Federal Reports

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements

During a prior review of how TVA organizations assess the condition of its assets, we learned that asset condition assessments done by the Fossil Power Group (FPG) determined some generation assets were in poor condition. As a follow up to this prior work, we initiated a review to determine whether TVA was taking actions to address FPG systems and programs with poor ratings.We found actions were taken to address some programs and systems with poor health. We identified that 785 out of 1,617 programs and systems within FPG had been rated red or yellow and randomly selected 35 programs and systems for detailed review. Actions taken by FPG to address the poor health resulted in an improvement in color rating or overall health of 17 programs and systems. However, there was no upgraded rating or improvement in system health for 18 systems. Of these 18 systems, 7 had no actions completed, while 11 had some actions completed without improvement in system health. The major reason cited for not completing actions was lack of funding.We also found system health reports were not completed or documented and required program health reports could not be provided. Additionally, FPG-SPP-09.045, Performance of Engineering Programs, and FPG-SPP-09.030.03, System Health Reports, were superseded by engineering guidance documents which have no requirements, only recommendations. This may increase the number of health reports not completed or not completed in a timely manner. The absence of accurate and timely equipment health reports could make it more difficult for TVA to effectively manage equipment reliability risk.We recommended the Senior Vice President, Power Operations, (1) document justification when actions are not taken to address systems and programs with red and yellow ratings, (2) reinforce the importance of consistent documentation of system health reports, and (3) consider the potential impact of eliminating the requirement to do asset health assessments on TVA's non-nuclear asset condition risk and determine a schedule for completing health assessments that will mitigate the risk of equipment failure TVA management responded they will incorporate our feedback into their review effort to have a consistent approach to system health with appropriate documentation.