Federal Reports

We reviewed TVA cost recovery for tritium production under Interagency Agreement DE-A102-00DP00315 with the Department of Energy (DOE). The audit covered the period from January 2000 through December 2009 with some scope restrictions due to incomplete accounting data. We were unable to determine if tritium production costs were accurately identified and invoiced or if any negative impacts on plant operation from tritium production were reimbursed by DOE due to inadequate documentation. Specifically, Nuclear Power Group (NPG) management: (1) had incomplete accounting data, (2) negotiated rates that did not accurately reflect NPG's anticipated costs, (3) did not address $9 million in under-recovered overhead identified in the previous Office of the Inspector General audit on the tritium agreement, (4) did not invoice standby payments and overhead in compliance with agreement terms, (5) did not identify all additional operating costs caused by tritium production, (6) did not have support for $22.9 million in expenses and an unknown amount of revenues, and (7) misclassified revenue. Possible consequences of the audit findings include noncompliance with the Economy Act, noncompliance with the TVA Act resulting in rate-payer subsidy of tritium production, and unreliable NPG financial/performance data.

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $144.0 million in funds received by the Pennsylvania Bureau of Commissions, Elections and Legislation under the Help America Vote Act. The objectives of the audit were to determine whether the Bureau (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 except for the requirements for maintenance of a base level of state outlays, commonly referred to as Maintenance of Expenditures (MOE).

EAC OIG, through the independent public accounting firm of Clifton Gunderson LLP, audited $155.5 million in funds received by the Illinois State Board of Elections under the Help America Vote Act. The objectives of the audit were to determine whether the state Board 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 except for the requirements for maintenance of a base level of state outlays, commonly referred to as Maintenance of Expenditures (MOE).

Tennessee Valley Authority's (TVA) fossil fleet consists of 56 operating units at 11 fossil plants in the Tennessee Valley. Through the third quarter of fiscal year (FY) 2010, TVA purchased 25.2 million tons of coal totaling $1.36 billion and burned 25.7 million tons totaling $1.50 billion. TVA's fuel inventory as of June 30, 2010, was $518,658,383. We assessed the operating effectiveness of the controls over the receipt and burning of coal at the fossil plants, including inventory adjustments. Specifically, we determined:The variance reports are generated using information in the Daily Coal Report (DCR). However, the vendor name listed in the DCR does not consistently represent the respective coal company, coal mine, or loading point, which could prevent the identification of significant issues.Variance investigations are not always coordinated between Coal and Gas Services (CGS) and plant personnel, which could impact the efficiency of the investigations.Material tests, which ensure the accuracy of the TVA scales, are not being conducted on all receipt and burn scales on an annual basis at the 11 TVA fossil plants. According to TVA personnel, Problem Evaluation Reports (PERs) have been written at Allen and Gallatin fossil plants for infrastructure deficiencies preventing material testing.Documentation is not consistently maintained for the daily belt scale checks, weekly belt scale calibrations, and material flow checks. Therefore, we were unable to determine whether these checks were consistently conducted.No formal process exists for conducting investigations on inventory adjustments that exceed the tolerable limit. According to TVA management, the Fossil Power Group (FPG) began utilizing Maximo to document and track PERs for inventory adjustment investigations in FY 2011. Summary Only