BFI Waste Systems of North America, LLC dba South Shelby Landfill - Contract No. 15327

We performed an audit of costs billed to the Tennessee Valley Authority (TVA) by BFI Waste Systems of North America, LLC dba South Shelby Landfill (BFI) for the transportation and off-site disposal of coal combustion residual (CCR) material from TVA’s Allen Fossil Plant to BFI’s South Shelby Landfill under Contract No. 15327. Our audit objective was to determine if costs were billed in compliance with the contract’s terms. Our audit scope included about $37.6 million in costs paid from December 23, 2020, through January 31, 2024. In summary, we determined BFI (1) overbilled TVA $459,356 in fuel charges and (2) did not perform a true up of performance bond costs billed to actual performance bond costs, resulting in $96,072 owed to TVA. In addition, we noted some opportunities to improve contract administration by TVA. Specifically, we determined (1) TVA approved BFI to bill $427,654 in costs that were not provided for in the pricing terms or work scope of the contract, and (2) TVA’s request for BFI to increase its workload and then subsequently reducing the number of operating hours resulted in a $3 increase to the per ton disposal rate and could cost TVA $9.07 million through the life of the contract.