All Reports

The OIG performed a review of Lewisburg Electric System (LES) which is a distributor for TVA power based in Lewisburg, Tennessee. Our review of LES found no material issues related to (1) the proper reporting of electric sales and (2) nondiscrimination in providing electricity to members of the same rate class. However, we found a contract compliance issue regarding LES's execution of contracts with customers with demand greater than 50 kW.In addition, we found that LES had more than enough cash on hand to fund planned capital expenditures and provide a cash reserve.

The OIG performed a review of Monroe County Electric Power Association (Monroe) which is a distributor for TVA power based in Amory, Mississippi. Our review of Monroe found no material issues related to (1) the proper reporting of electric sales, and (2) nondiscrimination in providing electricity to members of the same rate class.

This report to Congress and the TVA Board comes at a time of historic challenges for TVA. We chronicle some of those recent challenges in the "Special Feature" on page 16 of our report. In many ways, a "perfect storm" has developed that has changed the landscape of TVA forever. As we note, a federal district court in Asheville, North Carolina, has ruled that a number of TVA's fossil fuel plants have created a "public nuisance" that must be abated in short order.

Following are observations from the review of documentation for 30 claims:Of the 12 claims that were disputed, 2 of the dispute letters were not submitted within 30 days after the notice of injury, as required by federal code.One claim did not include the supervisor's signature on the form.In one instance, the claim was not submitted to the Office of Workers' Compensation Programs within ten business days, due to a supervisor not forwarding his/her completed portion of the form within the allotted eight days, as required by federal code and TVA policy, respectively.We found prescr

We audited $211.6 million of costs billed to TVA by a contractor from January 1, 2006, through December 31, 2007, for the administration of TVA's medical benefit program. Our objective was to determine if the costs billed to TVA were in compliance with the contract terms and conditions. In summary, we found TVA had potentially been overbilled up to an estimated $473,024.

We reviewed TVA's process for ensuring it does not knowingly contract with vendors that have been: (1) debarred or suspended by the federal government and/or (2) found unsatisfactory within TVA. In summary, we determined:TVA does not have formal procedures for ensuring TVA does not knowingly contract with vendors that have been debarred or suspended by the federal government.

We found TVA's process for the disposal of surplus computer equipment does not adequately protect TVA resources or track the disposition of surplus equipment.

We reviewed TVA's VISA purchasing card program to (1) identify and assess the operating effectiveness of controls over the program and (2) determine if they incorporate identified best practices. The scope of the project covered all transactions from October 1, 2005, through December 31, 2007.

TVA contracted with Ernst & Young LLP (E&Y) to audit TVA's balance sheet as of September 30, 2008, and the related statements of income, changes in proprietary capital, and cash flows for the year then ended. In addition, the contract called for the review of TVA's fiscal year 2008 interim financial information filed on Form 10-Q with the Securities and Exchange Commission. The contract required the work be performed in accordance with generally accepted government auditing standards. We evaluated E&Y's work to determine compliance with these standards.

The objective of our review was to assess the procedures and key control activities used to track and account for tools on the Watts Bar Nuclear Plant Unit 2 Construction Project (WBN U2 Project).