Federal Reports

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $38.1 million in funds received by the Kentucky State Board of Elections under the Help America Vote Act. The objectives of the audit were to determine whether the state Board of Elections (1) used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with HAVA and applicable requirements; (2) Accurately and properly accounted for property purchased with HAVA payments and for program income; and (3) met HAVA requirements for Section 251 funds for an election fund, for a matching contribution, and for maintenance of a base level of state outlays.

TVA's successful effort to restart Unit 1 at Browns Ferry Nuclear Plant (BFN) provides an opportunity to transfer knowledge to future generation projects to (1) improve project oversight, (2) improve project efficiency and effectiveness, (3) generate cost savings opportunities, and/or (4) reduce TVA's risk of fraud, waste, and abuse. OIG reviews of the BFN Unit 1 Restart project and TVA management's evaluations of the restart activities identified opportunities for improvement in future generation projects. Specifically: The OIG conducted reviews throughout the course of the project focusing on (1) payment of overheads and direct expenses, (2) craft time labor reporting, (3) equipment and tools controls, (4) inventory management and accounting, (5) the restart incentive program, and (6) contract compliance.TVA management identified areas they felt were "hard spots" during the project and developed key project control activities to avoid these issues in the future. Some "hard spots" identified related to (1) staffing and training, (2) self-assessments, (3) development of a comprehensive plan, (4) turnover, and (5) material and equipment availability.

We reviewed control activities and the scale certification process applicable to TVA coal shipments at Calvert City Terminal (CCT). We found the terminal had controls and processes in place for the receiving, blending, weighing, and loading of the coal it handles for TVA. The terminal also appeared to have adhered to the scale certification requirements prescribed by the TVA contract. However, we:Identified one barge shipment where terminal documentation showed the barge being sent to the TVA Colbert Fossil Plant (COF). According to TVA Fuel Supply (FS) personnel, the barge sank in August 2006, en route to COF. As of August10, 2007, FS had not recovered the loss.Found discrepancies with some barge and train shipments that apparently resulted from keying errors on the part of TVA and CCT personnel. This included six train shipments recorded in FuelWorx as received at the wrong terminal. Management generally agreed with our findings and recommendations and is taking or plans to take corrective action.

We reviewed 42 loans initiated through Economic Development's (ED) four loan programs (Economic Development Loan Fund, Minority Business Development Loan Fund, Business Incubator Loan Fund, and Special Opportunity Counties Loan Fund) and found:Management had not fully implemented procedures governing the loan administrative process after closing, as agreed upon in response to Audit2004-011F.Noncompliance with ED loan guidelines in 13 of 42 loan files reviewed.Uncollectible ED loans were not written off in a timely manner as required by generally accepted accounting principles.Explanations provided by ED management for 10 of the 13 loan files where noncompliance was noted indicated the Loan Approval Committee made exceptions and approved loan applications even though they were not in compliance with program guidelines. Of these ten loans, five were identified as being in default status indicating that departure from guidelines could have potentially contributed to the loan defaults. Our review noted no other specific trends in the loan files that appeared to contribute to loan defaults. At ED's request, we reviewed ED's draft Loan Manual and identified improvement opportunities. Management generally agreed with our findings and recommendations and is taking or plans to take corrective action.

To obtain further information, please contact the OIG Office of Counsel at OIGCounsel@oig.treas.gov, (202) 927-0650, or by mail at Office of Treasury Inspector General, 1500 Pennsylvania Avenue, Washington DC 20220.

We conducted a review of 52 TVA non-compete contracts to determine whether non-competed contracts are issued and administered in compliance with TVA policies and procedures, including assessing the justification for the non-competed contract award. We found: Two contracts could not initially be located for review and seven did not have Form17388 and/or the appropriate notification/approval required by TVA policies and procedures. Form17388 is required with the appropriate signatures and justification for the contract. Three of the contracts reviewed did not appear to have an appropriate justification as outlined in Section9(b) of the TVA Act and INSTRUCTION1, Business Practice9, Implementing Procedures. Multiple contracts not governed by BP9 are classified under a justification in PassPort that does not apply to the contract. Management generally agreed with our findings and recommendations and is taking or plans to take corrective action.