Federal Reports

The OIG audited the subcontracting process used by URS Energy & Construction, Inc. (URS), under contract numbers 66777 and 72142. Under the contracts, URS was to provide design, engineering, procurement, delivery, installation, and construction management services for TVA's (1) combined cycle combustion turbine or simple cycle combustion turbine projects and (2) various equipment for selective catalytic reduction and dry flue gas desulfurization precipitators. Our audit included subcontracts and related change orders for $256.3 million in subcontractor costs URS billed to TVA from December 14, 2007, to June 27, 2012.In summary, we determined URS (1) did not obtain TVA approval for some subcontracts and circumvented requirements for TVA approval, and (2) overbilled TVA $168,623 in the markup costs applied to costs for services and equipment provided by TVA under subcontracting agreements. Summary Only

This report was withdrawn, revised, and reissued as OIG-SBLF-14-002R on June 26, 2015, to reflect changes made on pages 2, 13, and 14 of the report. The changes clarified the amount of administrative costs that were reviewed by the Office of Inspector General as part of a sample. The corrections did not affect the findings, conclusions, and recommendations as reported.

The OIG evaluated the adequacy of actions taken to mitigate combustible coal dust at TVA coal plants. Despite some improvements in combustible dust management, we determined actions taken to date were inadequate in improving deteriorating equipment conditions, addressing housekeeping challenges, and providing appropriate monitoring of combustible dust conditions at the coal plants.Although the probability of occurrence for coal dust explosions was rated by TVA in the Enterprise Risk Management risk map as unlikely, the potential consequences of an explosion could be severe and result in disruption of generating capacity, costly clean up and repairs, and even loss of life.We found coal plant and coal handling conditions exceeded acceptable dust level limits specified in TVA Safety Procedure (TSP) 816. Specifically, we observed coal dust accumulations that exceeded the 1/32 inch standard in many of the coal handling areas during walkdowns at the Bull Run, Cumberland, and Paradise fossil plants. Additionally, TVA self-identified coal dust accumulations that were above the allowable standard in many areas throughout the coal fleet. We also found monitoring tools required by the program were not being used consistently to improve plant conditions.Site assessment reports performed by yard systems engineers indicated some conditions improved between 2010 and 2012. Some equipment deficiencies were being addressed, and there were several programmatic practices in progress that were expected to improve conditions over time. However, equipment has deteriorated faster than funding has been available for repairs or replacements. Deficiencies resulting from inadequate equipment maintenance contribute to the increased presence of combustible coal dust and coal accumulations within the coal handling system. With deteriorating equipment and recent staff reductions for housekeeping, TVA faces significant challenges in keeping coal dust accumulations within the limits specified in TSP 816. More focus is needed on the program in order to better contain coal dust and reduce the necessity for extensive and repeated housekeeping activities to achieve dust accumulations below the 1/32 inch standard.TVA management generally agreed with our recommendations and has taken or is taking actions to address the findings.

Our FY 2013 FISMA review found that the Department had made progress in remediating issues identified in previous FISMA reviews. Specifically, it complied with 4 of the 11 reporting metrics: continuous monitoring, plan of action and milestones, contractor systems, and security capital planning. However, we found deficiencies with the remaining seven reporting metrics—configuration management, identity and access management, incident response and reporting, risk management, security training, remote access management, and contingency planning—many of which were repeat or modified findings from OIG reports issued over the last several years. Without adequate management, operational, and technical security controls in place, the Department’s systems and information are vulnerable to attacks that could lead to a loss of confidentiality and to a loss of integrity resulting from data modification or limited availability of systems. In addition to reiterating recommendations made in our FY 2012 FISMA report, we made 23 new recommendations to help the Department establish and sustain an effective information security program that complies with FISMA, Office of Management and Budget, and National Institute of Science and Technology requirements.