TVA Tritium Program Under DOE/TVA Interagency Agreement DE-A102-00DP00315

We reviewed TVA cost recovery for tritium production under Interagency Agreement DE-A102-00DP00315 with the Department of Energy (DOE). The audit covered the period from January 2000 through December 2009 with some scope restrictions due to incomplete accounting data. We were unable to determine if tritium production costs were accurately identified and invoiced or if any negative impacts on plant operation from tritium production were reimbursed by DOE due to inadequate documentation. Specifically, Nuclear Power Group (NPG) management: (1) had incomplete accounting data, (2) negotiated rates that did not accurately reflect NPG's anticipated costs, (3) did not address $9 million in under-recovered overhead identified in the previous Office of the Inspector General audit on the tritium agreement, (4) did not invoice standby payments and overhead in compliance with agreement terms, (5) did not identify all additional operating costs caused by tritium production, (6) did not have support for $22.9 million in expenses and an unknown amount of revenues, and (7) misclassified revenue. Possible consequences of the audit findings include noncompliance with the Economy Act, noncompliance with the TVA Act resulting in rate-payer subsidy of tritium production, and unreliable NPG financial/performance data.