Semiannual Report

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