All Reports

On Monday December 22, 2008, the ash containment area at the Kingston Fossil Plant failed. Approximately 5.4 million cubic yards of fly ash and bottom ash were released onto land and adjacent waterways.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we audited Westinghouse Electric Company LLC's billed and estimated remaining material escalation costs under Contract No. 65717. In summary, we determined Westinghouse overbilled a net $26,917 in escalation costs and overestimated the remaining material escalation costs by $137,408.

The Office of the Inspector General performed an audit of the TVA's compliance with the Improper Payment Information Act (IPIA) for FY 2011. In summary, we found TVA was in compliance with IPIA requirements that were applicable to TVA. In our opinion, TVA was only required to comply with the IPIA requirement to conduct a program specific risk assessment. We reviewed the process used by TVA to identify programs susceptible to improper payments and noted it is in compliance with IPIA guidance.

We are pleased to present our report for the period October 1, 2011, through March 31, 2012. The theme of our semiannual is "Managing Change," and our feature highlights the challenges with managing one particular change-the decision to increase the Tennessee Valley Authority's (TVA) reliance on nuclear energy.In TVA's lengthy history, one thing that has remained constant is change.

The OIG audited the electric system of Meriwether Lewis Electric Cooperative (MLEC), a distributor based in Centerville, Tennessee. The objective of the audit was to determine compliance with provisions of the power contract between TVA and MLEC for the audit period July 2008 through June 2010.

Two significant conditions impacted the OIG's determination of TVA compliance for fiscal year (FY) 2011 with the Improper Payments Information Act of 2002, as amended (IPIA).First, as a government corporation, TVA is required to issue an Annual Management Report rather than a Performance Accountability Report (PAR) or Annual Financial Report (AFR), and most IPIA requirements apply to the PAR and AFR.Second, TVA's improper payments fell below the IPIA threshold in FY 2011, defined as $10 million of all program activity payments and 2.5 percent of program outlays (TVA's imprope

As part of the annual audit plan, the OIG audited Coal Quality Adjustment Reports (CQARs). Our objective was to determine if the CQARs were calculated in accordance with contract terms.During fiscal years 2008 through May 2010, Tennessee Valley Authority (TVA) processed 642 CQARs with net adjustments totaling about $110 million. We assessed the accuracy and compliance with contract terms of 18 CQARs, representing about $24.6 million, or all adjustments over $1 million.

We audited $67.9 million in costs billed to TVA between November 2006 and December 2009 for modification, supplemental maintenance, and technical support services provided at TVA nuclear plants by Williams Plant Services, LLC (Williams). Our objective was to determine if the costs billed by Williams were in accordance with the terms of the contract. In summary, we found TVA had been overbilled $1,229,401 as follows:$714,288 was overbilled for subcontractor costs for Williams' sister company, Williams Specialty Services.

As a result of issues discussed during meetings at Watts Bar Nuclear Plant (WBN), an audit was initiated to (1) assess the process for remediating Problem Evaluation Reports (PER) for the WBN Unit 2 project, and (2) determine the effectiveness of remediation stemming from the PER process.We identified improvements needed in the effectiveness and efficiency of the PER process.

OIG reviewed demurrage costs incurred from October 1, 2004, through June 13, 2011, totaling $14 million to assess why demurrage costs were incurred and what actions, if any, TVA could take to minimize these costs.We determined (1) $1,036,100 in origin demurrage costs had not been billed back to a contractor as provided for in the contract; (2) TVA had not fulfilled its contractual obligation to provide a contractor with applicable portions of barging agreements, resulting in $537,440 in unrecoverable demurrage costs; (3) $376, 667 in demurrage costs were incurred and billed back to the cont