Federal Reports

TVA began hedging natural gas prices in April 2022 under the reinstated Financial Hedging Program (FHP). The program’s stated objectives are to reduce fuel rate volatility and balance operational and financial risks. From its reinstatement in April 2022 through February 2025, TVA’s FHP experienced losses of approximately $645 million.  We performed an audit of the FHP due to the financial risks associated with hedging. Our audit objective was to determine if TVA’s FHP is achieving its objectives of reducing fuel rate volatility and balancing operational and financial risks.

We determined the FHP achieved its objective of reducing fuel rate volatility between April 2022 and February 2025.  Over the 35-month period, fuel rate volatility was reduced by an average of about 3.5 percent.  However, we were unable to determine if TVA met its objective of balancing financial and operational risks because the objective is unclear and TVA has not defined parameters to define successful achievement of the objective. 

Although the fuel rate volatility was reduced over the entire time frame, the FHP resulted in (1) approximately $645 million in losses that were passed on to TVA’s customers and (2) a 2 percent increase in fuel rate volatility in fiscal year 2024.  We also found TVA had not performed the required back testing to measure volatility reduction and the effectiveness of the FHP.  At our request, TVA performed the back testing that showed the program had reduced fuel rate volatility. 

Additionally, we identified an opportunity for TVA to improve the information provided to the TVA Board, Tennessee Valley Public Power Association, and Tennessee Valley Industrial Committee related to FHP fuel rate volatility and FHP gains/losses.

As directed under the MISSION Act, VA created clinical resource hubs to improve healthcare access for veterans in underserved areas. The hubs backstop medical facilities in each regional Veterans Integrated Service Network (VISN) that do not have enough clinical staff due to attrition, recruiting difficulties, or growth in the veteran population. Hub physicians see most patients virtually. Encounters increased from almost 482,000 in fiscal year (FY) 2021 to about 1.2 million in FY 2024.

The OIG team found that despite the increase in patient encounters, physicians in some hub primary care and specialty group practices—such as cardiologists, dermatologists, and psychiatrists and psychologists—generally did not appear to meet established minimum productivity thresholds. The apparent failure to meet these thresholds may have been caused by gaps and inaccuracies in the data used to measure productivity. The available data did not consistently give physicians credit for work documented at a spoke site (where a veteran presents for care), recognizing only work documented at the facility to which the hub physician’s labor is mapped. Moreover, VHA lacked formal guidance on how hubs should measure and monitor specialty physician productivity. Hub officials simply relied on indicators like the number of patient encounters and veterans served, instead of using standardized productivity metrics that factor in the complexity of each visit. The lack of guidance also prevented VHA from identifying and remediating underperforming hub services.

The OIG recommended VHA improve data, issue guidance on which productivity measures apply to hub physicians, and clarify who should monitor productivity and take corrective action when targets are not met. These steps will help VHA evaluate whether the ever-increasing investment in hubs is justified and the number of veterans served is optimized. VHA agreed with the recommendations.

Our Objective(s)
To assess the Maritime Administration's (MARAD) actions to address the 24 recommendations from National Academy of Public Administration's (NAPA) 2021 report specified by Congress. Specifically, we assessed MARAD's progress in addressing the 24 specified recommendations and identified challenges to fully addressing them.

Why This Audit
The National Defense Authorization Act (NDAA) for Fiscal Year 2020 directed the Secretary of Transportation to enter into agreement with NAPA to conduct an independent, comprehensive assessment of U.S. Merchant Marine Academy (USMMA or Academy). The NDAA for fiscal year 2023 required us to assess MARAD's actions to address 24 of the 67 recommendations in NAPA's 2021 report.

What We Found
MARAD made progress on 21 of the 24 NAPA recommendations subject to OIG review before terminating actions on 5 due to an Executive Order.
The recommendations were in areas such as USMMA's facilities and infrastructure, institutional culture and learning environment, and sexual assault prevention and response policies and program.
The Agency completed two and partially completed five of eight recommendations to improve Academy facilities and infrastructure.
MARAD also partially completed 9 of 10 recommendations related to improving the Academy's institutional culture before terminating actions on 5 of these recommendations due to an Executive Order.
MARAD completed one and partially completed four of six recommendations on the Academy's Sexual Assault Prevention and Response Program and policies.

Funding, staffing, and management challenges impacted MARAD's ability to fully address the recommendations.
For example, USMMA staff and officials described plans to develop or identify specific metrics required by some recommendations, but none of these metrics had been established in part because funding requested for assistance in this area has not been enacted.
In addition, MARAD had not designated a senior official with the authority to hold the various offices accountable, hindering collaboration among DOT, MARAD, and USMMA, which all had responsibilities for addressing recommendations.

Recommendations
We made 1 recommendation to facilitate MARAD's progress addressing NAPA recommendations.