MESSAGE FROM THE INSPECTOR GENERAL BEN WAGNER
I am pleased to present our report for the period April 1, 2023, to September 30, 2023. In this semiannual period, our audit, evaluation, and investigative activities identified more than $67.7 million in questioned costs; funds to be put to better use; recoveries, fees, and fines; waste/other monetary loss; and opportunities for Tennessee Valley Authority (TVA) to improve its programs and operations. Below are highlights of our work this period.
- Three contract compliance audits identified almost $6.2 million in questioned costs.
- Two preaward examinations identified about $54.3 million of potential savings opportunities for TVA to negotiate.
- An audit of TVA's load not served (LNS) winning performance measure identified opportunities to improve the controls to ensure appropriateness of LNS exclusions and user access permissions.
- Information Technology (IT) Audits' Federal Information Security Modernization Act (FISMA) audit found TVA's information security program was not operating in an effective manner based on our analysis of the FISMA metrics for fiscal year (FY) 2023.
- An evaluation found most critical components at gas plants have not been evaluated to identify critical spare parts, and additional improvements were needed for storage and maintenance of certain critical spare parts.
- Four organizational effectiveness evaluations in the Gas Operations, TVA Police and Emergency Management, Transmission Planning and Projects, and Power Service Shop organizations identified strengths as well as risks that could, if not addressed, impact each individual business unit's ability to execute its mission.
- Our investigative results include four indictments, one information, three convictions, two civil settlements, and multiple criminal and administrative restitutions totaling about $7.2 million.
Sadly, on July 5, 2023, former Inspector General (IG) Norman A. Zigrossi passed away. Norm Zigrossi was appointed by the TVA Board of Directors (Board) as TVA's first IG. He served as IG from January 1986 until April 1992. At the time of his appointment, TVA was in the midst of shutting down its nuclear program because of safety concerns. The initial caseload of the Office of the Inspector General (OIG) would be centered on these nuclear safety concerns. Prior to becoming IG, Norm was with the Federal Bureau of Investigations for 23 years. I was honored to work with him in building the foundation for the office we have today. We send our condolences to his family and our appreciation for his service to this country and our office.
On May 18, 2023, TVA celebrated its 90th anniversary. During those years, TVA has employed different strategies to carry out its mission. Early in TVA's history, the focus was on building dams, taming the Tennessee River, and building the infrastructure to provide electricity to the Valley. Later as technologies changed and growth occurred, TVA deployed fossil fuel and nuclear power generation. Today, the Tennessee Valley region is growing faster than many areas of the country, and the push to reduce carbon emissions is causing TVA, once again, to make major shifts in how it powers the Valley.
In August 2023, the TVA Board "approved $15 billion in investments over the next three years to build additional generation and upgrade the existing system to ensure the region continues to benefit from affordable, reliable power." TVA's Chief Executive Officer, Jeff Lyash, stated "It took us 90 years to build our current power system which positively changed the lives of millions. In the next 30 years, we will have to double or triple the current systems at a speed unlike any other time in TVA history to ensure we can continue to provide affordable, reliable, resilient, and sustainable energy to fuel the region's economic growth."
As TVA works to meet the growing generation demand of the Valley and evolve its generation portfolio to meet net zero carbon goals, our role is to provide independent oversight of TVA, identify ways to improve the efficiency and effectiveness of TVA operations, and prevent and detect fraud, waste, and abuse. For more than 37 years, we have identified (1) ways for TVA to save and recover costs, (2) ways to improve operations, and (3) people or companies that defrauded TVA. We will continue to approach our work with the purpose of making TVA better for the people of the Valley-a purpose that we share with the TVA Board, management, and employees.