Date Issued
Report Number
2026-17605
Report Type
Inspection / Evaluation
Description
The Tennessee Valley Authority’s (TVA) Power Service Shop (PSS) performs work for internal and external customers, including mechanical, electrical and civil work. PSS invoiced approximately $128 million for 161 projects for external customers that were closed in fiscal years (FY) 2024 or 2025. According to PSS, approximately 99 percent of the external revenue is received from federal customers. TVA Standard Programs and Processes (SPP) 13.007, Other Revenue (External Business), requires TVA to recover all costs for providing products/services to external customers, including organizational direct and indirect costs and TVA corporate overhead. Due to the importance of recovering expenses for external projects, we performed an evaluation to determine if PSS was recovering costs for work performed for external customers.
We determined TVA recovered most costs for work performed by the PSS for external customers; however, some project costs were not recovered. Specifically, TVA did not recover approximately $159,000, primarily due to incorrectly applying overhead rates and not recovering costs that exceeded the original purchase order/request. We identified an additional $111,000 in estimated overhead costs that were not recovered because TVA did not have a calculated overhead rate for the organizations where the employees work.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$270000
Funds for Better Use
$0