor providing nuclear security services was incurring a high level of overtime due to work schedules and headcount limitations. The headcount limitations had resulted in TVA paying $1.84 million in extra labor costs during 2004 and 2005. We estimated if the trend continued TVA would pay an extra $3.5 million over the planned three-year remaining term of the contract. TVA management stated they had reviewed the contractor's staffing levels and determined additional full-time positions were needed to man the security posts.

At the request of TVA Occupational Health and Workers' Compensation, we performed a limited scope review to assess whether policies, procedures, and key control activities ensure compliance with TVA's Prescription Safety Eyewear Program requirements. In summary, we determined TVA's policies and procedures adequately address the eligibility requirements and process to be followed in order to obtain prescription safety eyewear.

We compared Gallatin Fossil Plant (GAF) coal receipts using TVA and terminal shipment weights to identify whether any significant variances exist. Our review covered December 1, 2005, to May 3, 2006. We determined (1) coal receipt information input into FuelWorx (FWX) and the Daily Coal Report (DCR) were generally accurate and (2) significant variances exist between vendor/terminal invoiced weights and TVA delivered weights. Specifically:All but 1 of the 64 tested coal shipments were input into FWX and the DCR accurately.

At the request of TVA Nuclear (TVAN), we reviewed Stone and Webster Engineering Corporations' (SWEC) craft labor time reporting associated with the October 2005 Unit 1 Restart craft labor switch to five eight-hour straight-time work schedules. In 2005, TVA and the Tennessee Valley Trades and Labor Council modified their memorandum of understanding, including Attachment A, Mandatory ? Eight/Ten Straight-Time Attendance Agreement (LRS-54). The change was made to increase productivity (e.g., to curtail absenteeism and tardiness).

We conducted a review to assess the TVA role as rate regulator over municipal utilities and cooperatives (collectively "distributors") which purchase TVA power. The TVA Act imposes only one regulatory requirement, prohibiting discrimination between consumers of the same class. The TVA Act, however, also gives the Board authority to include terms and conditions in power contracts as needed to carry out the purposes of the Act, which include keeping rates as low as feasible.

We performed a limited scope review to determine if claims are being adjudicated in accordance with the provisions of the TVA Dental Benefit Plan. While the majority of claims reviewed were adjudicated properly, we did identify an adjudication error associated with charges for preventive services. TVA Employee Benefits had also discovered the error and subsequently addressed the issue. The dental claim administrator had reimbursed TVA in the amount of $5,353.22 and reimbursement for 16 additional charges identified by our review was pending. Summary Only