Federal Reports

At the request of TVA Nuclear (TVAN), we reviewed Stone and Webster Engineering Corporations' (SWEC) craft labor time reporting associated with the October 2005 Unit 1 Restart craft labor switch to five eight-hour straight-time work schedules. In 2005, TVA and the Tennessee Valley Trades and Labor Council modified their memorandum of understanding, including Attachment A, Mandatory ? Eight/Ten Straight-Time Attendance Agreement (LRS-54). The change was made to increase productivity (e.g., to curtail absenteeism and tardiness). To comply, SWEC switched to five eight-hour days straight-time work schedules in October of 2005. SWEC developed the following key control activities to ensure compliance with LRS-54.The AnalyzeTime application evaluates payroll data to identify inconsistencies and potential errors in time calculations. Timesheets, which support payroll payments, are prepared and signed by a foreman and then approved by an applicable supervisor. Gate-log reports are available to identify time reporting variances for employees working inside the secured area. We determined (1) the AnalyzeTime application is working as intended, (2) over 99 percent of timesheets reviewed contained all required signatures, and (3) gate-log reviews are being conducted; however, these reviews provide only limited information for monitoring. We also noted that:Absences are not tracked when an employee is temporarily assigned to another unit. No process exists to ensure that excused absences are monitored to identify potential abuse.

EAC OIG reviewed $77.3 million in funds received by the Georgia Secretary of State under the Help America Vote Act. The objective of the review was to determine whether Georgia (1) managed HAVA funds in accordance with the Uniform Administrative Requirements for Grants and Cooperative Agreements with State and Local Governments (the Common Rule) and the Cost Principles for State, Local and Indian Tribal Governments (Office of Management and Budget Circular A-87) and (2) complied with HAVA requirements for maintaining the election fund and sustaining the State's level of expenditures for elections.

FLRA Inspector General FY 2006 Evaluation of FLRA’s Compliance with the Federal Information Security Management Act of 2002

KPMG LLP, the auditor under contract having performed the audit of the United States Mint’s Fiscal Year 2005 Financial Statements, has withdrawn its opinion on the financial statements as a result of subsequent discovery of material errors. Accordingly, the previously issued independent auditors' report and management letter associated with the financial statements have been removed from the OIG websiteand Oversight.gov): Audit of the United States Mint's Fiscal Year 2005 Financial Statements, report number OIG‐06‐031, dated June 28, 2006 (RECALLED BY AUDITORS)

We conducted a review to assess the TVA role as rate regulator over municipal utilities and cooperatives (collectively "distributors") which purchase TVA power. The TVA Act imposes only one regulatory requirement, prohibiting discrimination between consumers of the same class. The TVA Act, however, also gives the Board authority to include terms and conditions in power contracts as needed to carry out the purposes of the Act, which include keeping rates as low as feasible. Pursuant to this authority, most power contracts include, in addition to the required nondiscriminatory provision, terms and conditions related to resale rates, use of revenues, and financial and accounting requirements. In summary, we determined the following:TVA is in a unique position as both a seller of electric power and a regulator over the rates charged by many of its customers. We believe there is an increasing inherent conflict in TVA serving as a regulator while working to ensure good customer relations. TVA routinely reviews and approves resale rates and use of funds for nonelectric system purposes. We determined TVA should develop additional guidelines to assist in their reviews. Thirteen distributors used electric system funds for nonelectric purposes, while the joint use agreements may not have been modified to permit such use. TVA management agreed with our recommendations, and we concur with their planned actions.

We performed a limited scope review to determine if claims are being adjudicated in accordance with the provisions of the TVA Dental Benefit Plan. While the majority of claims reviewed were adjudicated properly, we did identify an adjudication error associated with charges for preventive services. TVA Employee Benefits had also discovered the error and subsequently addressed the issue. The dental claim administrator had reimbursed TVA in the amount of $5,353.22 and reimbursement for 16 additional charges identified by our review was pending. Summary Only