All Reports

We evaluated TVA’s administration of Coal Quality Adjustment Reports (CQAR) to determine if the Coal Quality Adjustment Reports were accurately calculated in accordance with the contract terms. We determined CQARs were not always calculated in accordance with the applicable contractual terms, and as a result, TVA did not accurately adjust the payments made to some coal vendors. The miscalculations were due to incorrect (1) rounding of moisture, ash, and British thermal units (BTU) quality adjustment rates and (2) weighted averages used for moisture, ash, and sulfur calculations.

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 a company's cost proposal was fairly stated for a planned <br> $50 million contract.In our opinion, the company's cost proposal was overstated.

The Tennessee Valley Authority estimates the dispatch costs for coal and gas on a combination of elements including fuel pricing, physical operating characteristics, estimates of variable operating and maintenance costs, and other variables. Since heat rates are one of the primary physical characteristics used in the calculation of dispatch costs, we performed an evaluation to determine if inputs used in the development of heat rate curves were calculated accurately.

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.