All Reports

We audited $33.6 million of costs billed to TVA by a contractor for the administration of TVA's dental benefit program. We questioned $381,392, including (1) unsupported and duplicate claims, (2) claims paid for ineligible individuals, (3) claim payments that exceeded plan limits, and (4) ineligible orthodontic benefits. TVA is negotiating resolution of the overbillings with the contractor. Summary Only

We determined TVA had been overbilled $103,007 (out of $10.9 million that had been billed) for services performed at BFN Unit 1 by a subcontractor. The overbilling included (1) unsupported labor hours, (2) ineligible fees that had been applied to travel and relocation costs, and (3) ineligible jury duty hours. TVA is assessing our recommendations. Summary Only

We determined market value payments (MVPs) to distributors for installed water heaters and heat pumps were generally applied correctly and total invoice amounts were generally accurate, including adjustments to applicable invoices. However, (1) the energy right ?

We determined a contractor overbilled TVA $563,773 (out of $6.2 million that had been billed) for providing welding services for various nuclear projects. The overbilling included (1) labor costs due to the contractor's use of incorrect labor rates, misclassifications of personnel, and unsupported labor hours; (2) ineligible or unsupported mobilization, travel, and per diem costs; (3) direct billed overhead labor; and (4) duplicate costs. TVA agreed with most of our findings and is working with the contractor to resolve the overbillings. Summary Only

We completed agreed-upon procedures to assist the Center for Resource Solutions (CRS) in determining TVA's compliance with the annual reporting requirements of CRS' Green Pricing Accreditation Program for the year ended December 31, 2004. The required information on TVA's renewable energy initiative, "Green Power Switch," was provided to CRS. Summary Only

We reviewed $148.9 million billed to TVA by a contractor for providing uranium hexafluoride and enrichment services. We determined (1) TVA would need to revise the contract if it intended to pay the contractors actual market price for enrichment services and (2) the contractor could not comply with a contract requirement for determining a final price for enrichment services within 30 days after the end of TVA's fiscal year. TVA subsequently decided a contract revision would not be needed to ensure payment of the contractor's actual market price for enrichment services.

We determined controls related to the identification and reduction of inventory and financial reporting could be improved. Specifically, we determined (1) policy and procedure documentation were not complete, (2) business unit reviews for surplus/obsolete inventory were not effective, (3) signatory authorization of approval by the business units for inventory write-offs was not obtained, (4) inventory purchases were made for items held as surplus, and (5) inventory reserve calculations were incorrect, however, corrections were made for quarterly reporting accuracy).

We determined (1) current inventory cycle count controls may not ensure inventory on-hand is accurately counted and entered into PassPort; (2) in some warehouses, access to plant inventories is not restricted to Material Management Services (MMS) personnel or MMS-escorted personnel during non-standard work hours as required by policy; and (3) TVA's Risk Control Tracking System could be updated to more accurately reflect key financial controls of the manage site materials process. TVA management agreed with our findings and is implementing planned actions.

We determined a wireless carrier issued credits to TVA employees due to an internal system error. The credits pertained to inactive accounts and therefore had no impact on TVA's master account. The carrier was unable to validate (1) who the checks were issued to, (2) how many checks were issued, and (3) the total amount of the credits. Summary Only

We determined TVA's depreciation policy and procedures do not accurately reflect (1) control activities described in TVA's Risk Control Tracking System and (2) current management practice. TVA management is assessing our recommendations.