Federal Reports

We found that OESE did not close audits timely and did not adequately maintain documentation of audit followup activities. From October 1, 2008, through September 30, 2013, OESE closed 86 external OIG audits. Of the 86 closed audits, 59 (69 percent) were closed more than 2 years after resolution and 34 (40 percent) were closed more than 5 years after resolution. The total of the monetary recommendations associated with the 86 audits was more than $587 million. Further, we found that OESE did not always adequately maintain documentation of audit followup activities. This included not maintaining supporting documentation of corrective actions in the official audit file and not maintaining documentation that supported that auditees actually took requested corrective actions before audit closure.

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At the request of the Tennessee Valley Authority's (TVA) Supply Chain, the OIG examined proposed hourly labor rates and drilling services unit rates for a managed task contract for TVA's Dam Safety Assurance Program. Our objective was to determine if the proposed hourly labor rates and drilling services unit rates were fairly stated. In our opinion, the proposed hourly labor rates were fairly stated. However, we found (1) the proposed drilling services unit rates included overstated labor markup rates, and (2) the hourly labor rates did not include a driller helper labor classification to be utilized for drilling services when additional helpers were needed. TVA's Supply Chain subsequently entered into a contract with the vendor and was successful in negotiating a (1) reduction in proposed drilling services unit rates which will potentially save TVA $46,300, based on TVA's plans to spend $40 million over 5 years, and (2) new labor category within drilling services for use when additional support is needed in the field. In addition, we compared the vendor's effective profit included in the proposed hourly labor rates to the profit rates included in a similar contract TVA has with the vendor and found the mix of field and home office labor will determine which contract would result in lower costs to TVA.(Summary Only)

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, the OIG examined a cost proposal submitted for construction/modification services. Our objective was to determine if the cost proposal was fairly stated for a planned $100 million contract. In our opinion, the cost proposal (1) included inconsistent equipment and labor markup rates, (2) included overstated labor markup rates, (3) overstated the Paradise Fossil Plant baseline project price, and (4) overstated the minimum non-manual wage rates. We estimated TVA could avoid about $4.1 million on the planned $100 million contract by negotiating reduced markup rates and ensuring fixed price estimates are calculated correctly with negotiated rates. In addition, we found the contract's compensation terms and related attachments were inconsistent with the methodology TVA intends to use to compensate the contractor.(Summary Only)

FISMA is meant to bolster computer and network security within the federal government. In accordance with FISMA and guidance from the Office of Management and Budget, TVA and the TVA OIG are required to report on agency-wide IT security and privacy practices annually. In our 2015 review of TVA's information security program, we found TVA was in compliance in the security program control areas of (1) identity and access management, (2) incident response and reporting, (3) plan of action and milestones, (4) remote access management, and (5) contingency planning. However, TVA still has ongoing actions in the following areas: (1) continuous monitoring management, (2) configuration management, (3) risk management, (4) security training, and (5) contractor systems control. Additionally, we found controls over the issuing of virtual private network tokens could be improved. TVA management agreed with our findings and recommendations and is implementing its remediation plan.(Summary Only)