Review of TVA Coal Supplier Contracts

We conducted three reviews to determine whether the coal supplier was in compliance with weighing, sampling, and shipping provisions of the respective contract. We performed tests to verify that shipment weight and coal test results documentation maintained at each mine supported the amounts used to (1) invoice TVA for tonnage shipped and (2) calculate coal-quality adjustments. In summary, our reviews found documentation maintained at the respective mine for ten randomly selected shipments agreed with the information provided to TVA regarding tons shipped and coal-quality test results. Each supplier was also found to be in general compliance with the weighing, sampling, and shipping provisions in the contract and/or applicable standards. However, we also found some control improvement opportunities. TVA management generally agreed with our findings and recommendations and has taken or plans to take corrective action. Summary Only