Federal Reports

The Office of the Inspector General included a review of Revenue Billing's invoice preparation process for local power companies (LPC) on its annual audit plan because of the significance of this source of revenue to TVA. We audited the invoice preparation process for the period April 1, 2011, through July 31, 2013, to determine if: (1) wholesale invoices were calculated correctly, (2) controls to prevent/detect invoice errors were adequate, and (3) Oracle Utilities had appropriate/adequate information technology general and application level controls.Our audit of the invoice preparation process for LPCs during the period, found: (1) wholesale invoices were calculated correctly, (2) controls to prevent/detect invoice errors were adequate, and (3) Oracle Utilities had appropriate/adequate IT general and application level controls. However, we identified minor issues where changes could strengthen and/or improve the revenue billing process and decrease the likelihood of errors or adjustments.

Presentation

The Office of the Inspector General audited costs billed to the Tennessee Valley Authority (TVA) by Bechtel Power Corporation for services provided by Bartlett Holdings, Inc. Bartlett was to furnish qualified personnel to Bechtel on a seconded basis for the Watts Bar Nuclear Plant Unit 2 construction completion project. Our audit included approximately $121.4 million in payments made by TVA for services provided under the subcontract from January 1, 2010, through September 30, 2013. Our objective was to determine if the costs billed to TVA were in accordance with the provisions of TVA's contract with Bechtel and Bechtel's agreement with Bartlett.In summary, we determined TVA was overbilled $1,547,434 for costs and fees billed under the contract associated with the Bechtel-Bartlett subcontract. The overbilling included (1) $1,484,582 in excessive payroll tax and insurance costs and related fee, (2) $60,287 in ineligible temporary living allowance costs, and (3) $2,565 in excessive labor costs and related fee. We recommended TVA management take action to recover $1,547,434 in overbilled costs from Bechtel and ensure payroll tax and insurance reconciliations are performed on an annual basis. Summary Only

The Office of the Inspector General performed this review as part of its ongoing effort to provide oversight of the Kingston Recovery Project to determine if TVA is meeting its commitments for the Kingston Recovery Project.Our review found TVA has met or is meeting its commitments for the Kingston Recovery Project. Community leaders and regulatory personnel interviewed were satisfied with TVA's actions to meet its commitments.In order to address these commitments, TVA has taken a number of steps. Specifically, TVA has cleaned up the ash spill and restored the area, protected public health and safety, kept the public and stakeholders informed and involved in the process, and helped with the economic development of Roane County. Some community leaders believe TVA has worked to make the area better than it was before the spill.