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Brought to you by the Council of the Inspectors General on Integrity and Efficiency
Federal Reports
Report Date
Agency Reviewed / Investigated
Report Title
Type
Location
Tennessee Valley Authority
Distributor Audit of Warren Rural Electric Cooperative Corporation
The OIG audited Warren Rural Electric Cooperative Corporation's (WRECC) compliance with its power contract with TVA. WRECC is a power distributor based in Bowling Green, Kentucky. For fiscal year 2010, WRECC provided power to approximately 60,000 customers that resulted in revenues of approximately $157 million. WRECC also owns and/or operates nonelectric businesses including a security system and monitoring service division, a propane sales subsidiary, and a natural gas distribution subsidiary, and partially owns a nonelectric bill processing company. In addition, WRECC provides billing services for a water utility.Our audit found WRECC was generally in compliance with the contract provisions for proper reporting of electric sales and nondiscrimination in providing power. However, we noted instances of noncompliance with other provisions of the power contract. The most important instances were related to use of electric revenues. Other areas for improvement in contract compliance were noted regarding co-mingling of electric and nonelectric funds, customer classification, and metering. We also identified one area where TVA's oversight of the distributor should be enhanced. This issue, regarding the lack of a current joint cost study, has been reported in previous OIG distributor audit reports.WRECC and TVA management generally agreed with our recommendations and have taken or are taking corrective actions, except for our recommendation to create an independent general ledger and corresponding accounts for the security system and monitoring service division. The target completion date for all corrective actions is May 2012.
Marshall Miller & Associates, Inc. (Marshall Miller) was hired by the Office of Inspector General (OIG) to review the sampling and monitoring plans prepared by the Tennessee Valley Authority (TVA) for its Kingston Fossil Plant located in Harriman, Tennessee, following an ash release that occurred on December 22, 2008. Marshall Miller evaluated the adequacy and completeness of TVA's environmental recovery plans to determine whether these plans provide comprehensive and effective measures to adequately monitor the potential short- and long-term impacts to human and ecological receptors. The scope of the review included TVA's environmental recovery plans available through June 2010. In summary, Marshall Miller found no significant deficiencies in the plans or procedures used by TVA or its contractors in characterizing impacts resulting from the ash release or recovery efforts. It should be noted that the assessment of long-term impacts will be an ongoing process during and after the recovery effort.While Marshall Miller did not find any significant deficiencies, early in the recovery process some of the analytical results did not pass prescribed quality assurance/quality control standards, and the data were invalidated. When the deficiency was noted, TVA took appropriate steps to correct the situation, and it does not appear that any decisions regarding the clean-up efforts were affected by the data quality.Marshall Miller noted the following:Bureau Veritas Laboratories used an incorrect analytical method for particulate monitoring from September 2009 to January 2010. This resulted in the Environmental Protection Agency invalidating the Particulate Matter data.There has been limited research on how the ash and the metals associated with ash will affect the various organisms in the river system. Additional investigations by a variety of research organizations are underway, primarily in support of the River System Engineering Evaluation/Cost Assessment.Data from air testing for metals and groundwater testing are not readily available to the public.Due to "legacy" contaminants in the sediment in the lower 1.8 miles of the Emory River (associated with activities at the Oak Ridge National Laboratory) and the difficulty in removing the ash without distributing existing "legacy" and native river sediments, some ash will remain in the river after dredging is complete.TVA management provided additional information on the findings and recommendations in this report. Marshall Miller incorporated TVA management's comments into the report as appropriate and provided additional comments where needed. TVA agreed with Marshall Miller's recommendations and has taken or plans to take action based on the recommendations.
Agreed-Upon Procedures for Corporation for National and Community Service Grants Awarded to Alabama Governor's Office of Faith Based and Community Initiatives