Federal Reports

Semiannual Report to Congress

This is our eighth semiannual report to Congress. It summarizes our significant audit and investigative activities from October 1, 1989 to March 31, 1990. This report also reflects the new reporting requirements of the Inspector General Act Amendments of 1988.TVA is taking aggressive steps to constantly improve the way it does business, and we are commit­ ted to assist this process by, among other things, working cooperatively with TVA management and assuring that our activities contribute to TVA's overall goals.During this reporting period, some of our more noteworthy contributions to TVA's efficient operation included (1) our timely completion of pre-award audits, which collectively identified more than$16 million which could be put to better use; (2) our continued identification of workers' compensation fraud; and (3) our investigation of alleged intimidation and harassment in TVA's Nuclear Power program.We are pleased to report that TVA management has been responsive to our audit recommendations and investigative findings and has taken administrative and disciplinary actions and implemented policy and procedures which saved TVA millions of dollars and increased its efficiency.We are committed to helping TVA achieve its overall mission and will continue to do our part to detect and eliminate fraud, waste, and inefficient or unnecessary operations. We are encouraged by TV A management's strong support, responsiveness, and cooperation and believe their actions materially contribute to the success of our activities.Sincerely,Norman A. Zigrossi

Semiannual Report to Congress

This is our seventh semiannual report to Congress. It summarizes our major activities and accomplishments from April 1, 1989 to September 30, 1989.During this reporting period, we issued 31 final audit reports, 131 investigative reports, and 6 project reports to TVA management. These investigations and audits have demonstrated their cost-savings potential. For example, one investigative project--involving over 650 interviews--has resulted in TV A management's withholding over $4.3 million from TVA contractors. Other investigations involving workers' compensation benefits may have saved TVA more than $2.5 million over the long term in avoided disability benefits costs.Our auditors are also working to save TVA money. Their reports have identified almost $4 million in questioned costs and about $27 million in funds that could be put to better use. For example, we conducted five preaward audits which questioned $2.5 million of the contractors' proposed costs. We also completed two audits in support of litigation with TVA contractors which questioned over$3 million of the $5 million in claimed damages. TVA subsequently settled these lawsuits out of court and agreed to pay only $260,000 of the $5 million claimed.In pursuit of our goal to improve TVA, we have also identified instances of questionable conduct and needed improvements. However, the shortcomings identified in this report should not be viewed as characteristic of TVA. To the contrary, a significant number of our conclusions are favorable to TVA management and employees. For example, during this reporting period, approximately two-thirds of the allegations we investigated were not substantiated.The support of TVA managers and employees makes possible many of the results documented in this report, and we are pleased to report this support is strong and continuing to increase. We draw strength and encouragement from this support and will continue to work to justify this trust.Sincerely,Norman A. Zigrossi

This is the fifth Semiannual Report for the Office of the Inspector General (OIG). It summarizes our major OIG activities and accomplishments from April 1, 1988 to September 30, 1988.This six-month period saw major changes at TVA. In mid­ May, a corporate reorganization was announced which was designed to improve TVA's overall efficiency and ability to operate in a competitive business environment. During June, a major reduction in force was announced with a goal of reducing TVA's workforce by 7,500. The Board of Directors voted in August to keep power rates at current levels and also announced their commitment to keeping rates stable for three years. The entire Agency, including the OIG, has focused during this reporting period on identifying "A New Way of Doing Business."There were a number of significant accomplishments this re­ porting period. We opened 308 new cases, closed 494 investigations, and referred 73 matters to Federal and state prosecutors. The United States Court of Appeals for the Sixth Circuit affirmed a district court's ruling that our investigation of alleged drug use by Sequoyah Nuclear Plant employees (which we reported last April) was entirely appropriate. We issued 39 audit reports and identified over $7 million in questioned costs. Moreover, TVA management accepted our audit recommendations over 86 percent of the time.In our last semiannual report, we described our investigation of a major travel voucher fraud scheme involving Nuclear Quality Assurance employees. As a result of that investigation, TVA terminated 28 employees, a Federal Grand Jury indicted 27 individuals, and 24 persons pled guilty to submitting fraudulent travel vouchers. Twenty-four former employees have been ordered by a Federal Judge to make restitution to TVA.The investigations of drug use and travel fraud were difficult for the OIG and for TVA and its employees. It is regrettable there has been so much disruption in TVA and in the lives of those individuals who were the subjects of these investigations. However, the principle underlying those cases--that the Government must have a trustworthy, unimpaired workforce-­ is immutable.A significant development occurred just prior to our issuing this report. On October 18, 1988, President Reagan signed the Inspector General Act Amendments of 1988 into law. This new law created agency-appointed Inspectors General for 33 Federal entities including TVA. The OIG is now re­ sponsible, as a matter of law, for virtually all of TVA's internal audit and investigative activities. For the most part, this new law will not radically affect the OIG's operations. However, we welcome the permanent subpoena power and the authority to take sworn statements.As we complete a reporting period marked with change and challenges, the OIG is committed to helping TVA find "New Ways of Doing Business" that will promote integrity and efficiency and benefit our ratepayers and taxpayers.Sincerely,Norman A. Zigrossi

This is our fourth Semiannual Report and it marks the second full year of the Office of the Inspector General's (OIG) operations. The report describes our major activities from October 1, 1987 to March31. 1988.This has been an eventful six months and a productive two years.As of the date of this report, we have closed nearly 90 percent of the employee concerns that. fell within our investigative jurisdiction and were reported to the Quality Technology Company. In addition, since the OIG's inception, TVA management has agreed-with 80 percent of our audit recommendations. To date, these management actions have resulted in more than $126 million in avoided costs.There were also significant accomplishments this reporting period. An OIG-recommended change in TVA's accounting procedures resulted in a $92 million increase in TVA's revenues. On the investigative side,we closed over 450 cases•, referred 74 matters to Federal or Stateprosecutors, and issued over 200 investigative reports. In addition, significant criminal investigations are underway that already have resulted in the recent indictment of over 25 TVA employees.These accomplishments demonstrate the OIG is a catalyst for change within TVA and is striving to promote integrity and efficiency in TVA's programs. We believe our activities will continue to benefit TVA management and employees, the ratepayers, and the taxpayers­ which is what the Board of Directors intended when it established the OIG as an independent ·office within TVA.Throughout the last two years, the TVA Board of Directors, TVA managers and employees, Members of Congress, and the public have strongly supported the OIG. We continue to draw strength and encouragement from this support and will continue to work to justify this trust.Sincerely,Norman A. Zigrossi