All Reports

At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined the cost proposal submitted by a company for construction services for TVA bottom ash dewatering facilities. Our objective was to determine if this company's cost proposal was fairly stated for a planned $100 million contract. In our opinion, the company's cost proposal was overstated. Specifically, the company's cost proposal for the Kingston Fossil Plant (KIF) baseline project included overstated fees and costs.

At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined the cost proposal submitted by a company for engineering and management services for hydroelectric power train and associated systems. Our objective was to determine if the company's cost proposal was fairly stated for a planned $90 million contract. In our opinion, the markup rates included in the company's proposal were fairly stated.

In keeping with its responsibilities under the Inspector General Act of 1978, as amended, the OIG monitored the audit of TVA's fiscal year 2016 financial statements performed by Ernst and Young LLP (EY) to assure their work complied with Government Auditing Standards. Our review of EY's work disclosed no instance in which the firm did not comply in all material respects with generally accepted government auditing standards.

At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined a cost proposal submitted by a company for construction services for TVA bottom ash dewatering facilities. Our objective was to determine if the company's cost proposal was fairly stated for a planned $100 million contract. In our opinion, the cost proposal was overstated. Specifically, the company's proposal included: (1) overstated fees, (2) excessive subcontractor craft labor costs, and (3) contingency costs that could inflate the final costs paid for the services.

The OIG performed procedures which were requested and agreed to by TVA management solely to assist management in determining the validity of the Winning Performance (WP) payout awards for fiscal year (FY) ended September 30, 2016. The WP payout award data that was provided to the OIG and to which the agreed-upon procedures were applied is the responsibility of TVA management.

The OIG audited Information Technology's (IT) use of non-craft staff augmentation (SA) contractor employees working in IT positions during February 2016 for which TVA paid about $1.8 million in labor costs and associated labor markups. Overall, we found the majority of the 207 SA contractor employees had straight-time hourly pay rates less than or equal to TVA midpoint hourly pay rates and the rates were comparable to TVA employee pay rates for the corresponding job codes.

The OIG audited the physical and logical network architecture at a TVA location and found (1) TVA management used proven best practices in the design of the physical and wireless corporate networks; (2) the network was appropriately architected; and (3) the cable plant was installed in a neat and organized manner. However, we found the TVA network equipment was located in an unsecured room and configurations of some network devices did not follow TVA suggested baselines.(Summary Only)

The OIG identified strengths within the Generation Construction (GC) Projects organization related to (1) organizational alignment, (2) collaboration within GC departments, (3) management support of employees, and (4) employee engagement. However, we also identified inherent project management risks that, coupled with relationship issues between GC personnel and customer and support organizations, could increase the risk that GC will not be able to effectively meet its mission in the future.

The OIG audited TVA's compliance with the North American Electric Reliability Corporation's (NERC) Critical Infrastructure Protection (CIP) standards for logical and physical access for systems and locations that are considered high risk assets under NERC CIP standards. We found TVA was within the NERC CIP compliance standards for logical and physical access to high risk systems and locations with minor exceptions that were addressed during the audit.