Federal Reports

At the request of the Chief Executive Officer, we initiated a review of records retention policies and practices at TVA. The objectives of our review were to determine (1) whether records are being maintained in accordance with TVA policies and procedures and (2) if opportunities exist to improve records retention and disposal activities in light of office space consolidation initiatives. Our review found TVA complied with TVA records management policies, practices, and procedures, and records identified in sampling were generally maintained in accordance with the National Archives and Records Administration-approved record schedules. We did note some areas where compliance could be strengthened.In addition, while we found that TVA plans to replace its current electronic management system which should increase the efficiency and effectiveness of records management, areas for improvement exist in the Chattanooga Office Complex pertaining to (1) records management, (2) records retention, (3) disposal of records and material, (4) the maintenance and upkeep of office space, and (5) the identification of records. Summary Only

We completed agreed-upon procedures to assist the Center for Resource Solutions (CRS) in determining TVA's compliance with the annual reporting requirements of CRS' Green Pricing Accreditation Program for the year ended December 31, 2009. The required information on TVA's renewable energy initiative, "Green Power Switch," was provided to CRS. Summary Only

ED OIG Semiannual Report 60 Final 508

We audited $61.92 million in costs billed to TVA by a contractor, under two contracts for performing engineering services between October 2004 and December 2008 and found TVA had been overbilled $683,122 as follows:TVA was overbilled $70,838 because labor costs were billed using hourly billing rates instead of cost reimbursable payment terms as required by the contracts.TVA was billed $558,463 in ineligible and excessive temporary living costs because (1) short-term daily travel rates were paid to employees instead of (lower) long-term temporary living allowances, and (2) unauthorized local mileage costs were paid to personnel receiving temporary living allowances.TVA was overbilled an estimated $40,034 in travel costs due to (1) overstated mileage reimbursement rates, (2) meal costs for unidentified personnel, (3) unallowable rental car expenses, and (4) daily travel costs in excess of daily limits.TVA was overbilled $13,787 because (1) an ineligible markup was added to certain subcontractor costs, and (2) an incorrect billing rate for other direct costs was used.The contractor (via a response submitted by an outside law firm) generally disagreed with most of the audit findings and stated its billings to TVA were correct, fair, reasonable, and in accordance with the plain language of the contracts, the contract manager's interpretation of ambiguous language and/or based upon the parties' pattern and practice of contract performance under both contracts. However, in our opinion, the contractor's comments did not provide additional evidence or documentation to support its claims that TVA had been billed in accordance with the terms of the subject contracts. Accordingly, we recommended TVA management take action to recover $683,122 of overbilled and excessive costs from the contractor. Summary Only