Review of Coal Quality Adjustment Reports

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. In addition, we tested the accuracy and compliance with contract terms of 35 CQARs where adjustments were less than $1 million, totaling $16,285,302. In summary, we found the CQARs were calculated accurately and in accordance with contract terms. Summary Only