Federal Reports

We audited $22.1 million of costs paid by TVA to a contractor for construction and modification services at TVA facilities. In summary, we foundAn estimated $20.8 million billed by the contractor for craft augmentation labor using hourly billing rates was inflated by approximately $619,000 because the contractor's billing rates included (a) overstated payroll tax costs and (b) calculation errors; andThe contractor billed TVA $25,658 for subcontract services it had not incurred. We recommended TVA management recover the inflated and overbilled costs and take steps to ensure the contractor's billing rates for craft augmentation labor are reasonable based on the company's actual costs. 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, 2007. The required information on TVA's renewable energy initiative, "Green Power Switch," was provided to CRS. No exceptions were identified. Summary Only

ED OIG Semiannual Report 56 Final 508

EAC OIG audited $19.3 million in funds received by the New Mexico Secretary of State under the Help America Vote Act. The objectives of the audit were to determine whether the Secretary of State (1) expended HAVA payments in accordance with the Act and related administrative requirements and (2) complied with the HAVA requirements for establishing an election fund, meeting its matching share requirement, and maintaining state expenditures for elections at a level not less than the level expended in fiscal year 2000.

We determined that TCI met requirements in the HEA and regulations for institutional (excluding the 90/10 rule), program, and student eligibility and for award calculations. However, our review disclosed that (1) TCI improperly paid $440,487 to FFEL lenders to pay off its students’ loans and prevent their default; and (2) TCI had internal control deficiencies in the administration of Title IV programs during the period under review.

We reviewed $14.2 million of costs billed to TVA by a contractor for providing right-of-way clearing and restoration services and found:TVA had been overbilled $81,533 including (a) $38,796 in unallowable miscellaneous material costs, (b) $34,776 in duplicate billings for initial clearing costs, and (c) $7,961 in unsupported labor costs. Additionally, we found the contractor had underbilled TVA $5,776 due to various invoicing errors. The contractor agreed with our finding regarding unsupported labor costs and provided explanations for why it believed the remaining items were billed correctly. TVA management agreed with the findings regarding unallowable material costs, unsupported labor costs, and underbilled costs and stated they are conducting a review of the $34,776 in suspected duplicate billings for initial clearing services. Prior to award of the contract, Procurement's contract manager had requested the contractor to change its proposed billing rates to "TVA Valley-wide" rates. That action, which the contractor agreed to, caused TVA's costs to increase $522,212 because most of the rates that had been proposed by the contractor were lower than TVA Valley-wide rates. Procurement informed us that TVA had deployed a strategy to negotiate consistent pricing among all suppliers and that would be more favorable to TVA. Procurement further stated that although some of the prices were higher than the contractor's initial offer, lower prices were achieved in four areas (line items) where TVA expected the majority of the expenditures to take place; however, since the actual quantities of work performed under the various line items were other than anticipated, the resulting charges increased TVA's total cost by approximately 3.7 percent. Procurement plans to use this experience in some lessons-learned sessions. Summary Only