Semiannual Report

This semiannual report summarizes the work of the OIG from April 1 through September 30, 2004. The audits, investigations, and inspections highlighted in this report illustrate our continuing commitment to helping TVA promote economy, efficiency, and effectiveness in its programs and operations.During the past six months, our audits, investigations, and inspections continued to add to TVA’s “bottom line.” We identified over $4.8 million in potential savings or recoveries, and TVA used our findings from this and prior reporting periods to save over $7 million. The amount of realized savings illustrates how effectively the OIG and TVA work together both in identifying potential problems and resolving those problems. I appreciate the cooperation and support we receive from the TVA Board, management, and employees in our work.As part of our efforts to focus our resources on major areas, we increased our manpower devoted to the Browns Ferry Nuclear Plant (BFN) Unit 1 Restart Project. Audit, investigation, and inspection resources are being dedicated to BFN to conduct reviews designed to promote cost control and to identify on a proactive basis fraud, waste, or abuse that may be occurring. We also have numerous projects underway to ensure integrity in our contract administration process and to look for cost savings opportunities. As an example, during this reporting period we determined, among other things, that a contractor providing engineering services for the BFN Unit 1 restart had overbilled TVA $602,611. We will continue to examine the major contracts andsubcontracts to ensure TVA is getting the benefit of its bargain.Finally, I note that the OIG is losing one of its founding fathers. G. Donald Hickman, one of the first people to start this office in 1986, has retired. Mr. Hickman was the Acting Inspector General (IG) before my appointment and the Assistant Inspector General for Investigations for ten years. He has been heralded through- out the IG community for his work––in 2000 he received an Award of Excellence from the IG community, and this year he received an Individual Accomplishment Award for his work on the OIG investigation peer review process. Mr. Hickman’s contributions to both the IG community and to the TVA OIG will be long remembered. He has our best wishes for a well-deserved retirement.It is truly an honor to work alongside the many dedicated men and women who pull together to make TVA successful. They are aided, as are we, by the continued leadership and support of the TVA Board and the United States Congress. Together we can build a better TVA for future generations.