Federal Reports

The OIG performed an audit of Newport Utilities, a distributor for Tennessee Valley Authority (TVA) power based in Newport, Tennessee. Newport Utilities also operates nonelectric businesses, which are water and sewer utilities. Annual revenues from electric sales were approximately $50 million in fiscal year 2009. The objective of the audit was to determine compliance with key provisions of the power contract between TVA and Newport.Our audit identified customer classification issues that could impact the proper reporting of electric sales to TVA and/or nondiscrimination in providing power to members of the same rate class. We were unable to estimate the monetary effect of the classification issues because, in some instances, information was not available; however, for those where information was available, the monetary effect on the distributor and TVA would not be significant.We also found improvements were needed to (1) comply with other contract provisions regarding maintenance of customer contracts and (2) improve the distributor's internal controls related to the implementation of a corrected program code. In addition, we found the distributor had enough cash on hand to provide a cash reserve equivalent to a cash ratio of about 8 percent, which is within TVA's established guidelines for an adequate cash ratio of 5 to 8 percent.TVA and the distributor generally agreed with the OIG's recommendations and have taken or are taking actions to correct the identified issues.

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $16.6 million in funds received by the Hawaii Office of Elections under the Help America Vote Act. The objectives of the audit were to determine whether the Office of Elections (1) used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with HAVA and applicable requirements; (2) accurately and properly accounted for property purchased with HAVA payments and for program income; and (3) met HAVA requirements for Section 251 funds for an election fund and for a matching contribution.

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $40.9 million in funds received by the Alabama Secretary of State under the Help America Vote Act. The objectives of the audit were to determine whether the Secretary of State (1) used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with HAVA and applicable requirements; (2) accurately and properly accounted for property purchased with HAVA payments and for program income; and (3) met HAVA requirements for Section 251 funds for an election fund and for a matching contribution.

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $49.1 million in funds received by the Louisiana Secretary of State under the Help America Vote Act. The objectives of the audit were to determine whether the Secretary of State (1) used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with HAVA and applicable requirements; (2) accurately and properly accounted for property purchased with HAVA payments and for program income; and (3) met HAVA requirements for Section 251 funds for an election fund and for a matching contribution.