Federal Reports

Report on Internal Control

Report on Compliance with Laws and Regulations

This report details KPMG’s findings of its audit of financial statements from the Office of the Special Trustee for American Indians (OST) for fiscal years 2018 and 2017. The OST financial reports contain financial statements and notes for Tribal and Other Trust Funds (Tribal) and Individual Indian Monies Trust Funds (IIM).KPMG issued a qualified opinion, consistent with prior years, on the Tribal financial statements because it was unable to satisfy itself as to the fairness of trust fund balances. KPMG issued an unmodified opinion on the IIM financial statements.

This report presents the results of the audit of Commodity Credit Corporation’s (CCC) financial statements for the fiscal year ending September 30, 2018. The report contains an unmodified opinion on the financial statements, as well as an assessment of CCC’s internal controls over financial reporting and compliance with laws and regulations.KPMG LLP, an independent certified public accounting firm, conducted the audit. In connection with the contract, we reviewed KPMG LLP’s report and related documentation and inquired of its representatives.

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for civil projects and coal combustion residual program management work at TVA's steam electric power plants. Our examination objective was to determine if the company's cost proposal was fairly stated for a planned <br> $25 million contract.In our opinion, the company's cost proposal was overstated. Specifically, we found the company's proposed costs for a Cumberland Fossil Plant (CUF) project and proposed unit rates for a Bull Run Fossil Plant (BRF) project included overstated (1) material costs, (2) general and administrative (G&A) rates, (3) labor costs, (4) equipment costs, and (5) temporary living allowance (TLA) costs. In addition, the company included a fee rate for the CUF project that exceeded the maximum allowable fee rate in TVA's request for proposal. We also found the company's proposed rate attachments included (1) incorrect craft labor rates, (2) incorrect application of the markup rates, and (3) noncraft wage ranges that did not reflect the company's current wage ranges. In addition, the company's proposal did not include (1) separate labor rate attachments for nonmanual employees who receive union benefits and (2) three noncraft labor categories that were included in the CUF and BRF proposals.We estimated TVA could avoid about $1.66 million on the planned $25 million contract by (1) negotiating appropriate reductions to material costs, G&A rates, labor costs, equipment costs, and TLA costs; (2) limiting the company's fee rate on the CUF project to the RFP's maximum allowable rate; and (3) negotiating appropriate reductions to unit rates in the BRF proposal. In addition, we suggest TVA negotiate revisions to the company's contract rate attachments to correct errors and more accurately reflect the company's actual wage ranges and costs.(Summary Only)