MESSAGE FROM THE Deputy Inspector General Performing the Duties of Inspector General JILL MATTHEWS
II am pleased to present our report for the period October 1, 2018, to March 31, 2019. Our office is focused on providing independent analysis of Tennessee Valley Authority (TVA) operations and programs. This allows us to help identify more efficient and effective ways to do business and to prevent and detect fraud, waste, and abuse. Simply put, we approach our work with the intention of making TVA better for the people of the Tennessee Valley.
In this semiannual period, our audit, evaluation, and investigative activities identified (1) more than $3.3 million in funds TVA could put to better use and recoveries, and (2)numerous opportunities for TVA to improve its programs and operations. Below are highlights of our work this period.
- Three preaward contract examinations of cost proposals submitted by companies to provide civil projects and coal combustion residual program management services and one examination of proposed labor and labor markup rates for a current contract extension identified more than $3.3 million in potential savings opportunities for TVA.
- A contract compliance audit found the contractor was generally billing in accordance with contract terms; however, improvements could be made regarding document retention.
- An audit of tool controls at a plant identified weaknesses where processes were not in compliance with TVA's business practice controls over issuance and returns of tools as well as access controls. There were also deficiencies in a new tracking system.
- An audit of TVA's helicopter fleet, primarily focused on their use for passenger transportation, identified weaknesses where procedures were not in compliance with statutes, regulations, and TVA policy.
- An audit of EnergyRight® Solutions loan obligations and receivables identified improvement opportunities related to TVA's ability to confirm individual loan balances, timely write-off of loans, reconciliation of loan balances between the local power provider and bank, and documentation retention.
- An evaluation of required nuclear training identified that some required training was not taken or taken after established time frames. It also identified improvement opportunities regarding establishment, assignment, and tracking of requirements, and logs used to document fire brigade member assignments.
- Information Technology Audits identified areas for improvement related to controls for ransomware, Federal Information Security Modernization Act compliance, access to personally identifiable information, and vendor selection for a new human capital management system.
- Organizational effectiveness evaluations at two fossil plants identified strengths as well as risks that could impact the ability for the groups to achieve their mission.
- Investigative results included an indictment for mail fraud, a theft conviction of a former employee, and a conviction and sentencing for Clean Water Act violations.
Our team remains focused not only on what we do but how we perform our work every day to maximize our resources and help identify risks to TVA. This focus is a key component of our office culture and has helped us to achieve better results. In December, our office was honored once again as one of the best places to work in the federal government.
Since January, TVA has seen changes in its TVA Board of Directors and at the President and Chief Executive Officer (CEO) position. Director Eric Satz' term on the Board of Directors (Board) was completed at the end of the last Congressional session. Director Satz served on the Board from August 2015 through December 2018, including time as Chair of the External Relations Committee. We extend our appreciation to Director Satz for his service.
In March 2019, John Ryder of Memphis, Tennessee, was sworn in as the newest member of the TVA Board, and shortly thereafter, in April 2019, Jeff Lyash replaced Bill Johnson as TVA's President and CEO. Mr. Johnson served as CEO since 2013 and guided TVA through significant changes such as reassessing the generation portfolio and improving the financial performance of TVA. We extend our appreciation to Bill Johnson for his service to the people of the Valley.
We welcome Director Ryder and Mr. Lyash and look forward to a productive working relationship with both of them. We share a common purpose with the TVA Board and CEO to find ways to make TVA better for current and future residents of the Valley.