All Reports

We included an audit of the Tennessee Valley Authority’s (TVA) capital projects post projects economic assessment process in our annual audit plan because of the capital-intensive nature of the electric utility industry. TVA spent $2.076 billion on capital expenditures in fiscal year (FY) 2017 and anticipates capital expenditures of $1.974, $1.885, and $1.706 billion, respectively, in FYs 2018, 2019, and 2020.

We included an audit of the Tennessee Valley Authority’s (TVA) economic development (ED) grants in our annual audit plan based on findings from our 2013 audit of TVA’s Valley Investment Initiative, where we found TVA’s oversight of that program could be improved. Currently, there are two main grant programs utilized—Performance Grant Program and InvestPrep Program. Our audit objectives were to determine if TVA has (1) adequate processes and procedures in place for awarding ED grants and (2) established performance metrics to determine if grant program objectives are met.

We recently completed an audit of TVA’s use of fixed-wing aircraft (FWA). Subsequent to issuance of our report (on March 29, 2018), we received a concern that TVA-owned FWA flew to Oxford, Mississippi, home of TVA’s Board Chair, at least 76 times between January 2013 and February 2018. The concern stated “These trips to Oxford may represent additional occurrences of fraud and/or abuse, which deserve investigation by OIG.

The Office of the Inspector General conducted a review of Supply Chain’s Strategy and Performance (S&P) organization to identify operational and cultural strengths and risks that could impact S&P’s organizational effectiveness. Our report identified strengths within S&P related to (1) organizational alignment, (2) teamwork within departments, and (3) management support of employees. We did not identify any significant risks.

The Office of the Inspector General previously conducted an evaluation of Environmental Permitting and Compliance (EP&C) (Evaluation Report 2016-15366 issued September 28, 2016) and identified strengths and risks along with recommendations for addressing those risks. We conducted a follow-up evaluation (Evaluation Report 2017-15497 issued September 28, 2017) and determined that EP&C had taken actions to address most of the risks outlined in our initial organizational effectiveness evaluation; however, concerns with two managers’ behaviors remained unresolved.

The Office of the Inspector General conducted a review to determine if TVA’s privacy program is effective and in compliance with applicable regulations, guidance, policies, and procedures. We found several areas of the privacy program to be generally effective, including (1) controls protecting privacy information on TVA-owned mobile devices, (2) privacy training taken by network users, (3) regular reviews of the privacy program by TVA management, (4) encryption controls protecting data in privacy systems, and (5) appropriate use and protection of reports in privacy systems.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for civil projects and coal combustion residual program management work at TVA's steam electric power plants. Our examination objective was to determine if the company's cost proposal was fairly stated for a planned <br> $200 million contract.In our opinion, the company's cost proposal was overstated.

As a follow-up to an audit of a contractor where the Tennessee Valley Authority (TVA) missed early payment discount opportunities of $1,029,965, we audited TVA’s management of early payment discounts on vendor invoices. Early payment discounts are offered by some contractors for payments made prior to the due dates on invoices. Our audit objective was to determine if early payment discounts are appropriately managed by TVA.

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by Williams Plant Services, LLC (WPS) for providing indirect support services for Watts Bar Nuclear Plant Unit 2 start-up. Our audit included $104.3 million in costs paid by TVA between January 1, 2013, and August 31, 2015. Our audit objective was to determine if the costs WPS billed to TVA were in accordance with the terms of Contract No. 5487.

In this semiannual period, our audit, evaluation, and investigative activities identified approximately $57.9 million in funds TVA could put to better use, questioned costs, recoveries and savings, other monetary loss, and court-ordered forfeitures. In addition, we shared numerous opportunities for TVA to improve its programs and operations.