Semiannual Report

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