Baker's Construction Services, Inc. - Contract No. 14743

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by Baker's Construction Services, Inc. (BCS) for field labor support services provided for TVA's civil construction organization under Contract No. 14743. Our audit objective was to determine if costs were billed in compliance with the contract's terms. Our audit scope included about $19.26 million in costs billed to TVA from January 1, 2020, through August 31, 2021.In summary, we determined BCS billed TVA:From $116,763 to $421,683 in unapproved temporary living allowance (TLA) costs. In addition, we identified other areas where the administration of TLA and TLA certifications could be improved.$44,941 in other ineligible and unsupported costs, including (1) $21,582 for ineligible and unapproved subcontractor costs, (2) $11,269 for ineligible equipment costs, <br> (3) $8,845 for duplicate and ineligible material costs, and (4) $3,245 for unsupported noncraft labor costs. We also noted opportunities to improve contract administration by TVA. Specifically, (1) the contract contained inconsistent language related to compensating noncraft labor, and <br> (2) several invoice and payment errors resulted in incorrect payments by TVA, which could have been identified with a proper invoice review.(Summary Only)