Federal Reports

We determined that approximately 95 percent of the items selected for review from items in BLN's construction inventory records pertaining to 213 commodities were actually warehoused at BLN. We also noted that the sales price of the inventory will likely be less than the original purchase cost due to the condition of the materials. This report was issued to management for informational purposes only.

We identified no instance where PricewaterhouseCoopers LLP did not comply in all material respects with Government Auditing Standards in its review of TVA's interim financial information for the first quarter of FY 2006.

As a result of our review of the procedures and key control activities used to track and account for tools at Browns Ferry Nuclear Plant (Inspection No. 2005-526I), we performed an inspection to asses the processes and key control activities used to track and account for tools at WBN. TVA Nuclear (TVAN) Business Practice 226 (BP-226), Tool and Equipment Accountability, dated August 27, 2000:<br><br>Established and implemented a plant accountability system for tools and equipment. Strengthened and standardized existing tool and equipment accountability practices. Provided for periodic reporting to control and minimize equipment losses. Our inspection found a significant lack of tool accountability/tracking resulting from (1) noncompliance with processes and key control activities prescribed by TVAN BP-226, and (2) other process/control weaknesses. Management agreed with our findings and has initiated corrective actions.