Semiannual Report

This is our fourteenth semiannual report and the second since I became Inspector General. This report also marks the near completion of my first year on the jobIt has been a challenging and eventful year. I have repeatedly been impressed by the dedication and skill of the men and women of this office whose efforts are directed toward making TVA the best utility in North America and the most productive and effective agency in the federal government. We share these goals with all TVA managers and employees and with TVA's many friends and supporters in the Tennessee Valley, Congress, and elsewhere.This reporting period saw significant changes within our office. We created a new operational unit­ Inspections-which will increase our coverage of TVA's activities by conducting focused, quick turnaround reviews of TVA processes, programs, and organizational units. In conjunction with staffing Inspections using current Office of the Inspector General personnel, we reduced the number of departments from four to three for each of the other two units-Audits and Investigations.This period also marked the conclusion of a major joint auditor-investigator project-a review of payments to TVA's employee medical insurance administrator. As a result of this review, TVA reached a settlement under which the administrator paid TVA over $8 million.We also issued 33 audit reports, completed 5 inspections, and closed over 200 investigative cases. These activities resulted in 33 individuals being referred to federal and state prosecutors and identification of nearly $160 million in funds that could be put to better use and over $17.5 million in questioned costs.Based on these positive results and the strong support of TVA managers, employees and Congress, I anticipate even better results in the future. As always, our effectiveness depends in large measure on this support and the dedication and effort of our employees. We will continue to work to justify this trust and be faithful stewards of the responsibilities assigned to us. Sincerely, William L. Hinshaw, II