This site will post communications directed to the Roane Community Advisory Group (CAG) as they are received in order to keep the community affected by the TVA ash dike failure fully informed.

General information regarding the CAG and relevant public documents are posted at the CAG website.

Friday, March 19, 2010

Inspector General Report

"We recommended TVA management (1) take action to recover the $184,487 in overbilled costs..."

Full Report after the jump.

 TVA's Hearing Conservation Program (HCP)

2009-12292 - February 25, 2010

We reviewed TVA's Hearing Conservation Program (the Program) to determine whether (1) the Program complied with Occupational Safety and Health Administration's (OSHA) regulations, and (2) TVA organizations were in compliance with the Program guidelines. We also looked at actions taken to address recommendations in a prior, related OIG report. We found TVA's Hearing Conservation Program complied with significant provisions of 29 CFR Part 1910.95, "Occupational Noise Exposure" issued by OSHA. However, we found certain TVA sites did not (a) perform and/or use sound level surveys in accordance with the Program, (b) adhere to Program hearing protection requirements and/or discipline employees when hearing protection was not worn in designated areas, (c) ensure Program individuals' annual audiogram and training requirements were met, and (d) record loggable Standard Threshold Shifts (STS) on the OSHA 300 log. We also found TVA's current organizational structure does not allow for e
nforcement of the Program by Corporate Health and Safety. Finally, our review confirmed the existence of an employee culture which promotes the filing of hearing loss claims. This was also included in a report issued by the OIG in March 2009.

(Full Report)

Distributor Review of Murphy Electric Power Board

2008-12038 - February 19, 2010

The OIG performed a review of Murphy Power Board (Murphy), a distributor for TVA power based in Murphy, North Carolina. Our review of Murphy found issues involving customer classification and metering that could impact (1) the proper reporting of electric sales, and (2) nondiscrimination in providing electricity to members of the same rate class. We were unable to estimate the monetary effect of all the classification and metering issues because in some instances information was not available; however, for those where information was available, the monetary effect on Murphy and TVA would not be material. In addition, we found Murphy had more than enough cash on hand to cover planned capital projects and provide a cash reserve of about 12 percent. While TVA has established guidelines to determine if a distributor has adequate cash reserves (cash ratio of 5 percent to 8 percent), TVA has not established guidelines to determine if a distributor's cash reserves are excessive.

We also found improvements were needed to (1) comply with contract provisions regarding customer contracts and use of joint cost studies, and (2) strengthen internal controls. Finally, we found one TVA billing error as well as certain opportunities to enhance TVA oversight of the distributors that were also identified in previous distributor audits. TVA is in the process of addressing these findings which include a lack of: (1) guidance related to when a demand meter is required, (2) guidance on what constitutes prudent expenditures, and (3) criteria for evaluating when a distributor's cash reserves are excessive.

We recommended the Group President, Strategy and External Relations, work with Murphy to: (1) remediate classification and metering issues, (2) comply with contract provisions related to proper allocation of joint costs, and (3) strengthen its internal controls. In addition, we recommended the Group President, Strategy and External Relations: (1) recover amounts incorrectly credited to Murphy, and (2) determine if other Competitive Index Rate (CIR) customers with other distributors have been credited appropriately. TVA and Murphy management generally agreed with and are taking actions to address the recommendations. However, TVA management did not agree with the recommendation to recover incorrectly credited CIR amounts from Murphy since the customer receiving the credit is no longer in business and recovery through litigation is unlikely. In addition, TVA stated they have been focused on putting procedures and processes in place to better assure that TVA rates and pricing pr
ograms are implemented and carried out as intended in the future.

(Full Report)

Review of Green Power Marketing

2009-12296 - February 18, 2010

To facilitate public understanding of TVA's efforts to promote the use of green power in the Tennessee Valley, we reviewed the Green Power SwitchŽ program. Specifically, we reviewed the program to determine whether (1) the methods used by TVA to market the program disclosed that green power goes into the general power mix, and (2) revenue from the program exceeded related marketing expenses. In summary, while not all advertising materials reviewed directly stated that green power is part of TVA's power mix, they did direct consumers to information disclosing that the green power goes into the general power mix. In addition, for fiscal years 2007 and 2008, the revenue generated from the Green Power SwitchŽ program exceeded the related marketing expenses.

(Full Report)

 Contract for Engineering and Technical Support Services for the Watts Bar Unit 2 Project

2008-11973 - February 4, 2010

We audited $10.16 million in costs billed to TVA by a contractor for providiing professional engineering and technical support services associated with the detailed, scoping, estimating, and planning study related to the potential completion of Unit 2 at Watts Bar Nuclear Plant. In summary, we found (1) the contractor directly billed TVA $175,094 for home office senior management and administrative personnel that should have been recovered through its overhead rate; (2) the contractor overbilled TVA an estimated $9,393 due to miscellaneous unsupported and ineligible billings for payroll additive costs, relocation expenses, and travel costs; and (3) TVA paid the contractor an additional $33,000 in fees due to conflicting contract language regarding the application of fees for travel costs. We recommended TVA management (1) take action to recover the $184,487 in overbilled costs, and (2) determine the appropriateness of including travel costs in the contractor's fee base.

(Summary Only)

For a complete list of all reports, please click the link below:

The following physical address is associated with this mailing list:

Tennessee Valley Authority
Office of the Inspector General
400 West Summit Hill Drive, ET 4C
Knoxville, TN 37902

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