Reporting Requirements Under the Inspector General Act
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1 TVA Locations W.V. IL. R o i v i e h r Lovers Lane KENTUCKY Soccer Complex O Paradise Fossil & Combined Shawnee Cycle Plant Fossil Plant VIRGINIA Kentucky MISSOURI Marshall Dam & Lock Clear Creek Dam Combustion Turbine Duffield Primary School Beaver Creek Dam r e Ft. Patrick Henry Dam South v Holston Dam Boone Dam i C Doakes u John Sevier Dam Wilbur Dam m Creek Dam R John Sevier Cumberland b Watauga Fossil Plant Combined Cycle ARK. Gleason e Adventure Gallatin Fossil Plant Dam i Combustion Turbine r Science Center & Combustion Turbine Morgan County Buffalo l Vocational Technical Mountain Norris Dam p a Cherokee n School Nolichucky Gibson County d Dam p Bull Run Dam High School R Ijams i American Museum of Science and Energy Fossil i v Cocke County Johnsonville e Plant Nature Combustion Turbine r Center Douglas High School s Melton Dam Kingston Fossil Plant Hill Dam Lagoon Creek s & Lock i Combustion Turbine Cedar Ft. Loudoun Dam & Lock s Dam TENNESSEE & Combined Pin Oak Dam Tellico NORTH s Great Falls Dam Dam Cycle Plant Beech Dam Redbud Dam i Dogwood Dam Watts Bar CAROLINA Watts Bar Dam & Lock M Pine Dam Lost Creek Dam Nuclear Plant Sycamore Dam Fontana Dam Brownsville Combustion Turbine Normandy Dam BRIDGES Center R i v e r Apalachia Sequoyah Nuclear Plant Dam Tims Ford Dam Hiwassee Dam Allen Combustion Turbines Ocoee #1 Dam & Methane Facility Chickamauga Dam & Lock Ocoee #2 Dam Chatuge Dam Pickwick Landing Dam & Lock Nickajack Dam & Lock Ocoee #3 Dam Finley Stadium Nottely Dam Florence Water Huntsville Raccoon Southaven Wheeler Mountain SOUTH Magnolia Treatment Facility Dam & Lock Botanical Garden Pumped Blue Ridge Dam Combined Combined Storage CAROLINA Cycle Cycle Colbert Browns Ferry Plant Plant Plant Wilson CombustionTurbine Dam Nuclear Plant & Lock University of Mississippi e Cedar Creek Dam e Intramural Sports Complex b Guntersville g Little Bear Creek Dam i Dam & Lock b m y Bear Creek Dam T e n n e s s e e o a T w - r e e GEORGIA e t s a s Upper Bear Creek Dam W e n n e MISSISSIPPI T Caledonia ALABAMA Combined LEGEND Cycle Plant State Line TVA Nuclear Plant Mississippi State Water TVA Combined Cycle Plant University Ackerman Power Service Area TVA Combustion Turbine Plant Combined Cycle Plant TVA Watershed TVA Pumped Storage Plant TVA Hydroelectric Dam Green Power Switch® Solar Site TVA Non-Power Dam Green Power Switch® Wind Site Kemper Combustion ® Turbine TVA Coal-Fired Plant Green Power Switch Methane Site 0 20 40 60 mi. Oct. 2018 N Power Supply from TVA-Operated Generation Facilities and Purchased Power 1 Twelve Months Ended September 30, 2019 (in millions of kilowatt hours) Purchased power • Coal-fired - 27,934 (non-renewable) Purchased power (renewable) Natural gas • Nuclear - 63,433 and/or oil-fired Coal-fired • Hydroelectric - 16,058 • Natural gas and/or oil-fired - 31,704 • Purchased power (non-renewable) - 14,105 Hydroelectric • Purchased power (renewable) - 7,840 Nuclear 1 For additional detail, see TVA’s 10-K for the period ended September 30, 2019. 2 TABLE OF CONTENTS Message from the Deputy Inspector General. ...........................................4 Noteworthy Events ..............................................................6 Executive Overview ..............................................................8 Organization ..................................................................12 Audits ......................................................................16 Evaluations...................................................................20 Investigations .................................................................32 Legislation and Regulations .......................................................36 Appendices...................................................................38 Appendix 1 – Index of Reporting Requirements Under the Inspector General Act . 39 Appendix 2 – Audit, Evaluation, and Special Project Reports Issued .......................... 41 Appendix 3 – Audit and Evaluation Reports Issued with Questioned and Unsupported Costs and Recommendations for Better Use of Funds ................. 44 Appendix 4 – Audit, Evaluation, and Special Project Reports Recommendations Included in a Previous Semiannual Report and Awaiting Implementation .................... 46 Appendix 5 – Investigative Referrals and Prosecutive Results .............................. 48 Appendix 6 – Previously Undisclosed Investigations Involving Senior Agency Officials ............. 49 Appendix 7 – Statistical Highlights . 50 Appendix 8 – Government Contractor Audit Findings ..................................... 51 Appendix 9 – Peer Reviews of the TVA OIG............................................ 52 Appendix 10 – Peer Reviews of Other OIGs............................................ 53 Glossary.....................................................................54 Abbreviations and Acronyms . 57 3 MESSAGE FROM THE DEPUTY INSPECTOR GENERAL I am pleased to present our report for the period April 1, 2019, to September 30, 2019. Our independent, professional, and dedicated staff are focused on identifying potential risks to the Tennessee Valley Authority’s (TVA) ability to achieve its mission of providing reliable power at the lowest feasible rates, environmental stewardship, and economic development to the Tennessee Valley. In this semiannual period, our audit, evaluation, and • Evaluations of coal and gas plant emergency investigative activities identified more than $13.7 million preparedness and response identified emergency in questioned costs, recoveries, and savings, and shared plans that contained inaccurate information and were opportunities for TVA to improve its programs and not reviewed on a timely basis. In addition, some operations. Below are highlights of our work this period. systems necessary for execution of the plans were not available or not functional. • A contract compliance audit identified overbillings of $46,828, and the use of fixed price payment terms • An evaluation of the design change process in coal caused TVA to pay at least $11.5 million more than operations found the design change process was not it would have if the contract’s cost reimbursable always followed resulting in outdated official drawings. payment terms had been used for those projects. • Organizational effectiveness evaluations of two Hydro • An audit of executive travel found several instances generation regions, one fossil plant, nuclear security, where TVA executives did not comply with the Federal Transmission Operations, Reliability and SCADA,1 Travel Regulation and/or TVA travel policies. and IT Corporate Solutions identified strengths as well as risks that could impact the ability of the groups to • In a review of the TVA transmission system’s internet achieve their mission. security, Information Technology (IT) Audits identified vulnerabilities that increase TVA’s risk of cyberattacks, • A contractor with subject matter expertise reviewed a gap in its monitoring system, and device groundwater monitoring activities at the Kingston configuration issues. TVA took immediate action to Fossil Plant Peninsula Disposal Unit and opined mitigate the vulnerabilities. that monitoring activities performed there are in 1 The acronym, SCADA, is defined as Supervisory Control and Data Acquisition. 4 adherence with the Environmental Protection Agency In August 2019, William B. Kilbride of Chattanooga, and the Tennessee Department of Environment and Tennessee, was sworn in as the newest member of the Conservation guidelines. Additionally, the contractor TVA Board. We welcome Director Kilbride and look stated the work performed appears to be of high forward to a productive working relationship with him. quality and does not likely result in any discrepancies for the program. We share a common goal with the TVA Board, the Chief Executive Officer, and TVA employees; we want TVA to • Investigative results included sentencing of a former succeed for the betterment of the Tennessee Valley. We employee in a theft case, a guilty plea in a temporary are committed to continuing to shine a light on potential living allowance case, recovery of more than $560,000, risks so that TVA Board members and management can and identification of more than $1.5 million in other make changes to mitigate those risks and better serve the monetary loss. people of the Tennessee Valley. Jill M. Matthews Deputy Inspector General Performing the Duties of the Inspector General 5 NOTEWORTHY EVENTS 6 ERIC CORBETT RECOGNIZED FOR CONTRIBUTION TO CIGIE TRAINING PROGRAM The Council of the Inspectors General on Integrity and Efficiency (CIGIE) was established to address integrity, economy, and effectiveness issues that transcend individual government agencies and aid in the establishment of a professional, well-trained, and highly skilled workforce across the 74 Offices of Inspectors General (OIG). CIGIE relies, in part, on people within the Inspector General (IG) community willing to share their experience, expertise, and knowledge with colleagues in the community as adjunct instructors. On October 17, 2019, CIGIE recognized those individuals from across the community that have served as adjunct instructors for CIGIE learning programs. Our own, Eric Corbett, was one of those recognized for his From left to right: Maria Edwards, Rick Taylor, and Ala Young. contributions to CIGIE. Eric leveraged his experience as a Senior Fraud Examiner to create a “Data Analytics in Excellence for their audit of the post-project economic Investigations” teaching block for