Federal Reports

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

We audited the costs invoiced by a contractor for retroactive rate adjustments and determined the adjustments were overstated by about $12,000 due to miscellaneous billing errors. The contractor agreed with our findings. Summary Only

We reviewed TVA's contracting process and noted several areas where improvements could result in better contract management and greater contractor compliance with commercial terms and conditions. Although we noted many instances of good practices being performed by various individuals in Procurement and TVA's Strategic Business Units, these practices were not universal. Overall, we noted (1) deficiencies in 40 percent of the 64 contracts reviewed; (2) technical contract managers were approving payments without adequately reviewing pricing on 25 percent of the invoices reviewed; and (3) internal controls were not always followed. Additionally, we surveyed Procurement's contract managers and purchasing agents and a representative sample of TVA's technical contract managers to ask for their input regarding weaknesses and areas of improvement in the contracting process. The survey results were most negative in areas concerning (1) training, (2) workload, and (3) communications. TVA management instituted several initiatives to address most of the issues identified in the report. Summary Only

We audited $3.2 million of costs billed to TVA by a contractor for welding services performed at Browns Ferry and Sequoyah Nuclear Plants by one of its subcontractors and determined TVA had been billed $450,165 for unsupported and ineligible costs. The overbilling included (1) per diem payments that exceeded limitations or were ineligible under the contract, (2) ineligible mobilization/demobilization and travel expenses, (3) unsupported small tools and consumable costs, (4) labor costs that were either unsupported or billed at incorrect rates, and (5) unsupported subcontractor costs. TVA management is reviewing our findings and recommendations. Summary Only

We audited $32.7 million of costs billed to TVA by a contractor providing reload fuel fabrication services for Browns Ferry Nuclear Plant and determined TVA had been overbilled $5,545 due to the contractor's use of overstated hours and incorrect labor rates. Additionally, the contract did not have a formal authorization process for certain services to be performed by the contractor and the contractor could not provide documentation of TVA's authorization for some of the services it had billed TVA. The contractor agreed to credit TVA for the overbilled amount. TVA management agreed with our findings and is (1) reconciling the deliverables it received with the compensation paid for the services in question and (2) issuing a contract supplement to confirm how work will be released under the contract. Summary Only

We determined a TVA contractor providing nuclear security services was incurring a high level of overtime due to work schedules and headcount limitations. The headcount limitations had resulted in TVA paying $1.84 million in extra labor costs during 2004 and 2005. We estimated if the trend continued TVA would pay an extra $3.5 million over the planned three-year remaining term of the contract. TVA management stated they had reviewed the contractor's staffing levels and determined additional full-time positions were needed to man the security posts. Also management stated they had taken action regarding the contractor's security manning requirements and shift scheduling that will reduce overtime to acceptable levels. Summary Only

At the request of TVA Occupational Health and Workers' Compensation, we performed a limited scope review to assess whether policies, procedures, and key control activities ensure compliance with TVA's Prescription Safety Eyewear Program requirements. In summary, we determined TVA's policies and procedures adequately address the eligibility requirements and process to be followed in order to obtain prescription safety eyewear. However:Policies and procedures regarding prescription safety eyewear (1) do not address the retention of supporting documentation for purchases of prescription safety eyewear and (2) are not being complied with by all the Safety Eyewear Coordinators. Policies and procedures could be strengthened to clearly identify the time frame constraints for obtaining replacement eyewear. Current identifiers used for employees are not unique to a single employee. TVA management agreed with our findings and recommendations and has taken or plans to take corrective action.