2 TVA OIG Semiannual Report 

TVA Power Generation For Fiscal Year Ended September 30, 2015

(in millions of kilowatt hours)

• Coal - 56,017

• Nuclear - 54,543

• Hydroelectric - 13,812

• Natural gas and/or oil-fired - 17,893

Hydroelectric

10%

Natural gas and/or oil-fired

13%

Coal

39%

Nuclear

38%

*Nonhydro renewable resource is less than 1 percent for the period 

 shown, and therefore not represented on the chart.
TVA OIG Semiannual Report 3

Message from the Inspector General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Special Feature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Noteworthy Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Executive Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Legislation and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Appendix 1 – Index of Reporting Requirements Under the Inspector General Act . . . . 57

Appendix 2 – Audit and Evaluation Reports Issued . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Appendix 3 – Audit and Evaluation Reports Issued with Questioned and

 Unsupported Costs and Recommendations for Better Use of Funds . . . . 60

Appendix 4 – Audit and Evaluation Reports with Corrective Actions Pending . . . . . . . 62

Appendix 5 – Investigative Referrals and Prosecutive Results . . . . . . . . . . . . . . . . . . 65

Appendix 6 – Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Appendix 7 – Government Contractor Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . 67

Appendix 8 – Peer Reviews of the TVA OIG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Appendix 9 – Peer Review Conducted of Another OIG . . . . . . . . . . . . . . . . . . . . . . . 67

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Abbreviations and Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Table of Contents

Making TVA Better
4 TVA OIG Semiannual Report 

oday, the TVA IG, like TVA Board members, is nominated by the President 

and confirmed by the United States (U.S.) Senate. Other changes over the 

years include TVA no longer receiving federal appropriations, moving from a fulltime three-member Board to a nine-member part-time Board, and reducing its 

workforce to about 11,000 employees. 

Thirty years since our office’s inception, TVA is focused on (1) maintaining rates 

as low as feasible, (2) living within its means, (3) managing its assets to meet 

reliability expectations and providing a balanced portfolio, (4) being responsible 

stewards of the region’s natural resources, and (5) improving performance and 

employee engagement.

Throughout these 30 years, the TVA OIG has stayed committed to providing 

an independent analysis of TVA operations and programs to help identify more 

efficient and effective ways to do business and to prevent and detect fraud,

waste, and abuse. In our feature, “Making TVA Better,” we take a look back at 

our office over the past 30 years, the changes in TVA and TVA OIG, and some 

of the contributions our office has made to help TVA save or recover money,

reduce risks, and improve operations. Making TVA better is a mutual purpose we 

share with TVA management, employees, and the TVA Board. It is important to 

the 9 million people of the Tennessee Valley served by TVA that we approach our 

work with that purpose every day. 

The relationship between a federal agency and an IG has been the subject of 

much comment over the last 30 years. This relationship is arguably one of the 

most challenging arrangements in the federal government. The natural tensions 

created by the IG being in the agency but publicly and independently reporting 

on matters that brings unwanted scrutiny on the agency has proven in TVA’s case 

to be particularly challenging. 

For us, this all means that we have to lean forward when it comes to 

communicating with our stakeholders. In other words, we have found it 

incumbent on us to initiate dialogue with our stakeholders, including TVA 

management and the TVA Board, rather than waiting for our stakeholders to ask 

us questions. We try to explain not just “what” we are doing but also answer the 

sometimes unspoken question from our stakeholders of “why” we are doing it. 

Staying in dialogue, despite the fact that there is sometimes disagreement over 

either the “what” or the “why,” requires mutual respect and a united commitment 

to find a way to work toward our mutual purpose of serving the people of the 

Tennessee Valley. We appreciate the highly professional working relationship 

that the OIG enjoys with both the TVA Board and TVA management and 

their considerable investment in making our relationship productive for all our 

stakeholders. 

On October 18, 2015, the 

Tennessee Valley Authority 

(TVA) Office of the Inspector 

General (OIG) celebrated its 30th 

anniversary. In those 

30 years, the OIG, like TVA, has 

evolved. Our office was created 

as a Board-established office 

with a Board-appointed Inspector 

General (IG) during a time when 

TVA faced a crisis in the building 

of its nuclear plants. TVA, at the 

time, had a three-member fulltime Board of Directors (Board), 

received federal appropriations, 

and employed more than 50,000 

people.

Message from

the 

Inspector 

General

T
TVA OIG Semiannual Report 5

With this report, I am pleased to present our work for the 

period April 1 to September 30, 2015. In this semiannual 

period, our audit, evaluation, and investigative activities 

identified more than $12.7 million in funds to be put to 

better use, questioned costs, recoveries, savings, and 

penalties, as well as opportunities for TVA to improve its 

programs and operations. Highlights include: 

• A contract compliance audit which questioned more 

than $7.4 million in rate adjustments and labor costs 

and associated fees for using rates not included in the 

contract and a preaward review that identified 

$2.1 million of potential savings related to overstated 

labor and burden rates and certain markup rates.

• Organizational effectiveness reviews in TVA’s Information 

Technology (IT) organization which identified 

improvements made by the groups since previous reviews 

in 2011, as well as additional areas for improvement 

going forward.

• An audit of electronic communications by the TVA 

Board which determined current e-mail practices were 

consistent with the Presidential and Federal Records Act 

Amendments of 2014. 

• An assessment of TVA’s process for developing TVA’s 

2015 Integrated Resource Plan (IRP) which found the 

process was adequate in considering potential future 

uncertainties and associated responses. 

• Several reviews that identified improvement 

opportunities in TVA processes or programs related 

to invoice approval, talent acquisition and deployment,

contractor workforce management, the TVA protocol for 

handling requests for things of value by certain influential 

individuals, management of hydro generation obsolete 

equipment, nuclear outage performance, fire protection,

overtime, and executive incentives.

• An investigation that led to a negotiated settlement to 

repay TVA $1 million because of defective pricing and a 

rebid of a contract which yielded a savings of $1.8 million. 

On a personal note, I want to thank Rob Martin for his 

many contributions to the TVA OIG. Rob, our Assistant 

Inspector General for Audits and Evaluations, retired 

on September 29, 2015, after a distinguished career in 

government auditing of more than 30 years, including 

the last 8 years with our office. Rob’s leadership and 

contributions made the OIG and TVA better. We thank you 

for your service, Rob.

I want to congratulate Dave Wheeler who has been 

selected as the new Assistant Inspector General for Audits 

and Evaluations. Dave, who joined our office in March 

1987 as an auditor, most recently served as Deputy 

Assistant Inspector General for Audits. Dave’s strong 

leadership and technical skills position him well to continue 

the tradition of excellence in Audits and Evaluations.

On July 28, 2015, Director Richard Howorth was 

nominated for a second term on the TVA Board. Director 

Howorth has served as the Chair of the People and 

Performance Committee, Customer and External 

Relations Committee, and External Relations Committee 

during his first term. We appreciate Director Howorth’s 

understanding of the role of the OIG and the support he 

has given our office during his time on the Board. Also, on 

August 13, 2015, Eric Satz became the newest member of 

TVA’s Board. We welcome Director Satz to the TVA Board 

and look forward to working with him toward our mutual 

purpose of making TVA better.

Finally, the TVA OIG lost a friend and supporter with the 

passing of former Tennessee Senator Fred Thompson on 

November 1, 2015. At a critical point in the life of the 

OIG, Senator Thompson stepped up and ushered through 

the Senate legislation to make the TVA IG a presidentially 

appointed position. Several years ago I was talking to the 

Senator and expressing my appreciation for what he had 

done, but he shrugged it off with typical Thompson humility. 

TVA is better because of Fred Thompson, and the OIG will 

cherish his memory.

Richard W. Moore

Inspector General
6 TVA OIG Semiannual Report 

On October 18, 2015, the TVA OIG marked 30 years of working to make TVA better. We pause to 

consider the difference that having an independent OIG has made in TVA history. Whatever value 

the OIG has added has been possible through a collaborative effort with the TVA Board and with 

TVA management. In many ways, our reflections on the accomplishments of the OIG over these 

30 years are an acknowledgment of the good work done by many. We have been privileged to 

serve with very dedicated and proficient Board members and TVA employees who have worked 

alongside of us to make TVA better.

Special Feature

OIG CELEBRATES 30 YEARS OF MAKING TVA BETTER
TVA OIG Semiannual Report 7

As a corporate body, TVA “wakes up” every morning 

knowing it has to earn the right to survive. The list of critics 

questioning the usefulness of TVA continues to grow. TVA 

has responded by going about the job of “keeping the 

lights on” in a workman-like fashion that often silences all 

but the harshest critics. TVA continues to contend with 

imposing challenges in carrying out its mission. Some of 

the challenges over the past 30 years included: (1) the 

shutdown and restart of the nuclear program in the late 

1980s, (2) predictable enterprise-wide cost cutting and 

downsizing over the years, (3) periodic attempts to improve 

the work environment and culture, (4) the financial and 

reputational damage caused by the Kingston ash spill, 

(5) defending attempts to privatize the agency, (6) complying 

with environmental regulations, and (7) conflicting views 

about how to manage TVA’s debt. 

We would like to think that some of what TVA has 

accomplished over the last 30 years was aided by the 

OIG. Some of the things TVA can take pride in include: 

(1) consistently providing reliable power at competitive rates, 

(2) the restart of Browns Ferry Unit 1, (3) the successful 

cleanup of the Kingston coal ash spill, (4) successfully 

expanding the power generation capabilities with 

combustion turbine generation, (5) reducing the number of 

aging fossil plants, (6) improving customer relationships, and 

(7) nearing completion of the first nuclear reactor in the 

21st Century at Watts Bar Nuclear Plant (WBN). 

This article will provide some background on why OIGs 

were created and, more specifically the creation of the 

TVA OIG, and give a brief history of the different periods 

throughout the OIG history, as well as a summation of what 

the OIG has been able to accomplish in carrying out the 

vision of Making TVA Better.

A Matter of Public 

Trust

In 1993, Professor Paul C. Light’s seminal work, Inspectors 

General and the Search for Accountability, quickly became 

the authoritative source on the work of IGs. Light traced 

the origins of the federal IG concept and the sometimes 

unrealistic expectations placed on IGs to “clean up 

government.” Congress expanded the number and size 

of the various OIGs in the late 1970s and into the 1980s in 

response to a series of scandals in federal agencies. 

As Paul Light explains, the IG Act of 1978 was designed to 

do basically four things: consolidate the scattered audit 

and investigation divisions into an IG office for each federal 

agency; ensure a measure of independence by putting 

presidential appointees into the jobs; give the IGs wide 

latitude in the scope of their work and in how to organize 

their offices; and provide greater resources for the war on 

fraud, waste, and abuse.

According to Light, the effectiveness of the IG concept 

should be measured in terms of the “quality of life produced 

by the government.” Whether a better quality of life was 

being ushered in by the IGs could be addressed by asking 

these four questions: (1) Is anyone listening? (2) Is the 

public more trusting? (3) Is the government less vulnerable 

to fraud, waste, and abuse? and (4) Is the government 

producing outcomes of greater public value? Light 

concluded that at least back in the early 1990s the results 

were mixed. 

With all due respect to Professor Light, those inquiries 

seem to impute far more power than IGs actually enjoy. 

IGs should be able to “move the needle” on the metrics 

that count in government, but much of the final results lie 

outside the scope of an IG’s work. Light recognized that 

measuring the effectiveness of OIGs is indeed tricky. Raw 

statistics rarely tell the whole story.

Ultimately, however, Professor Light’s conclusion that the 

work of an OIG should make life better for people seems 

right. For us, that means our work should improve the 

quality of life for the residents of the Tennessee Valley. It’s a 

matter of public trust. 

The OIG: Born in 

Controversy

In the mid-1980s, TVA was grappling with its encumbered 

nuclear program which led to the shutdown of all its nuclear 

operating plants, the cancellation of three unfinished plants, 
8 TVA OIG Semiannual Report 

and deferred construction on two other plants. To address 

these problems, a recommendation to hire a nuclear 

consultant and an IG was made. There were already 12 

OIGs created by the IG Act of 1978. Consequently, there 

was a pervasive sentiment at the time that if TVA didn’t 

create an OIG, Congress might consider creating one for 

them. As a result, Board Chairman Charles H. Dean and 

Director John B. Waters approved the OIG’s creation stating 

there was a need to have an independent organization 

within TVA to receive complaints that reported directly to 

the Board and to Congress. 

While the three-person Board approved the creation of 

the OIG with a vote of 2 to 0, one Board member, 

David Freeman, removed himself from the voting process. 

Mr. Freeman did not want to hinder progress in hiring an 

IG, but did not think an IG was a fit for a business like TVA. 

TVA employees were also divided on the decision to hire 

an IG. 

Despite its controversy, the TVA OIG was created with the 

following parameters outlined in the Board’s plan: The IG 

will be independent of TVA management, with a separate 

staff and budget, and will report directly to the Board. He 

or she can be removed from office only by the Board, 

which must justify the action to Congress. The IG will have 

access to all TVA records and can make “any investigation 

deemed necessary or desirable by the inspector general.” 

To maintain employee confidentiality, “the Board intends for 

the IG to receive in confidence allegations about any aspect 

of TVA.” 

Former TVA General Manager Bill Willis began compiling a 

list of names for consideration to fill the role of the IG, who 

would be named on December 1, 1985. 

First Inspector General

Norman A. Zigrossi, 1986 - 1992

Norm Zigrossi, prior to becoming TVA’s first IG, worked 

for the Federal Bureau of Investigation (FBI) for 23 years, 

including serving as the Special Agent in Charge of the FBI’s 

Washington, D.C., and San Diego, California, field offices. 

Mr. Zigrossi reported for duty in January 1986 as TVA 

continued to shut down its nuclear plants to address safety 

concerns. The basic problem with the nuclear program was 

soon recognized as a lack of effective management systems 

throughout the program. This would ultimately provide 

much of the basis for TVA OIG’s initial caseload. 

One of the first challenges facing the OIG involved 

nuclear-related employee concerns. TVA contracted 

with a company to investigate the issues in its nuclear 

program which resulted in more than 6,000 interviews of 

TVA employees and more than 5,000 concerns identified 

through those interviews. When TVA terminated its 

contract with that company, the concerns were transferred 

to the Nuclear Regulatory Commission (NRC) and the 

majority of the issues were ultimately turned over to the 

OIG, resulting in opening 605 investigations.

Shortly after the creation of TVA’s OIG, President 

Ronald W. Reagan appointed Marvin T. Runyon the ninth 

chairman of the TVA Board. Mr. Runyon had previously 

served in executive roles at Ford Motor Company and 

Nissan, where he and other leaders attempted to boost 

morale, build a strong culture, and focus on quality.1

 When 

Mr. Runyon stepped into his position at TVA, he “. . . found an 

agency that was badly dated in its operations and practically 

crippled by a failed attempt to develop nuclear power.”2

 

Further, TVA had invested $5 billion in the construction 

of three nuclear plants which were subsequently cancelled. 

Each of these events had serious negative impacts on 

TVA’s public perception of TVA, customer and employee 

relationships, and operations.

1

 R. Earl Thomas and Neil E. Watson, Marvin Runyon: A Commitment to Excellence, <http://www.anbhf.org/pdf/runyon.pdf>, accessed on May 5, 2013. 2 Fred S. Rolater, Marvin Runyon, Middle Tennessee State University, February 24, 2011.

Norman A. Zigrossi
TVA OIG Semiannual Report 9

To be able to continue as a viable organization, TVA needed 

to fundamentally change the way it conducted its business. 

Soon after beginning at TVA, Mr. Runyon determined that 

organizations were not aligned. Various groups within 

TVA were not cohesively working together toward one 

mission but were marching off in separate directions. 

Mr. Runyon outlined steps for change, such as reexamining 

TVA’s purpose and establishing a clear plan for the future; 

restoring TVA’s nuclear program; and improving 

leadership, teamwork, and communication within TVA. 

Mr. Runyon hoped these changes would result in “. . . greater 

responsibility and accountability in moving decision making 

to the lowest operating levels possible.”3

 TVA staffing levels 

at the height of construction was nearing 50,000 employees. 

Mr. Runyon began efforts to significantly reduce the size of 

TVA’s workforce. 

Also, in 1988, TVA froze wholesale rates, primarily due to 

dramatic rate increases during the previous two decades 

and eroding public confidence. The rate freeze would 

continue for 10 years until 1997. While the rate freeze 

may have improved TVA’s relations with its customers and 

residents of the Tennessee Valley in the short-term, it also 

increased TVA’s financial pressures later. 

During these challenging times at TVA, the OIG focused 

significant attention on investigating the nuclear-related 

employee concerns and identifying opportunities to achieve 

savings and cost reductions. One such opportunity was 

establishment of the contract preaward program which 

helped identify potential cost savings. Significant results 

from OIG audits also included the avoidance of a significant 

rate increase to customers as a result of a recommendation 

by the OIG to initiate a change in accounting policy. In 

addition, a number of program areas were identified where 

opportunities existed to improve effectiveness and achieve 

higher results. 

3

 Roger L. Cole and Larry A. Pace, Power to Change: The Case of TVA, Training and Development, August 1991, p. 60.

1986 TVA OIG Group Photo 
10TVA OIG Semiannual Report 

Additionally, Mr. Zigrossi quickly established a hotline—

known today as the EmPowerline (1-855-882-8585)—for 

TVA employees, contractor employees, or members of 

the public to anonymously or confidentially report any 

suspected waste, fraud, or abuse potentially affecting TVA. 

On October 18, 1988, President Reagan signed into law 

Public Law No. 100-504, IG Act Amendments, establishing 

the TVA OIG and 32 others as statutory IG offices. This law 

made the OIG responsible for TVA’s audit and investigative 

activities.

Second Inspector General

William L. Hinshaw II, 1992 - 1994

When Mr. Zigrossi resigned to become a TVA manager, 

William L. Hinshaw II, a 24-year veteran of the FBI, assumed 

the TVA IG role on May 1, 1992.

Mr. Hinshaw focused on initially establishing a greater 

OIG presence in the Valley as TVA operations and 

personnel were scattered throughout the region. So, in 

1992, he directed the opening of satellite offices—first in 

Chattanooga, Tennessee, and Huntsville, Alabama, and then, 

in Memphis, Tennessee. Mr. Hinshaw was also focused on 

making the OIG more efficient and effective in the delivery 

of the OIG mission. Some of these actions included the 

formation of Quality Action Teams to address, among 

other things, OIG employees’ issues and concerns about 

their career paths, performance appraisals, and employee 

development. 

In 1993, he created an Inspections unit utilizing staff from 

Audits and Investigations. The intent of the Inspections team 

was to foster innovative approaches that were responsive 

to management’s needs and provide timely services to 

enable management to promote economy, effectiveness, 

and efficiency within their own programs. The approach 

was designed to build constructive relationships with TVA 

management, assuring them that the OIG’s primary goal 

was to effect positive change rather than finding fault for 

noncompliance with existing rules and regulations.

TVA’s challenges were evolving. In the 1990s, legislative 

action drove TVA’s renewed focus on becoming more 

competitive in the utility industry. The Energy Policy Act of 

1992 appeared to be paving the way for requiring utilities 

to wheel power from one another. Wheeling power would 

involve TVA transmitting power generated by another 

utility using TVA transmission lines while the customer pays 

the generating utility, not TVA, for the power. TVA was 

exempted from the Energy Policy Act of 1992 for power 

sold and consumed within the TVA “fence.” However, there 

was legislative movement towards eliminating the TVA 

exemption, thus making TVA subject to wheeling power 

and introducing competition into the “fence.” Additionally, 

neighboring private utilities, concerned that TVA’s position 

as a federal utility would provide an unfair advantage in 

a deregulated marketplace, organized a lobbying group 

called TVA Watch. In 1995, TVA commissioned a report 

called “The Ties That Bind” which assessed the “. . . financial 

status, generating capacity and likely competitors within the 

region, and concluded that the “fence should come down.” 

Intended to emphasize TVA’s self-supporting nature, the 

report was viewed by TVA Watch as a preemptive strike 

indicating TVA planned to target other utilities’ customer 

bases. Deregulation was expected to become reality and 

would plunge TVA into a competitive environment. Even if 

deregulation did not come to fruition immediately, TVA saw 

the need to become more competitive.

Significant OIG reviews during this time included a joint 

audit and investigation that resulted in $8.37 million 

recovery from TVA’s medical plan administrator, $10 million 

in questioned costs related to price adjustment claims, 

and a review of the technology brokering program. The 

technology brokering program review resulted in 

Mr. Hinshaw testifying before Congress on TVA’s role 

William Hinshaw
TVA OIG Semiannual Report11

in using cooperative agreements for procurement of 

unauthorized services for the U.S. Department of Defense. 

Third Inspector General

George T. Prosser, 1994 - 2000

On April 1, 1994, George T. Prosser became TVA’s third 

IG and the first OIG employee to become the IG after 

having served in the office as the Assistant Inspector 

General, Investigations (AIGI) and as the Manager of Fraud 

Investigations. Prior to his roles in the TVA OIG, Mr. Prosser 

was a 15-year veteran of the FBI—serving as a supervisory 

special agent in the Terrorism Section at FBI Headquarters 

and as the Senior Special Agent in the FBI’s Chattanooga 

resident agency. While serving as the AIGI, Mr. Prosser’s 

efforts in detecting fraud and abuse in TVA’s workers’ 

compensation program received a public service award 

from the President’s Council on Integrity and Efficiency 

(PCIE)—an IG community group. 

During the mid to late 1990’s, TVA continued to deal with 

the challenges and controversies related to becoming more 

competitive in a deregulated market. As deregulation was 

being discussed, Enron began operations of some of its 

gas-fired combustion turbine plants located within the TVA 

fence. Additionally, the decade-long rate freeze that began 

in 1988 improved relations with TVA customers in the 

short-term, but it also resulted in unforeseen consequences. 

Presumably, the loss of potential revenue associated with 

the 10-year rate freeze placed pressure on TVA to cause 

it to increase its debt borrowing, resulting in high financing 

costs. The Office of Management and Budget began 

pressuring TVA to pay back existing debt and limit the 

growth of debt, at a time when environmental regulations 

were increasing in complexity and adding additional costs. 

In July 1997, TVA issued a 10-year-business plan. The plan 

attempted “. . . to position TVA to be more competitive 

by, among other things, reducing its high debt servicing 

and other fixed costs.” The ultimate objective of the plan 

was to offer competitively priced power and reduce debt 

by about one-half (to approximately $14 billion) by 2007. 

This plan proved to be unrealistic due to a number of 

factors including the U.S. Environmental Protection Agency 

requirements pursuant to the Clean Air Act to retrofit the 

fossil plants with expensive emissions control equipment. 

Finally, internally, TVA faced a projected high attrition rate 

and loss of long-term employees and their knowledge. 

Change was on the horizon, and TVA needed a navigation 

plan for the future.

During this time, Congressional concerns arose related 

to a number of TVA management practices, including 

advertising, sole-source contracting, special events and 

entertainment, use of TVA airplanes, and other management 

practices. Congressman Zach Wamp engaged the OIG to 

review and provide greater oversight in all of these areas. 

Other challenges during this time included the indictment 

of the Chief Operating Officer who was later acquitted and 

controversy around the creation of the Center for Rural 

Studies which was established by TVA and funded with a 

$30 million irrevocable trust. TVA subsequently revoked 

the funding and dissolved the organization. 

During Mr. Prosser’s time as IG, the TVA OIG worked 

on some impactful projects that significantly benefitted 

TVA. Some of the more significant projects included the 

following:

• In 1994, the OIG completed a comprehensive Concerns 

Resolution Staff program review. Then, in 1995, TVA 

Nuclear management asked the OIG to review the 

program at WBN due to the NRC’s interest in the 

program. In both cases, the OIG’s findings were generally 

positive. That September, an OIG special project team 

briefed senior NRC officials in Washington, D.C., on the 

results of the review. These reviews have continued 

through the ensuing years.

George T. Prosser
12TVA OIG Semiannual Report 

• During 1993 and 1994, the OIG participated in the 

“Federal Employees Compensation Act (FECA) Fraud 

Deterrence Group,” which was selected to receive the 

Secretary of Labor’s Exceptional Achievement Award for 

1995. The group played a significant role in the enactment 

of Public Law 103-329, which bans payment of FECA 

benefits to claimants who are convicted of defrauding the 

program, suspends payment of benefits to incarcerated 

felons, and changes the FECA fraud statute from a 

misdemeanor to a felony. 

• In 1997, special agents from the OIG became part of a 

newly formed federal and state Environmental Crimes 

Joint Task Force. This joining of forces soon bore fruit 

with three convictions in 1998. The work of the task 

force has continued through the years resulting in many 

more convictions for environmental crimes affecting TVA 

waterways and land.

• With year 2000 approaching, 1997 was the year the OIG 

began to review TVA’s year 2000 computer rollover 

activities, the success of which was critical to prevent 

disruption in the delivery of electric power. Any type 

of system failure could have resulted in anything from 

small customer inconvenience to electric power plant 

shutdown, affecting millions of customers. OIG reviews 

helped to assure the smooth transition to the 21st 

Century.

In 1999, a major event occurred that called into question 

whether the former TVA Board Chairman was trying to 

impede the independence of the IG, which was a TVA 

Board-appointed position. U.S. General Accounting Office, 

now known as the Government Accountability Office 

(GAO), investigated allegations against the former TVA 

Board Chairman as well as allegations the Chairman made 

against the IG related to misuse of a TVA credit card. GAO4

found (1) the Chairman’s actions “...could be viewed as an 

attempt to undermine the independence of the IG” and 

(2) “... no evidence of TVA credit card misuse by the IG.” 

As a result of this event, the late Senator Fred Thompson 

sponsored a bill to make the TVA IG a presidential 

appointment which Congress later enacted into law. 

Mr. Prosser stepped aside as IG effective August 14, 2000, 

though he remained as an advisor to the new IG for several 

months. On September 14, 2000, an IG community group 

called the Executive Council on Integrity and Efficiency 

(ECIE) honored Mr. Prosser for outstanding contributions to 

the IG community.

Fourth Inspector General

Richard F. Chambers, 2000 - 2002

Effective August 14, 2000, Richard F. Chambers became the 

fourth TVA IG. Mr. Chambers previously was at the U.S. 

Postal Service OIG, where he served as Assistant Inspector 

General of Audits and then Deputy IG. Prior to the Postal 

Service, Mr. Chambers worked for more than 20 years in 

positions of increasing audit and management responsibility, 

primarily with the U.S. Army, including as Director U.S. 

Army Internal Review and Chief, Internal Review and Audit 

Compliance, U.S. Forces Command.

During Mr. Chambers’ term, a number of Congressional 

concerns were raised. TVA OIG responded to several 

requests from congressmen to review aspects of interest in 

TVA operations.

• At Congressman Zach Wamp’s request, the OIG 

performed an updated review of TVA management 

practices in five areas: consulting contracts, advertising, 

special events—including barge events, executive air 

transportation, and the relocation of personnel and 

programs to Nashville, Tennessee.

Richard F. Chambers

4 U.S. GeneralAccounting Office, Tennessee Valley Authority: Facts Surrounding Allegations Raised Against the Chairman and the IG, September 15, 1999 

 http://www.gao.gov/products/OSI-99-20.
TVA OIG Semiannual Report13

• At the request of Senator Mitch McConnell, the OIG 

reviewed selected issues related to TVA’s power rates 

and costs.

• At the request of Senator Jeff Sessions, the OIG assessed 

the reasonableness of TVA’s decision to consolidate 

operations in Nashville in the Highland Ridge Tower 

(HRT) and build-out costs incurred by TVA. The OIG 

found TVA’s decision to select HRT was not the least 

costly alternative, and TVA incurred some costs associated 

with the HRT build-out which were unnecessary or 

unreasonable.

Internally, Mr. Chambers created a separate IT Audit group 

to focus on cyber security and other IT-related risks, 

established a computer forensics lab, and focused on staff 

development. 

Shortly after Mr. Chambers took the reigns as TVA IG, on 

November 1, 2000, President Bill Clinton signed Public Law 

106-422, designating the position of TVA IG as presidentially 

appointed. Mr. Chambers retired from federal service on 

January 25, 2002. Pursuant to the Federal Vacancies Reform 

Act, the First Assistant to the IG, G. Donald Hickman, 

assumed the role of Acting IG. 

Acting Inspector General

G. Donald Hickman, 2002 - 2003

Subsequent to the tragic events of September 11, 2001, a 

major effort of the OIG was the initiation of a number 

of reviews to validate the effectiveness of TVA’s security 

procedures and controls. These efforts were concluded 

under the direction of Acting IG Hickman.

The initial effort was a preliminary survey to assess the 

adequacy of TVA’s security plans and actions taken in 

response to the terrorist attacks and related threats. The 

OIG found that TVA was taking or had taken appropriate 

measures to mitigate the risks associated with the security 

of TVA’s nuclear and nonnuclear facilities. The OIG also 

made a major commitment to assist TVA management in 

developing a cost-effective plan to evaluate TVA computer 

security procedures and controls.

A considerable amount of legislation had been passed 

requiring federal agencies to review and improve security 

of its information, e.g., Federal Information Security 

Management Act (FISMA), and to report annually on its 

action plans for improvements. The same also requires 

OIGs to independently evaluate and report on agency 

compliance. A group of TVA OIG employees became 

part of an IT Security Assessment project team and 

by March 31, 2003, the team had conducted 23 selfassessments and 2 vulnerability assessments of TVA 

information security measures.

In 2002, an OIG audit team was given an Award of 

Excellence by the PCIE for the team’s work in the area of 

TVA Long-Term Bulk Power Trading. The team produced 

two highly complex reviews of TVA’s weekly, monthly, 

seasonal, annual, and multiyear trading in the wholesale 

electricity market. The reviews were especially timely, as 

several power marketers had either filed for or were on the 

brink of bankruptcy. In addition, Enron and other utilities 

were facing scrutiny due to questionable energy trading and 

practices.

The year 2002 saw the passage of the Homeland Security 

Act. Section 812 of the Act provided for law enforcement 

authority for TVA special agents under guidelines to be 

issued by the U.S. Department of Justice. To ensure a 

smooth transition, the OIG initiated and developed an 

intensive law enforcement skills refresher training program. 

In addition, the OIG began participating on the Joint 

Terrorism Task Force led by the FBI’s Knoxville Field Division.

Donald Hickman
14TVA OIG Semiannual Report 

Additionally, in 2002, the Sarbanes-Oxley Act was enacted 

in response to the collapse of Wall Street giant Enron 

and other corporate failures and malfeasance. The Act 

was intended to protect investors by, among other things, 

requiring companies to make new disclosures on internal 

controls, ethics codes, and the makeup of their audit 

committees. Although the Act did not apply to TVA, 

TVA began a program to review controls and build the 

framework that would allow TVA to voluntarily comply, 

where possible with its provisions. In support of TVA, 

the OIG performed reviews to help assess TVA’s controls 

over financial reporting. Finally, the OIG assumed budget 

responsibility for TVA’s contract for external audit services 

and became the technical contract manager for the 

contract. 

On April 22, 2003, President George W. Bush announced 

his intention to nominate Richard W. Moore to be the next 

TVA IG. Mr. Hickman returned to his position as the AIGI 

after confirmation by the U.S. Senate of Mr. Moore.

Fifth Inspector General and

First Presidentially Appointed

Richard W. Moore, 2003 - Present

Effective May 9, 2003, Richard W. Moore became TVA’s 

first presidentially appointed IG. Prior to becoming the IG, 

Mr. Moore was an Assistant U.S. Attorney in the southern 

district of Alabama where he was Chief of the Criminal 

Division and the Senior Litigation Counsel for the U.S. 

Attorney’s Office. After September 11, 2001, he also served 

as the Anti-Terrorism Task Force Coordinator. He was an 

Atlantic Fellow in Public Policy at Oxford University, Oxford, 

England, while still serving in the U.S. Justice Department. 

In the dozen-plus years Mr. Moore has served as TVA’s 

IG, his primary initiatives can be characterized by: (1) a 

focus on risk-based audits and investigations that produce 

positive change for TVA, (2) building trust with stakeholders, 

and (3) investing in a sustainable culture of innovation and 

continuous improvement for the OIG team.

Risk-Based Audits, Evaluations, and 

Investigations

The test for an OIG is whether its audits, evaluations, and 

investigations reduce the level of risks for a federal agency 

that could otherwise impede the accomplishment of the 

agency’s mission. That starts with an assessment of the 

effectiveness of the Enterprise Risk Management (ERM) 

of TVA. The OIG, through its audits, evaluations, and 

investigations, has encouraged TVA to develop a more 

robust enterprise risk program. 

TVA’s ERM program has evolved over the years. In 1999, 

the OIG recommended TVA establish an ERM program 

and create a Chief Risk Officer position. Since then, 

the OIG has reviewed the program in 2003, 2008, and 

most recently, 2014. In 2008, the OIG review found the 

program needed to be driven further down into the 

organization. Three months later, the Kingston ash spill also 

demonstrated this same need. The Kingston disaster serves 

as an example of the importance of a properly designed 

ERM program supported by a healthy culture. The OIG 

report on Kingston pointed to significant risks that were 

associated with ash management and known internally as 

early as 1987, but that information was not captured in any 

risk matrix. The 2014 review found TVA had significantly 

improved its ERM program; however, several areas for 

improvement were identified based on best practices that if 

not addressed could prevent TVA from having a sustainable, 

viable, and effective ERM program.

During Mr. Moore’s tenure, TVA has faced many challenges 

and continues to evolve both organizationally and culturally. 

The OIG has noted many areas where significant program 

improvement were warranted and made recommendations 

for improvement over the years. These areas have included 

supply chain, IT management, cyber security, capital project 

Richard W. Moore
TVA OIG Semiannual Report15

management, organizational effectiveness, and various other 

major programs within TVA. 

Information Technology and Supply Chain

In some instances the OIG’s work has resulted in major 

program changes including the discontinuation of some 

programs. In other situations, the OIG continues to work 

with the organizations in ever changing conditions that 

result from technology advancements, organizational 

restructuring, and changes in leadership and management 

processes and controls. For example, the OIG has a 

continuous presence in the areas of supply chain and 

IT (including cyber security). The OIG has developed a 

trusting working relationship with these organizations while 

providing ongoing reviews and assistance in areas such 

as contract preaward and compliance reviews, process 

improvement reviews, and assurance that systems are 

operating as intended. 

• In the area of supply chain, our compliance audits and 

preaward reviews have on average resulted in the 

identification of about $30 million in annual questioned 

costs and funds to be put to better use. Additionally, 

many program improvement recommendations 

have been made including increased emphasis on 

employee training and development, quality assurance, 

and data analysis in supply chain areas of (1) contract 

administration, (2) contract awards, and (3) invoice 

review and approvals. While progress has been made, 

the OIG work continues as TVA restructuring and staff 

reductions continue to present risks to the Supply Chain 

organization’s progress.

• In the area of IT and cyber security, the OIG maintains 

a continuous presence because of the ever-changing 

technology that constantly increases the risk of cyberattacks and regulatory landscape that increases the risk of 

fines and penalties due to noncompliance. A main focus 

of the OIG has been to provide some level of assurance 

testing around the critical infrastructure of TVA assets 

as well as the protection of personal data of employees 

and contractors to ensure these systems and data are 

being adequately protected. Another focus area has been 

the overall effectiveness of the IT organization and the 

effectiveness of their programs. The OIG has performed 

substantial reviews of the overall IT organizational 

effectiveness at three different points in time: 2008, 2011,

and 2015. While more recent audit results have shown 

significant improvement, ever-evolving technology, major 

personnel changes, and other technological challenges 

continue to pose a level of risk that requires the attention 

of both TVA management and the OIG. Although the 

issues are daunting, TVA management has demonstrated a 

commitment to make the necessary changes.

IGs Norm Zigrossi, Donald Hickman, Richard Moore, William Hinshaw and George Prosser
16TVA OIG Semiannual Report 

Collaboration with TVA on Fraud Risk 

Assessments

In 2004, the OIG began conducting fraud risk assessments 

throughout TVA, i.e., a process for business process owners 

to identify and analyze fraud risk factors that may be 

common to general business practices and also specific 

to the organization and its operations. With the strong 

support of TVA management, the fraud risk assessment 

process has been successful in identifying potential risk areas 

and mitigation strategies for a number of TVA organizations. 

Working collaboratively with TVA management, the 

OIG assisted them in identifying a number of areas 

where controls could be improved. TVA management 

subsequently developed remediation plans for those areas.

As noted previously, the OIG has focused on many 

significant challenges TVA has faced over the years. 

Discussed below are some highlights of the OIG work 

during Mr. Moore’s tenure where significant problem areas 

were identified and recommendations for improvement 

were made. 

• Kinder Morgan Case Results in a 

$25 Million Settlement

 A joint investigation and audit team investigated whether 

TVA was defrauded by three Kinder Morgan limited 

partnerships (collectively “Kinder Morgan”) that provided 

coal and other energy transportation and distribution 

services at two coal terminals. The OIG received a tip 

about how Kinder Morgan was cheating TVA. In this case, 

TVA and other customers’ coal was shipped by rail to 

terminals, where it was offloaded, stored, and eventually 

loaded onto barges for delivery. Kinder Morgan used 

two different weighing methods to show it was shipping 

out the same amount of coal as it had received. Kinder 

Morgan claimed the “excess” coal, therefore, belonged to 

it and it had the right to sell the coal and keep the profit. 

TVA’s usual fly-over precautions did not detect the fraud. 

The OIG investigation led to a 2007 civil settlement in 

excess of $25 million. 

• Contractor Lies About the Number of 

Injuries on TVA Nuclear Sites

In 2009, TVA contractor Stone & Webster Construction, 

Inc. (SWCI), agreed to pay $6.2 million to resolve a 

contract fraud investigation. SWCI, one of TVA’s largest 

contractors during the period under review, was providing 

maintenance and modification work at TVA’s nuclear 

power plants. SWCI records understated the number 

and severity of work-related injuries during the years 

2004 through 2006. SWCI presented false or fraudulent 

claims to TVA for reimbursement for certain performance 

fee bonuses SWCI claimed for meeting safety goals at 

the three TVA nuclear plants located in Alabama and 

Tennessee, totaling nearly $3.1 million. The settlement 

provided that SWCI would pay the U.S. $6.2 million, the 

equivalent of double damages. In addition to the 

$6.2 million payment, SWCI entered into a 

comprehensive two-year Corporate Integrity and 

Monitoring Agreement with the OIG to ensure that 

SWCI implements a Compliance and Ethics Program 

applicable to all work or service provided to TVA and that 

SWCI fully complied with TVA’s policies and directives 

related to its contracts. This was the first Corporate 

Integrity and Monitoring Agreement in TVA history 

between the OIG and a TVA contractor.

• Review of TVA’s Maintain and Gain 

Lakeshore Management Program

In August 2008, numerous newspaper articles questioned 

the fairness of a TVA Maintain and Gain transaction 

granting water access to The Cove at Blackberry 

Ridge, LLC (Blackberry)—a 4,200-acre water-lined 

resort development. Blackberry’s primary investor 

was a congressman who served on the U.S. House 

Transportation Committee’s Subcommittee on Water 

Resources and the Environment. This Subcommittee 

provided formal oversight over TVA. TVA’s Maintain and 

Gain Lakeshore Management Program was designed to 

allow consideration of proposals to obtain lake access 

rights at the landowner’s property by swapping access 

rights already available at other properties the landowner 

possessed. Questions were raised about whether the 

congressman used his position to influence TVA’s decision 

to grant Blackberry’s request for water access. Because 
TVA OIG Semiannual Report17

doubt was cast on the fairness of a TVA process, the TVA 

OIG conducted an inspection. We found no evidence 

of pressure on TVA from the congressman to give 

Blackberry water access on this lakefront project. 

As a result of that inspection, TVA and TVA’s Board 

agreed to develop a policy to provide a means to identify 

the potential of actual or apparent conflicts of interest 

or the appearance of the exertion of undue influence 

on the part of a person applying for a TVA benefit. TVA 

developed the “Obtaining Things of Value from TVA 

Protocol” to ensure that when something of value is 

being sought from TVA, the decision-making process is 

“fair, impartial, transparent, and evenhanded, both in fact 

and in appearance.” 

• Kingston Ash Spill Reviews

In 2009, TVA was continuing to deal with the financial 

consequences brought about by the December 2008 

Kingston ash spill as it cleaned and restored the 

community to its pre-spill state. That year, the OIG issued 

two significant reports in regard to the cause of the spill 

and how TVA was responding to the cleanup. 

° An initial OIG review of TVA’s response to the 

Kingston ash spill found: (1) TVA had not properly 

implemented the National Incident Management 

System, which hampered communications and delayed 

certain emergency response actions following the 

spill; (2) TVA’s quick response to the media and public 

inquiry resulted in the release of inaccurate and 

inconsistent information, which resulted in criticism of 

TVA and caused reputational harm to the company; 

and (3) while TVA responded effectively to victims 

affected, failure to timely communicate TVA’s claims 

policy and decisions increased settlement expectations 

for some.

° Our second review of the Kingston ash spill 

focused on a root cause study performed by a firm 

contracted by TVA for that purpose. The contract 

with TVA’s expert restricted him from examining 

TVA’s management of coal ash. We found: (1) the 

root cause analysis was handled by TVA in a manner 

that avoided full transparency and accountability 

and was done to preserve TVA’s litigation strategy; 

(2) TVA was aware of “red flags” raised over a long 

period that signaled the need for safety modifications 

to the ash ponds which, if addressed, could possibly 

have prevented the spill; (3) factors other than a 

faulty “slimes” layer identified by TVA’s expert as the 

trigger for the spill may have been of equal or greater 

significance; (4) despite internal knowledge of risks 

associated with the ash ponds and discussions of 

placing the ponds under TVA’s Dam Safety Program, 

thereby subjecting the ponds to more rigorous 

2013 TVA OIG Group Photo
18TVA OIG Semiannual Report 

inspections and engineering, TVA’s risk management 

program failed to identify ash management as a risk; 

and (5) attitudes and conditions that emanated from 

a legacy culture resulted in ash being relegated to the 

status of garbage at a landfill rather than treated as a 

potential hazard to the public and the environment. 

TVA management generally agreed with OIG 

recommendations to address these findings.

• First Debarment in TVA History

An OIG investigation found that a TVA technical contract 

manager received money from a TVA contractor. 

Criminal proceedings were taken against the former 

TVA technical contract manager. In addition, a report of 

administrative inquiry was issued to TVA management 

regarding the actions of the contractor, Holtec 

International, Inc.,(Holtec) a company that supplied casks 

for spent nuclear fuel.

In response to the report, TVA created the position of 

Suspension and Debarment Officer. Based on the OIG 

investigation, TVA’s Suspension and Debarment Officer 

issued the first debarment action in TVA history. Holtec 

received a 60-day debarment in 2010 and agreed to pay 

a $2 million administrative fee to TVA. Holtec was also 

required to appoint a Corporate Governance Officer and 

an independent monitor (at the contractor’s expense) to 

gauge what progress in business ethics the company was 

making, if any. 

• Review of WBN Unit 2 - Cost and Schedule

In August 2007, the TVA Board approved the completion 

of WBN Unit 2, at a cost of $2.5 billion to be completed 

in 60 months. The TVA OIG, through joint audits and 

investigations, determined TVA’s WBN construction was 

significantly behind schedule and grossly over budget, 

despite information released by TVA senior management 

to the contrary. We reported that employees and 

contractors who knew the information being sent to the 

Chief Executive Officer and to the Board was erroneous 

were silenced by TVA executives at WBN. 

Perhaps equally critical to the resolution of the WBN 

problem was whether TVA would take responsibility for 

what had happened. The OIG was in constant dialogue 

with TVA officials about what TVA would say publicly 

about the reason that the costs for the project would 

be so much higher and it would take so much longer 

to complete the project. The Kingston experience had 

demonstrated how a public institution can lose the trust 

of its stakeholders by not being transparent about a 

significant event. Whether TVA would acknowledge that 

TVA management was ultimately responsible for the 

errors in the WBN project as opposed to TVA claiming 

that, as they did in Kingston, some intervening force had 

caused the problem was an open question. 

TVA Chief Executive Officer Tom Kilgore ultimately held 

a press conference in April of 2012 and said that TVA 

had essentially miscalculated the costs and accepted 
TVA OIG Semiannual Report19

responsibility for the error. This demonstrated a new 

effort by TVA management to be transparent and 

accountable with its stakeholders. As a result, TVA 

replaced senior management on the project, performed 

a comprehensive review of the project, and publicly 

reported the revised schedule5

 and budget numbers. 

One of the TVA executives involved later pled guilty to 

unrelated federal criminal charges from a separate case 

investigated by the OIG. 

• Browns Ferry Nuclear Plant 

Extended Power Uprate

In 2011, at the request of TVA management, the OIG 

reviewed the causes of the delays in the Browns Ferry 

Extended Power Uprate (EPU) project to increase 

generation capacity at Browns Ferry Nuclear Plant. 

The project began in 2001 and was expected to be 

completed in two to four years based on industry-wide 

experience; however, the project remains incomplete. 

The OIG concluded TVA senior management’s decisions 

early in the EPU project were the most significant 

factor in the lack of progress in the project. Specifically, 

in 2001, senior management directed staff to keep the 

EPU proposal within a certain cost, requiring the staff 

to report an artificially optimistic scope and ultimately, 

leading a contractor to propose use of a methodology 

that was not approved by the NRC. Additionally, senior 

management ignored concerns of TVA engineering 

staff related to the feasibility and safety of the proposed 

methodology. 

TVA spent about $97 million on direct EPU costs and 

$26.5 million on incremental fuel costs since 2001. 

Additionally, TVA’s marginal costs for replacement power 

ranged from $373 million to $448 million as a result 

of not achieving the EPU by the targeted dates. TVA 

executive management acknowledged cultural issues and 

stated they were committed to improving the culture 

of TVA through transformation initiatives and other 

actions including creating and maintaining an environment 

where all employees feel comfortable raising concerns 

to management or through any of the multiple available 

avenues.

Building Trust with Stakeholders

The work of the OIG is one of the most complex in the 

federal government due in part to the often competing 

interests of OIG stakeholders. In enacting the IG Act, 

Congress structured the powers and responsibilities of 

the IG so as to require intense communication not only 

of the “what” but the “how.” In other words, both TVA 

and Congress are as interested in “how” the IG conducts 

audits, evaluations, and investigations as they are in the 

types of audits, evaluations, and investigations that we 

do. At the heart of this communication both with TVA 

and with Congress is often an unspoken question around 

what the intent of the IG is in allocating resources to one 

area of audit or investigation but not another. Here, over 

communicating becomes essential. 

5 In April 2012, the TVA Board approved a revised cost estimate and schedule for completion of WBN Unit 2. The revised estimate was between $4.0 and 

 $4.5 billion and was forecasted to come on line by December 2015 according to 2012 reports filed by TVA with the Securities and Exchange Commission. 
20TVA OIG Semiannual Report 

Every year the OIG sits down with the TVA Board and 

TVA management to discuss what the perceived high 

risks are for the agency. Given that the OIG has limited 

resources, we have a vested interest in reaching as much 

agreement as possible about what areas to target with 

those limited resources. We always have to exercise our 

best independent judgment about how we do this, but we 

regularly follow up on recommendations made by either 

the TVA Board or TVA management as to areas of focus. 

For the TVA OIG, Congress occasionally expresses an 

interest in the OIG audits, evaluations, and investigations 

that give the best assessment of how TVA is doing. 

Occasionally, Congress will ask for specific work to be done 

in a particular area. Again, like with the TVA Board and TVA 

management, we try to accommodate Congress whenever 

possible while maintaining our independent judgment as an 

organization led by a presidential appointee of the 

Executive Branch of the federal government. 

A complicating factor for the TVA OIG, like all federal IGs, 

is the statutory requirement that the work of the OIG be 

made public. Transparency and accountability are hallmark 

characteristics of any OIG and publishing our work on a 

public Web site is an essential part of that transparency and 

accountability. What is included in an OIG report and the 

tone used to describe what we find has been an on-going 

matter of interest for both TVA and Congress. Here, we 

have made it a practice to listen carefully to all sides and 

then use our best judgment about essentially what we 

believe is the right thing to do under the circumstances. 

Because our work often involves examining “gaps” in TVA 

processes that put the agency at risk, these “gaps” can cause 

TVA to suffer reputational harm once they are made public. 

When we publicly report on matters that cause TVA to 

come under public scrutiny, a natural reaction at TVA has 

sometimes been to question the intent of the OIG. While 

we can only do so much to lessen any suspicion of bad 

intent on our part, we have made it a practice to ask TVA 

or Congress to sit down with us and have as much healthy 

dialogue as possible.

Being objective and accurate about the facts has been 

our focus and ultimately has served the TVA OIG well. 

Our commitment to continually ask for more dialogue 

with both TVA and Congress springs from our belief that 

good government travels on trust. Our hallmark is being 

trustworthy. We do that by showing respect for opposing 

opinions; seeking out those who disagree with us to provide 

clarification, and ultimately by sticking to the facts. This 

“how” we do business is part of our identity and accounts 

for the good faith, on-going dialogue that we continue to 

enjoy with our stakeholders.

Investing in a Sustainable Culture 

of Innovation and Continuous 

Improvement for the OIG Team

Research shows that engaged employees get better 

results. This is true for TVA employees, and it is true 

for OIG employees. TVA and the OIG both rely on 

employee engagement surveys to assess how engaged their 

employees are. Due to the hard work and dedication of 

OIG employees, the 2015 Office of Personnel Management 

(OPM) Viewpoint scores for the TVA OIG show a highly 

engaged workforce. We believe that accountability for any 

government agency includes being transparent about the 

culture of its people. The TVA OIG results are available on 

our Web site at http://www.oig.tva.gov/2015_overall_report.

pdf. 

In 2014, American University in conjunction with the 

Council of the Inspectors General on Integrity and 

Efficiency (CIGIE) initiated a case study of the leadership 

principles that fostered such a healthy culture at the TVA 

OIG. The transition at the TVA OIG from a traditional 

“top down” and somewhat autocratic organization to a 

collaborative leadership organization produced a highly 

aligned and motivated team. This case study highlights the 

benefits of creating a healthy work environment that frees 

up employees to give their best to each other and to the 

organization.

The TVA OIG transformation has been good for TVA. Our 

engaged employees regularly give the type of discretionary 

effort that translates into better audits, better evaluations, 

and better investigations. Mutual trust and mutual respect 

within the OIG has been transported to our interactions 

with TVA employees. Starting at a trusting place enables 
TVA OIG Semiannual Report21

OIG employees and TVA employees to work better 

for the ultimate beneficiaries of their collective good 

work: the residents of the Tennessee Valley. We view this 

transformation as one of the most significant developments 

in the history of the TVA OIG. Sustaining that positive 

change requires empowering employees to invest in a 

healthy culture that is ultimately better for them and 

recognized as such by them. This is neither theory nor 

chance. It is hard work. It is mutual commitment of both 

OIG leadership and OIG employees. TVA OIG employees 

deserve the recognition they have received for creating a 

healthy and productive culture.

Fontana Lake

Photo Credit Frank Kehren
22TVA OIG Semiannual Report 

12,600

Cases & Reviews Identified Costs Recovered/Saved

$2.35B $1.05B

1985 1988 1996 

YEARS PROJECTS/CASES SUMMARY 

Over the past 30 years, OIG reviews have focused on helping TVA improve the eciency and 

eectiveness of TVA operations, save or recover money, and serve as a deterrent to misconduct 

and fraud. While the results from some reviews are dicult to quantify, the results impacted 

many areas of TVA including: (1) improving key business processes; (2) improving governance 

functions and regulatory activities; (3) improving the protection of critical infrastructure and 

privacy information; and (4) improving the eectiveness of risk mitigation activities on areas of 

high risk. Even without a monetary value attached, these reviews provide information to help 

TVA operate in the most ecient manner and avoid losses from risks that are not properly 

mitigated. In addition, much of our reviews, primarily in the contract compliance audits and 

contract preaward reviews and certain investigations, have helped TVA recover and save 

substantial money. Highlights of audit, evaluation, and investigation activities as well as 

results follow.

TVA OIG was established 

and Norman A. Zigrossi 

was named TVA’s rst IG

President Ronald Reagan 

signed legislation making 

the TVA OIG and 32 others 

statutory IG oces

TVA OIG Special Agents 

become deputized by 

the U.S. Marshal

Identied Costs: Sum of investigative waste identied, investigative recoveries/projected savings and audit/evaluations ndings.

Recovered/Saved: Sum of investigative recoveries/projected savings and audit/evaluation recoveries/savings.

1 2

+

1

2
TVA OIG Semiannual Report23

2000 2002 2003

Prosecutive Actions Management Actions

Investigations Audits/Evaluations

2,700+ Projects Completed

$507M

$219M

$1,622M

 Recoveries/Savings

$826M

 Findings

PROJECTS/CASES DETAIL YEARS

 Waste identied

 Recoveries/Projected Savings

In November 2000, President 

Bill Clinton signs into law a bill 

making TVA’s Inspector General a 

presidentially appointed position

The Homeland Security Act is 

passed and gives law 

enforcement authority to TVA 

OIG Special Agents

Richard Moore becomes the rst 

presidentially appointed TVA IG

9,900+ Cases Closed

Investigative recoveries/projected savings: Sum of investigative recoveries and savings/projected savings .

Audit/Evaluation ndings: Sum of questioned costs and funds to be put to better use.

Audit/Evaluations recoveries/savings: Sum of questioned costs recovered by TVA and savings realized by TVA.

3

4

5

900+

6

 Process 

 Improvements

 Debarred 

 Vendors

332

Convictions

24

 Pre-Trial

Diversions

1,270

 People

Disciplined

342

Indictments

2,100

600

Reports 

 Issued

 Other 

Projects

3

4

5
24TVA OIG Semiannual Report 

1999

2000

ECIE Awards

2001

ECIE Awards

2002

2005

PCIE Award

PCIE Award

2006

PCIE Awards

Special Agent James F. Farr received a citation for outstanding work in a Health Care 

Fraud Case presented by the Special Agent in Charge of the Knoxville Division of the FBI.

George T. Prosser, IG, for outstanding contributions to the IG community.

G. Donald Hickman, AIGI, Investigations, for his leadership and sustained contributions 

to the law enforcement community.

Tool Management Program Team for outstanding teamwork and eorts in a complex 

audit/investigation of fraud related to TVA’s Tool Management Program.

Work in resolving a complex product substitution case.

Workers’ Compensation Team for their achievements in identifying and eliminating fraud in 

TVA’s workers’ compensation program.

Environmental Crimes Joint Task Force for outstanding work in ghting environmental 

crimes from July 1, 1999, to June 30, 2000.

Clean Air Compliance Program Team for their contribution to TVA’s Clean Air Compliance 

Program.

Signicant Review and Analysis Conducted at the Request of Congress Team for their work 

in conducting a congressionally requested review and analysis of power rate and cost issues.

Oce Space Team for their outstanding contributions toward improving TVA’s 

decision-making processes related to property and oce facilities.

Investigation Regarding a Senior Manager’s Misconduct Team for working together to 

develop, analyze, and report complex ndings regarding signicant misconduct by a 

senior manager.

The East Tennessee Health Care Fraud Team for outstanding teamwork in a multi-agency 

eort to investigate and prosecute health care fraud by a medical provider in the Federal 

Judicial District of Eastern Tennessee.

Long-Term Bulk Power Trading Team for producing two highly complex reviews of TVA’s 

weekly, monthly, seasonal, annual, and multi-year trading in the wholesale electricity market.

SOX Review Team for performing process-control reviews to assist TVA management in 

evaluating the design and operating eectiveness of nancial reporting controls.

Fraud Risk Assessment Team for developing and implementing an action plan to perform 

fraud risk assessments, innovative and valuable tools to prevent and detect waste, fraud, 

and abuse.

Contract Audits Team for using proactive and innovative best practices to consistently

identify signicant cost savings, recoveries, and process improvements for TVA.

Award

YEARS 

AWARDS
TVA OIG Semiannual Report25

2007

PCIE Award

2008

PCIE Awards

2009

2010

2011

CIGIE Award

2014

Initiation of best practices sharing sessions with other OIGs.

IT Organizational Eectiveness Audits Team for work on reviewing the eectiveness of 

TVA’s IS organization and IT Security function.

An Investigations and Audit Team, working jointly, on a product substitution case that 

resulted in a $25 million recovery.

Joint investigation of a complex loan fraud that resulted in the conviction of two Tennessee 

businessmen for bank fraud, mail fraud, and money laundering.

The National Association of Government Communicators recognized the TVA OIG 

fraud video as one of the 2010 winning entries of the Blue Pencil & Gold Screen 

Awards Competition. 

The poster advertising the TVA OIG’s fraud video received two ADDY awards for color 

photography and the Bronze Citation of Excellence. 

A review of TVA’s Dam Safety Program to identify if TVA adequately addressed signicant 

risks and was in compliance with applicable laws and regulations. 

A joint investigation and inspection identifying and notifying TVA that the WBN Unit 2 

construction project was behind schedule and over budget.

An investigation leading to the conviction of a contractor company’s nuclear plant safety 

manager who falsied injury rates at TVA nuclear plants to collect more than $2.5 million 

in safety bonuses.

Senior Special Agent Meagan Sands receives award from the U.S. Attorney’s Oce for her 

exemplary performance as a law enforcement agent in two notable cases. 

2013

CIGIE Awards

YEARS

 Awards

Award

 Award
26TVA OIG Semiannual Report 

TVA OIG Hotline Redesign

The OIG’s hotline, the EmPowerline, was created to facilitate the expression of concerns by TVA 

employees, contractors, and the general public related to fraud, waste, and abuse in TVA programs. 

EmPowerline is administered by a third party, and users can anonymously report concerns anytime 

by phone or online.

NOTEWORTHY 

UNDERTAKINGs
TVA OIG Semiannual Report27

In an effort to educate potential 

complainants about fraud, we created 

videos that inform users about the 

process of reporting fraud, waste, and 

abuse and what fraud looks like. This 

effort also included redesigning the 

EmPowerline Web site with a more 

simple, straight-forward design.

During July 2015, we launched the 

retooled Web site, which features 

three primary links. The first link 

directs users to a video that explains 

what happens when fraud is reported 

to the OIG. The second link leads to 

an online form to report a concern 

confidentially or anonymously with the 

OIG. The third link leads to a series 

of brief videos providing examples 

of what fraud may look like at TVA. 

The videos were produced by TVA’s 

Digital and Creative Services and are 

based on past TVA OIG cases. TVA 

OIG also created a poster that has 

been distributed throughout the Valley 

to accompany the launch of the new 

Web site. It encourages employees 

and contractors to “Watch, Learn,

and be EmPowered.”

OIG Supports the Community through 

Acts of Caring

In recognition of TVA OIG’s 30th anniversary, our office 

participated in community service days and supported 

the charities of Habitat for Humanity (Habitat), Ronald 

McDonald House, and Second Harvest Food Bank 

(Second Harvest) in addition to charities included in TVA’s 

Combined Federal Campaign drive. 

OIG employees are supporting the Ronald McDonald 

House through household donations, including toiletries,

that are provided to families of children receiving life-saving 

medical care who are residing in nearby homes provided by 

the charity.

The Days of Service involved physical labor to support 

Habitat and Second Harvest. On October 8, 20, and 22,

TVA OIG employees gathered at the Habitat warehouse 

in Knoxville, Second Harvest in Knoxville, and at a Habitat 

building site in Chattanooga, respectively. The Knoxville 

Habitat team worked on building sheds and shed doors 

as well as painting columns and sorting nails for working 

families who are receiving assistance from Habitat in buying 

their first constructed home. The Second Harvest team 

worked on bagging cereal and labeling cans – bagging 2,667 

cereal bags that were to be provided to hungry families in 

the area and labeling some 3,756 cans. The Chattanooga 

Habitat team worked at a homesite installing a deck and 

painting and repairing wood to benefit a family receiving 

assistance from Habitat.

“I really enjoyed being out of the office and engaging in 

that kind of physical work with OIG team members for a 

worthy cause,” said OIG IT auditor Michael Newport, of 

his participation in the first Day of Service. “It’s a gratifying 

experience to come together and serve our community 

and be able to see the results of your efforts right there on 

the spot, knowing it will make a difference to families in the 

community.”
28TVA OIG Semiannual Report 

This semiannual report to Congress reports on a theme that is our vision to make TVA better. In 

understanding the role of an IG, this simple statement clarifies our mutual purpose with TVA. In this 

edition, our intention is to guide the reader through the ways our office continues to support TVA in 

achieving its operational goals while keeping an eye toward its greatest assets—its employees—in 

optimizing their abilities to contribute to TVA’s operational performance and outcomes, ultimately 

benefitting the more than 9 million ratepayers served by TVA throughout the Tennessee Valley. This 

edition focuses not only on what we do, but why we do it and highlights our office’s contributions 

since its inception, some 30 years ago on October 18, 1985.

EXECUTIVE OVERVIEW
TVA OIG Semiannual Report29

AUDITS

The TVA OIG Audit organization completed 22 audit,

review, and agreed-upon procedures engagements. This 

work identified nearly $7.6 million in questioned costs for 

TVA to recover and $2.1 million in funds the company 

could put to better use. We also identified several 

opportunities for TVA to improve the effectiveness and 

efficiency of its programs and operations.

Contract Audits

To support TVA management in negotiating procurement 

actions, we completed a review of the cost proposal 

submitted by a company to provide hydro modernization,

unit rehabilitation, and functional support services in 

support of TVA’s hydro facilities. Our review identified 

$2.1 million of potential savings opportunities for TVA to 

negotiate. We also completed three compliance audits of 

contracts with expenditures totaling $113.1 million related 

to (1) engineering, licensing, construction, and startup 

operation services in support of completion of TVA’s 

Bellefonte Nuclear Plant; (2) environmental services for 

Kingston Fossil Plant; and (3) remediation work at Blue 

Ridge Dam. These audits identified potential overbillings of 

$7.6 million. In addition, we completed audits of 

(1) TVA’s invoice approval process and (2) a contractor’s 

potential rework and damages liability 

in association with work performed 

at WBN Unit 2. The Contract Audits 

section begins on page 37 of this 

report.

Corporate Governance

and Finance Audits

With a focus on TVA’s regulatory 

activities, compliance with applicable 

laws and regulations, and financial 

reporting, we completed audits of 

TVA executive incentives and overtime 

at TVA. In addition to our audit 

work, we monitored the work of the 

external auditor in its review of TVA’s 

second and third quarter financial 

information for fiscal year (FY) 2015 to assure compliance 

with Government Auditing Standards. We also provided 

assistance to the external auditor during interim testing 

for the year-end financial statement audit. The Corporate 

Governance and Finance Audits section begins on 

page 38 of this report.

IT Audits

IT Audits (1) completed four IT organizational effectiveness 

audits, (2) assessed electronic communication practices 

of the TVA Board, (3) reviewed the implementation of a 

new system managing TVA’s coal supply chain as well as an 

upgrade to an enterprise application, and (4) conducted 

an application audit of a system included in the process 

for controlling physical access to TVA assets. The IT Audits 

section begins on page 40 of this report.

Operational Audits

Operational Audits completed reviews of (1) TVA’s 

process for developing its IRP, (2) the efficiency of TVA’s 

hiring process, (3) the effectiveness of TVA’s process for 

addressing nuclear emerging regulatory issues,

(4) compliance with TVA’s Obtaining Things of Value 

protocol, (5) the contractor workforce management 

process, and (6) TVA’s compliance with green power 

accreditation requirements. The Operational Audits section 

begins on page 42 of this report.

STATISTICAL HIGHLIGHTS

April 1, 2015 - September 30, 2015

Audit Reports Issued 22

Evaluations Completed 6

Questioned Costs $7,598,913

Questioned Costs Agreed to by TVA $2,156,279

Questioned Costs Recovered by TVA $2,981,453

Funds to be Put to Better Use $2,106,300

Savings Realized by TVA $142,000

Investigations Opened 126

Investigations Closed 142

Recoveries/Fines/Savings/Projected Savings $3,025,204

Criminal Actions 2

Administrative Actions (No. of Subjects) 14
30TVA OIG Semiannual Report 

EVALUATIONS

During this semiannual period, Evaluations completed six 

reviews. These evaluations included reviews of (1) TVA 

transmission fire protection, (2) Hydro Generation fire 

protection, (3) Hydro Generation obsolete equipment,

(4) nuclear outage performance, and (5) firearms and 

ammunition. The other review completed during this 

period is not included due to its sensitive nature. The 

Evaluations section begins on page 46 of this report.

INVESTIGATIONS

This reporting period, we opened 126 cases and closed 

142. Our investigative results include recoveries, savings,

fees, and projected savings of more than $3 million, one 

indictment, and one conviction. The Investigations section 

begins on page 50 of this report.

Fontana Dam

Photo Credit Frank Kehren
TVA OIG Semiannual Report31

Bull Run 

Fossil Plant
32TVA OIG Semiannual Report 

Since 1985, the OIG has worked to help TVA become better which is the OIG mission. Through our 

audits, evaluations, and investigations, we provide TVA management, the TVA Board, and Congress 

with an independent look at the economy, efficiency, and effectiveness of TVA programs and help 

prevent and detect fraud, waste, and abuse. Over the years, the OIG has helped TVA save or 

recover millions of dollars and recommended numerous program improvements. We credit our 

success to the efforts of our hardworking and talented staff and the professional responsiveness 

of TVA management to our recommendations.

Organization

Jill M. Matthews

Deputy Inspector 

General

Robert E. Martin

Assistant Inspector General, Audits & Evaluations

Richard W. Moore

Inspector General

Jill M. Matthews

Assistant Inspector

General, Administration

Kathy Kirkham

Manager, Human 

Resources

Terri Beatty

Manager, Organizational 

Health

David Winstead

Legal Counsel

Paul B. Houston

Assistant Inspector 

General, Investigations

Nancy J. Holloway

Special Agent In Charge

James E. Hunter

Special Agent In Charge

Lisa H. Hammer

Director,

Operational Audits

David P. Wheeler

Deputy Assistant

Inspector General, 

Audits

Greg R. Stinson

Director, Evaluations

Phyllis R. Bryan

Director, IT Audits

Curtis C. Hudson

Director,

Contract Audits

Rick C. 

Underwood

Director, Corporate 

Governance & 

Finance Audits

Charles A. Kandt

Counselor to the IG

Ben R. Wagner

Senior Advisor

Stakeholder Relations
TVA OIG Semiannual Report33

TVA OIG Office Locations

The OIG has a work philosophy of being in the right place 

at the right time to do the best work possible. We support 

that philosophy by encouraging our OIG employees to 

work where they can be most effective whether that is in 

one of our physical offices, in the field, or in one of our 

virtual offices that enable our employees to telework from 

home or while traveling. 

The OIG has strategically located its offices near all 

major TVA offices throughout the Tennessee Valley. We 

are headquartered in TVA’s East Tower, opposite TVA’s 

corporate offices, overlooking downtown Knoxville.

The OIG has field offices in Chattanooga, Tennessee,

where the Evaluations unit, members of the Corporate 

Governance and Finance team, and several special 

agents are located, as well as in Nashville, Tennessee, and 

Huntsville, Alabama. We also have office locations at Watts 

Bar Nuclear Plant in Spring City, Tennessee; and Sequoyah 

Nuclear Plant in Soddy Daisy, Tennessee. Staff work in 

these locations as needed. As of September 30, 2015, the 

OIG had a total staff of 106. 

ADMINISTRATION

The Administration team works closely with the IG,

Deputy IG, and Assistant IGs to address the day-today operations of the OIG and to develop policies and 

procedures designed to drive and enhance productivity in 

achieving office goals. Responsibilities include personnel 

administration, budget and financial management,

purchasing and contract services, facilities coordination,

training event planning, communications facilitation, and IT 

support.

AUDITS AND EVALUATIONS

The Audits and Evaluations teams perform a wide variety 

of engagements designed to promote positive change and 

provide assurance to TVA stakeholders. Based upon the 

results of these engagements, the Audits and Evaluations 

teams make recommendations to enhance the effectiveness 

and efficiency of TVA programs and operations. 

Paradise 

Fossil Plant
34TVA OIG Semiannual Report 

The teams use an impact- and risk-based approach to 

develop an annual work plan. In developing the plan, the 

OIG considers TVA’s strategic plans, major management 

challenges, TVA’s ERM process, and other input from TVA 

management. This planning model also evaluates each 

potential engagement from the standpoint of materiality 

(i.e., costs or value of assets), potential impact, sensitivity 

(including public and Congressional interest), and the 

likelihood it will result in recommendations for cost savings,

recovery of dollars, or process improvements. The result of 

the OIG Audits and Evaluations planning process is a focus 

on those issues of highest impact and risk to TVA. 

The Audits team, primarily based in Knoxville, generates and 

oversees comprehensive financial and performance audits 

of TVA programs and operations, providing an inclusive 

picture of TVA’s overall fiscal and operational health. This 

team is made up of four departments—Contract Audits,

Corporate Governance and Finance Audits, IT Audits,

and Operational Audits. This team performs its work in 

accordance with Government Auditing Standards.

• Contract Audits has lead responsibility for contract 

compliance and preaward reviews. In addition, this team 

performs reviews of TVA contracting processes and 

provides claims assistance as well as litigation support.

• Corporate Governance and Finance Audits has lead 

responsibility for oversight of TVA’s (1) financial 

statement audit and related services performed by TVA’s 

external auditor and (2) regulatory activities. This team 

also conducts operational reviews to assess the results, as 

well as the economy and efficiency of TVA programs. 

• IT Audits has lead responsibility for audits relating to the 

security of TVA’s IT infrastructure, application controls,

and general controls associated with TVA systems. 

This team also performs operational reviews of the 

effectiveness of IT-related functions. 

• Operational Audits focuses on risk and impact-driven 

operational audit work. The team performs audits of 

operational effectiveness and efficiency, as well as TVA 

compliance with laws and regulations.

The Evaluations team seeks to ensure that program 

objectives and operational functions are achieved effectively 

and efficiently. It performs both comprehensive reviews 

and more limited scope policy and program reviews. In 

accordance with the Quality Standards for Inspection and 

Evaluation, the objectives of the unit include providing a 

source of factual and analytical information, monitoring 

compliance, measuring performance, assessing the efficiency 

Corporate Governance 

and Finance Audits

•	 Internal Control Deficiencies

•	 Program Inefficiencies/Ineffectiveness

•	 Policy Noncompliance

•	 Fraud

Operational Audits

•	 Operational Inefficiency

•	 Not Achieving Intended Results

•	 Inferior Performance

•	 Legal/Regulatory Noncompliance

•	 Fraud

IT Audits

•	 Internal Control Deficiencies

•	 Policy Noncompliance

•	 Integrity of Data and Assets

•	 Fraud

Contract Audits

•	 Inflated Proposals

•	 Contract Overpayments

•	 Inferior Performance

•	 Fraud

Evaluations

•	 Internal Control Deficiencies

•	 Operational Inefficiency

•	 Policy Noncompliance

•	 Fraud

Types of Audit & Evaluation Issues
TVA OIG Semiannual Report35

and effectiveness of operations, and conducting inquiries 

into allegations of fraud, waste, abuse, and mismanagement. 

Audit and evaluation issues vary depending on the 

objectives of the project. The graphic shows some 

representative examples of issues our audit and evaluation 

projects are commonly designed to identify. 

INVESTIGATIONS

The Investigations team proactively and reactively uncovers 

activity related to fraud, waste, and abuse in TVA programs 

and operations. This team performs its investigations in 

accordance with the Quality Standards for Investigations as 

prescribed by the CIGIE, applicable U.S. Attorney General 

Guidelines, and other guiding documents. The special 

agents maintain liaisons with federal and state prosecutors 

and notify the U.S. Department of Justice whenever the 

OIG has reason to believe there has been a violation of 

federal criminal law. The special agents partner with other 

investigative agencies and organizations on special projects 

and assignments, including interagency law enforcement 

task forces on terrorism, the environment, health care, and 

public corruption, as well as securities fraud. The graphic 

shows the major categories of investigations.

LEGAL

The OIG Legal Counsel team monitors existing and 

proposed legislation and regulations that relate to the 

mandate, operations, and programs of the OIG and TVA. 

Additionally, this team provides legal advice as needed for 

administrative, audit, evaluation, and investigative projects.

Contract Fraud

Defrauding TVA through its

procurement of goods and services 

including fraud schemes such as

misrepresenting costs, overbilling 

charges, product substitution, and

falsification of work certifications.

Theft of Government 

Property and Services

Theft of TVA property such as

material, tools, equipment, or 

resources.

Environmental Crime

Violations of environmental criminal 

law pertaining to the Tennessee River

system and its watershed, along with

violations relating to TVA land and 

facilities. 

Health Care Fraud

Intentional misrepresentation of 

health care services, expenses,

billings, needs, or coverage that

results in unauthorized payments

or other benefits.

Unauthorized 

Access Into TVA 

Computer Systems

Accessing a TVA computer 

without authorization or

exceeding authorized access.

Workers’

Compensation Fraud

Falsification of documents to 

receive payments by employees, 

former employees, or health care

providers.

Employee Misconduct

Misuse of TVA furnished

equipment, travel voucher fraud,

a multitude of miscellaneous 

matters of abuse, conflict of

interest, and violations of code of 

conduct. 

Special Projects

Management requests, data 

mining and predictive analysis, 

Congressional and TVA Board 

requests, and fraud risk

assessments.

Major Categories of Investigations
36TVA OIG Semiannual Report 

During this reporting period, the TVA OIG audit organization completed 22 audit, review, and agreedupon procedures engagements. This work identified nearly $7.6 million in questioned costs for TVA 

to recover and $2.1 million in funds the company could put to better use. We also identified several 

opportunities for TVA to improve the effectiveness and efficiency of its programs and operations.

SUMMARY OF 

REPRESENTATIVE AUDITS
TVA OIG Semiannual Report37

Contract Audits

Preaward Contract Reviews

To support TVA management in negotiating procurement 

actions, we completed a review of the cost proposal 

submitted by a company to provide hydro modernization,

unit rehabilitation, and functional support services in 

support of TVA’s hydro facilities. Our review identified 

$2.1 million of potential savings opportunities for TVA to 

negotiate. The savings opportunities were primarily related 

to overstated labor and burden rates and certain markup 

rates.

 

Contract Compliance Reviews

During this semiannual period, we completed three 

compliance audits of contracts with expenditures totaling 

$113.1 million and identified potential overbillings of 

$7.6 million. Highlights of our completed compliance audits 

follow.

• We audited a contractor’s calendar year 2012 and 

2013 rate adjustments which totaled more than 

$5.1 million based on $104.2 million of billed costs. 

The contract, which provided for the contractor to 

complete engineering, licensing, construction, and startup 

operations of a single Bellefonte Nuclear Plant unit,

required the contractor to adjust its labor and general 

and administrative billing rates to its actual costs incurred 

each year. We determined the contractor’s 2012 and 

2013 rate adjustments were overstated by $1.8 million. 

In addition, we found the contractor billed more than 

$5.6 million in labor costs, along with associated fee, using 

cost-center rates not included in the contract. 

• We audited $6 million in costs paid by TVA between 

November 14, 2011, and May 1, 2014, to a contractor 

for providing professional environmental services. We 

determined the contractor overbilled TVA $162,307,

including (1) $95,425 in travel costs and (2) $66,882 

in miscellaneous expenses. Additionally, we found 

the contractor (1) did not obtain advance written 

approval from TVA’s Contracting Officer for $333,556 

in subcontract costs billed and (2) billed TVA $32,386 

using lump-sum pricing provisions not provided for in the 

contract.

• We audited $2.9 million in costs and fee billed by a 

contractor for remediation work performed at Blue Ridge 

Hydro Dam. TVA disputed a portion of the amount billed 

and requested an audit. We found the $2.9 million in 

costs billed to TVA were in accordance with the contract’s 

terms and conditions. TVA and the contractor reached 

a final settlement on June 11, 2015, for the disputed 

amount.

Review of Invoice Approval Process

The OIG audited TVA’s invoice approval process to 

(1) assess TVA’s policies and procedures related to the 

review and approval of invoices; (2) determine compliance 

with applicable policies and procedures; and (3) determine 

if TVA’s invoice approvers have adequate information,

including clear contractual-compensation provisions and 

sufficient invoice detail to effectively perform their role. 

Our scope included non-receiving contracts and purchase 

orders with FY 2013 payments totaling nearly $3.4 billion. 

We found policies and procedures were not followed to 

ensure effective review and approval of supplier invoices. 

Specifically, our review of 143 invoices totaling more than 

$184 million found inadequate reviews were performed 

on 104 invoices or 73 percent. Based on our review, we 

identified several possible underlying causes for ineffective 

invoice reviews: (1) contracts contained unclear and/or 

conflicting compensation provisions; (2) some contracts do 

not provide specific requirements regarding invoice detail 

and for those contracts that do, the requirements are not 

being followed or enforced; (3) not all relevant contract and 

purchase orders are attached to the invoice or available in 

TVA’s Enterprise Asset Management (EAM) system; 

(4) the required field invoice approver (FIA) training does 

not include details on how to access and approve invoices 

in TVA’s EAM system; (5) clear and frequent communication 

does not always exist between the FIA and contracting 

officer (CO); (6) an approval stamp used at a nuclear plant 

incorrectly implied the OIG reviews the invoices; and 
38TVA OIG Semiannual Report 

(7) the current invoice review process is a manual process 

within an automated system. 

We recommended TVA management: (1) develop a 

contract quality assurance program to ensure clear, concise,

and easy to follow compensation terms; (2) ensure the 

FIAs and contract technical stewards have the most upto-date terms and conditions of a contract by developing 

an approach to provide access (dependent upon business 

need) to contract documents; (3) require training for those 

accessing and approving invoices in TVA’s EAM system; 

(4) revise policies to require the CO to confirm FIAs 

understand their responsibilities in approving invoices for 

payment; and (5) revise policies to clarify CO responsibility 

for monitoring the invoice approval process and verifying 

the contractor’s invoices contain adequate detail in a format 

that facilitates the review. 

Additionally, we recommended TVA management utilize 

the technology available to expedite and improve the 

invoice review process by implementing automated steps 

in the process, where possible, including: (1) requiring 

electronic data from vendors that allows for 100 percent 

review; (2) setting parameters to identify exceptions; 

(3) following up on items identified as exceptions before 

making payment on those items; (4) establishing automatic 

notifications be sent to FIAs, contract managers, and 

others regarding exceptions to ensure the exceptions are 

reviewed; and (5) establishing automated analytical reviews,

as necessary. TVA management generally agreed with our 

findings and stated they would take action to address our 

recommendations. 

Review of Contractor’s Rework and 

Damages Liability

At the request of the TVA’s Supply Chain and WBN 

Unit 2 construction management, we reviewed a 

contractor’s potential rework and damages liability in 

association with work performed at WBN Unit 2. Our 

objective was to determine the reasonableness of TVA’s 

methodology for identifying and estimating the contractor’s 

rework and damages liability. In summary, we found TVA’s 

methodology could be improved and recommended 

TVA management take actions to improve its processes 

for identifying and estimating the contractor’s rework and 

damages liability. TVA management agreed with our findings 

and is taking action to address the recommendations.

Corporate Governance 

and Finance Audits

During this semiannual period, Corporate Governance and 

Finance Audits completed audits of (1) TVA’s executive 

incentives and (2) employee overtime. In addition, the 

team provided oversight of and assistance to TVA’s external 

auditor.

TVA Executive Incentives

In October 2014, the OIG completed an audit of 

TVA’s executive retention. As a follow up to that audit,

we initiated an audit of TVA’s executive incentives to 

determine (1) if executive incentives align with TVA’s 

objectives and goals and (2) whether processes for 

establishing executive incentive performance measures are 

followed.

TVA currently has two executive incentive plans, the 

Executive Annual Incentive Plan (EAIP) and the Executive 

Long-Term Incentive Plan (ELTIP), which include 

performance-based incentives tied to the achievement of 

TVA’s goals and objectives. The performance measures 

associated with EAIP are based on the accomplishment of 

approved goals identified in TVA’s Winning Performance 

Team Incentive Plan balanced scorecards. Since the 

performance measures associated with EAIP are not 
TVA OIG Semiannual Report39

executive specific, we focused this audit on alignment and 

development of ELTIP performance measures.

The OIG determined the long-term performance measures 

included in the ELTIP aligned with three of the five strategic 

imperatives included in TVA’s Strategic Plan. However,

we noted two of the five strategic imperatives, Debt and 

People and Performance Excellence, were not incentivized 

in the ELTIP. In our opinion, aligning long-term incentives 

with all strategic imperatives would (1) benefit TVA by 

promoting accountability in all areas identified as crucial to 

the achievement of TVA’s mission in TVA’s Strategic Plan 

and (2) continue to emphasize these areas as members 

cycle off of the TVA Board and executives leave TVA.

We also reviewed the process for establishing long-term 

performance measures for the ELTIP and found the process 

was followed by TVA and the Board. However, one 

potential area for improvement was noted regarding the 

inclusion of additional information in the plan documents 

that clearly describe the ELTIP performance measures 

development process.

Based on the findings, we made recommendations to the 

People and Performance Committee of the Board and TVA 

management to promote accountability in all areas identified 

as crucial to achieving TVA’s mission and to provide 

information to their successors regarding development 

of executive incentive measures. The Committee and 

TVA management generally agreed with our findings and 

recommendations and provided action plans to address 

these issues.

TVA Employee Overtime

OIG data-monitoring efforts noted some TVA employees 

appeared to be compensated for unusually high amounts 

Shawnee

Fossil Plant
40TVA OIG Semiannual Report 

of overtime. As a result, the OIG initiated a review of 

overtime to (1) analyze overtime payments at TVA and 

identify any trends or areas where overtime payments were 

concentrated and (2) identify individuals compensated for 

excessive amounts of overtime in any areas identified and 

determine if (a) overtime had been approved by managers 

and supervisors in accordance with applicable guidelines 

and (b) controls were in place to prevent situations where 

fatigue could reduce the ability of operating personnel 

to work in a safe condition. Our audit scope included all 

overtime paid at TVA from October 1, 2013, through 

August 31, 2014.

During our audit, we found overtime hours were not 

passed to TVA’s payroll system for payment until these 

hours had been approved in TVA’s time-reporting 

system. In addition, we determined 86 percent of the 

total overtime hours paid during the audit period were 

to employees in Transmission and Power Supply, TVA 

Nuclear, and Power Operations organizations. Our 

analysis of overtime paid for the three organizations during 

our 11-month audit scope noted excessive amounts of 

overtime being worked. Specifically, we noted 1,053 

employees with at least 500 hours of reported overtime 

and 31 employees with at least 1,000 hours of reported 

overtime. Although the post approval process appeared 

adequate, we found inconsistent methods for documenting 

preapproval of overtime. Additionally, we noted TVA 

lacked organizational guidance for managing fatigue and 

work-hour limits in all operational areas other than TVA 

Nuclear. 

We made recommendations for TVA to implement a 

common procedure for preapproval of overtime, develop 

guidance for all of TVA for managing fatigue and controlling 

work hours, and review positions within the organization 

where employees are working excessive amounts of 

overtime on a regular basis and determine whether safety 

and/or productivity are a concern. TVA management 

agreed with our findings and recommendations and is 

taking corrective actions to address these issues.

IT Audits

During this semiannual period, IT Audits (1) completed 

four IT organizational effectiveness audits; (2) assessed 

electronic communication practices of the TVA Board; 

(3) reviewed the implementation of a new system 

managing TVA’s coal supply chain, as well as an upgrade to 

an enterprise application; and (4) conducted an application 

audit of a system included in the process for controlling 

physical access to TVA assets.

IT Organizational Effectiveness 

Audits

A key aspect of the TVA mission and vision is to provide 

affordable electricity to rate payers. TVA’s IT organization’s 

contribution to this mission and vision includes operating 

effectively. Accordingly, to assist IT in increasing its 

effectiveness, the recommendations from our previous 

organizational effectiveness audit were focused on creating 

sustainable processes. In addition, TVA’s Chief Information 

Officer created a program titled 1,000 Days to Success 

(IT1K) to address findings from the audit as well as other 

observations he made as to the current state of IT. 

Currently, we are conducting a series of audits to assess 

the IT organizations’ (1) current effectiveness, including 

alignment with TVA values; (2) sustainability of actions taken 

in response to the 2011 OIG audit; and (3) outcomes of 

the IT1K program. To date, we have completed audits 

in the following organizations within TVA IT: Enterprise 

Information Security and Policy; Enterprise Architecture and 

Programs; Operations Solutions Delivery; and Enterprise 

Customer Operations. 

In summary, we found: 

• Enterprise Information Security and Policy operations 

have improved since the 2011 audit, but effectiveness 

could be improved around compliance and risk 

management activities and engagement in IT application 

implementation projects. Additionally, we recommended 

improvements around staffing within the organization.
TVA OIG Semiannual Report41

• Enterprise Architecture and Programs also showed 

improved effectiveness since the 2011 audit; however, we 

noted program enhancements which would improve the 

quality of IT project delivery.

• Operations Solutions Delivery was formed as a new 

group within IT during a TVA reorganization conducted 

since the 2011 audit. We noted this group is operating 

at a high level of effectiveness; however, as technologies 

expand and support needs increase, the current staff 

level may need to be reassessed to continue successfully 

meeting customer needs. 

• Enterprise Customer Operations has worked to improve 

the IT end-user experience by adopting industry standard 

best practices, building a new customer operations 

center, offering expanded self-services options to end 

users, and providing strong and constructive leadership. 

While the group has succeeded in many efforts,

improvements are needed in the areas of physical asset 

management and service-level management. TVA 

management agreed with the findings and is taking action 

to implement the recommendations. 

Electronic Communications of TVA

Board

We performed an audit of electronic communications 

conducted by the TVA Board. In summary, we determined 

current TVA Board e-mail practices are consistent with 

the Presidential and Federal Records Act Amendments of 

2014 federal law. In addition, we found the third-party 

service used to distribute sensitive documents to the 

Board had appropriate processes and controls in place 

as reported by another independent audit company. 

However, improvements could be made to reduce the 

risk of exposing sensitive TVA business information. The 

Board agreed with the findings and will continue to explore 

options around the recommendations.

Implementation Projects

We completed two audits associated with system 

implementation or upgrades described as follows. The 

first implementation project was for a new application 

to manage TVA’s coal supply chain. In summary, we 

determined the TVA project team followed TVA systems 

development processes and included consideration 

of business processes during implementation. During 

the audit, items of potential risk and concern identified 

by the OIG were communicated to TVA. The project 

team addressed all findings by either implementing our 

recommendations or accepting the risk to the project prior 

to the time the new system went into production.

The second implementation project was to upgrade 

TVA’s EAM system to a new version. This version 

upgrade provided performance improvements,

reduced customizations, maintainability, and kept the 

TVA application at a supported level. In summary, we 

determined the TVA project team followed TVA systems 

development processes and included consideration of 

business processes during implementation. However, we 

found (1) some weaknesses in our review of two security 

groups, (2) group memberships were not maintained 

consistently, and (3) integration for historical documents 

was not completed. Other items of potential risk and 

concern were communicated to management during the 

audit and were addressed prior to the time the new system 

went into production. 

TVA management agreed with our findings in both audits 

and is in the process of identifying or has taken actions to 

implement the recommendations.

Application Audit

We audited a TVA application that is part of the process for 

controlling access of personnel with authorized unescorted 

physical access to sensitive TVA assets. In summary, we 

determined (1) logical security controls were generally 

operating effectively, and (2) controls around granting 

physical access to sensitive TVA locations were operating in 

accordance with TVA policy. However, we found 

(1) electronic forms were not stored properly, (2) system 

administrator access appeared to be greater than what 

was needed, and (3) documentation of periodic access 

reviews was not maintained. TVA management agreed 

with our findings and is taking actions to implement the 

recommendations.
42TVA OIG Semiannual Report 

Operational Audits

During this semiannual reporting period, Operational 

Audits assessed TVA’s process for developing its IRP,

evaluated the efficiency of TVA’s hiring process, assessed 

the effectiveness of TVA’s process for addressing nuclear 

emerging regulatory issues, assessed compliance with 

TVA’s Obtaining Things of Value protocol, evaluated 

the contractor workforce management process, and 

verified TVA’s compliance with green power accreditation 

requirements.

Integrated Resource Planning 

Process

The TVA developed its IRP to guide the organization in 

meeting future energy demands. The first IRP developed by 

TVA, referred to as Energy Vision 2020, was published in 

December 1995. The stated purpose of this IRP was to be 

a “roadmap for meeting the energy needs of its customers 

for the next 25 years with economical and environmentally 

sound energy choices.” In March 2011, TVA issued a 

20-year IRP referred to as TVA’s Environmental and Energy 

Future. The purpose of the March 2011 IRP was to aid 

TVA in becoming one of the nation’s leading providers of 

low-cost and cleaner energy by 2020. Additionally, TVA 

published a Supplemental Environmental Impact Statement 

(SEIS) reflecting the potential impacts of the IRP contents 

on the environment, as required by the National Energy 

Policy Act of 1992. 

TVA personnel updated the IRP in 2015 due to significant 

changes in the electric industry and within TVA. These 

changes included abundant natural gas supplies from shale 

deposits, a decline in electricity demand growth across the 

industry and within the Tennessee Valley, a new schedule 

for completing WBN Unit 2, TVA’s clean-air commitments,

6

 

industry changes in areas such as distributed generation and 

energy efficiency and demand response, and more stringent 

environmental requirements. In addition to updating the 

IRP, TVA personnel updated the 2011 Environmental 

Impact Statement and issued the 2015 SEIS.

TVA’s current IRP, issued in draft in July 2015 and approved 

by the TVA Board in August 2015, is considered by TVA 

personnel as “a comprehensive study of how TVA might 

meet future energy and capacity needs beyond what 

can be met with existing energy resources in a variety of 

future environments.” The goal of the IRP is to balance 

the objectives of TVA’s overall mission while ensuring a 

diversified electricity-generation mix.

We evaluated the adequacy of TVA’s development process 

for the 2015 IRP, including demand-side and supply-side 

strategies. The scope of the audit included commencement 

of the IRP process on October 31, 2013, through IRP 

approval by TVA’s Board on August 21, 2015, and the 

corresponding SEIS. To evaluate the adequacy of the IRP 

process, we attended IRP team meetings and meetings 

with external stakeholders to observe the vetting of 

Allen

Fossil Plant

6 These commitments included the retirement of less-efficient coal capacity by 2019, which resulted from a settlement with the Environmental Protection 

 Agency, effective June 13, 2011. 
TVA OIG Semiannual Report43

decisions made in the development of the IRP. We also 

compared IRP inputs to authoritative industry sources, such 

as the Energy Information Administration, and assessed 

benchmarking information provided by TVA’s consultant. 

At specific milestones within the IRP process, we 

provided the analysis of those observations to TVA so 

recommendations could be implemented throughout the 

process. Based on our observations and work performed,

we determined TVA’s process for developing the 2015 IRP 

was adequate in considering potential future uncertainties 

and associated responses. Specifically, we determined 

the IRP project team met stakeholder input objectives 

by engaging numerous stakeholders and incorporating 

public opinions into the development of the IRP. We also 

determined the IRP team considered project risks, including 

those related to project management, and incorporated 

practices commonly seen in integrated planning processes,

as well as best practices, into the IRP. 

In our opinion, the IRP team improved integrated resource 

planning efforts as lessons learned from the development 

of the 2011 IRP that were incorporated into the 2015 

IRP. Additionally, we determined that scenario and 

strategy development and consideration of IRP inputs 

were consistent with those of other organizations. Our 

assessment of steps taken to analyze and evaluate the IRP,

including development of metrics and to develop the SEIS,

found actions were reasonable. 

TVA’s Talent Acquisition and 

Deployment Process

At the request of the Vice President of Human Resources 

(HR), we evaluated the efficiency of the hiring process 

related to time-to-fill for TVA annual employee positions. 

In addition, we assessed TVA’s reporting capabilities and 

functionality to identify gaps within the talent acquisition 

and deployment process. Time-to-fill is measured from the 

time the need to hire an employee is identified until the 

person is available to start work at TVA. Our audit scope 

covered the hiring process as of August 2014 for internal 

and external candidates and direct-fill and competitive 

positions filled from January 2014 through August 2014.

We found (1) process inefficiencies that can extend the 

hiring process and (2) issues impacting the usefulness of 

the time-to-fill metric. In addition, we identified areas 

where TVA’s HR information system could be improved 

to better support the hiring process and two areas where 

TVA did not comply with OPM requirements related to 

Selective Service registration and internal requirements 

for psychological evaluations for system operators and 

dispatchers. 

Additional matters, not directly related to our audit 

objectives or within the scope of our planned audit, came 

to our attention during the audit related to completing 

psychological evaluations and motor vehicle checks for 

certain positions. TVA management generally agreed with 

our recommendations and provided planned actions for 

addressing those recommendations.

Effectiveness of TVA’s Process to 

Address Nuclear Regulatory Risk

In TVA ERM’s FY 2013 fourth quarter documentation, we 

noted TVA’s Nuclear Power Group (NPG) had identified 

several risks associated with compliance with regulatory 

requirements. Based on the identified risks, we initiated 

an audit related to TVA’s nuclear regulatory program to 

assess the effectiveness of TVA’s process for addressing 

nuclear emerging regulatory issues (ERI). TVA defines 

an ERI as “...an external development that may result 

in significant impact to NPG resources. This typically 

includes changes to nuclear regulations or the nuclear 

operating regulatory environment that could affect NPG’s 

performance or require a modification to its business or 

operating practices.” For purposes of this audit, we limited 

our scope to NRC proposed rulemaking. Specifically, our 

audit covered TVA’s process for identifying, tracking, and 

monitoring potential NRC rules and regulations that could 

be applicable to TVA. Accordingly, we did not include in 

our audit scope TVA’s process for complying with newlyenacted or previously-enacted NRC rules and regulations.

We determined the process for addressing nuclear ERIs 

is generally effective. During the period of our review,

September 26, 2009, through September 26, 2014,

we identified no instances where TVA overlooked an 
44TVA OIG Semiannual Report 

ERI related to NRC-proposed rulemaking; however, we 

did identify areas where TVA’s internal policy related 

to emerging regulatory issues was not being followed. 

Specifically, (1) the ERI Monitoring Table was not being 

filled out completely and consistently, (2) formal executive 

briefings were not consistently occurring, and (3) executive 

sponsors were not being assigned to ERIs with significant 

impacts on NPG resources. As a result of our audit, TVA 

began taking corrective action by issuing a revised internal 

procedure.

We also noted two opportunities to improve the 

effectiveness of the process related to providing additional 

dates and explanations to the ERI Monitoring Table 

and enhancements to keep the list of industry working 

groups and participants as up-to-date as possible. 

TVA management agreed with our recommendations 

and provided planned actions for addressing those 

recommendations.

Obtaining Things of Value from TVA

In August 2008, numerous newspaper articles questioned 

the fairness of a TVA Maintain and Gain7

 transaction 

granting water access to Blackberry. Blackberry’s primary 

investor was a congressman who served on the U.S. 

House Transportation Committee’s Subcommittee on 

Water Resources and the Environment, a Congressional 

panel that provides formal oversight of TVA. The articles 

raised questions about whether the congressman used his 

position to influence TVA’s decision to grant Blackberry’s 

request for water access. Because doubt was cast on the 

fairness of a TVA process, the TVA OIG conducted an 

inspection and found no evidence of pressure on TVA from 

the congressman to give Blackberry water access on this 

lakefront project. 

As a result of that inspection, TVA and the TVA Board 

agreed to develop a policy to provide a means to identify 

the potential of actual or apparent conflicts of interest or 

the appearance of the exertion of undue influence on the 

part of a person applying for a TVA benefit. TVA developed 

the “Obtaining Things of Value from TVA Protocol” 

(Protocol) in June 2009. According to the Protocol, its 

purpose is to ensure that “when something of value is being 

sought from TVA, the decision-making process needs to be 

fair, impartial, transparent, and evenhanded, both in fact 

and in appearance.” 

The Protocol requires the applicant requesting a “thing of 

value” to self-disclose whether a “covered person” stands 

to benefit if the request is approved. According to the 

Protocol, a “thing of value” is defined as (1) any interest in 

real property held by TVA in the name of the U.S.,

(2) any Section 26a permit,

8

 (3) a sole-source contract with 

a monetary value greater than $25,000, (4) a donation 

with a monetary value greater than $10,000, or (5) surplus 

or excess property with a monetary value greater than 

$10,000. A “covered person” is defined as any of the 

following individuals or an immediate family member of any 

one of the following individuals: (1) an elected government 

official, (2) a policy-making level employee of an entity 

that regulates TVA or its activities, (3) a management-level 

employee of a power customer of TVA, (4) a TVA director,

or (5) a TVA employee. 

The Protocol includes a process to handle requests and 

inquiries related to a “covered person” requesting a “thing 

of value,” including documenting any communication 

with the “covered person.” The Protocol requires this 

information be disclosed to the Chief Ethics Officer and 

the OIG. The Chief Ethics Officer’s role is to review the 

information to ensure the covered persons’ transactions 

are “fair, impartial, transparent, and evenhanded, both in 

fact and in appearance.” The OIG also receives covered 

persons’ request notifications for additional independent 

oversight.

This audit was initiated to determine whether the Protocol 

(1) design provides reasonable assurance of meeting its 

intended purpose and (2) was implemented as required. 

7 The Maintain and Gain program was designed to allow consideration of proposals to obtain lake access rights at the landowner’s property by swapping access 

 rights already available at other properties the landowner may possess. The policy, as written, required the transactions to result in no net loss or, preferably, 

 a net gain of public shoreline to TVA.

8 Section 26a of the TVA Act, passed by Congress in 1933, requires TVA approval be obtained before any construction, operation, and maintenance activities 

 can be carried out that affect navigation, flood control, or public lands along the shoreline of the TVA lakes or in the Tennessee River or its tributaries. 

 Examples of structures and projects that require TVA approval include boat docks, piers, boat ramps, shoreline or stream bank stabilization, bridges, culverts, 

 commercial marinas, barge terminals and mooring cells, water intake and sewage outfalls, and fill or construction within the river floodplain. These requests 

 are called Section 26a permits.
TVA OIG Semiannual Report45

We determined the design does not provide assurance of 

meeting its intended purpose and the Protocol was not 

implemented as required. Specifically, the Protocol does 

not provide assurance TVA is reducing the risk of undue 

influence. We found the Protocol: (1) was not

effectively designed to meet its intended purpose; 

(2) was not consistently incorporated into TVA policies 

and procedures and instances of noncompliance with 

some Protocol requirements are occurring; (3) contains 

no consequences for the applicant’s noncompliance with 

self-disclosure; and (4) contains no instructions on how an 

employee is to disclose knowledge of actual or apparent 

undue influence related to the Protocol limits, reducing the 

likelihood of identifying and preventing actual or apparent 

undue influence. In addition, we identified additional 

improvements to the Protocol documentation. 

TVA’s Contractor Workforce

Management (CWM)

The TVA relies on a combination of TVA employees and 

contractors to meet its labor needs. We audited TVA’s 

Contractor Workforce Management (CWM) process 

for acquiring craft and noncraft staff augmentation labor 

to determine (1) whether the process was operating as 

intended and (2) risks were being adequately mitigated. 

The process’ intended purpose, according to TVA’s CWM 

policy, is to “maintain the highest performing contractor 

workforce at the lowest total cost of ownership.” 

We found no assurance the process is operating as 

intended, and some risks are not adequately mitigated. 

Specifically, we found (1) the process is primarily a 

mechanism for acquiring and processing contractor 

employees to augment TVA staff rather than a process 

to ensure TVA’s broader objective of maintaining a high 

performing, low-cost contractor workforce; (2) controls 

around the duration of contractor employment can be 

improved; (3) numerous exceptions to a control that 

capped noncraft staff augmentation contractor salaries were 

being granted; (4) hiring managers were able to choose 

job positions in the system with higher pay rates than 

the position actually being filled; (5) performance metrics 

specific to the CWM process were not being calculated; 

and (6) contractor data inaccuracies and errors exist 

within TVA’s HR system and contractor hiring and invoicing 

system. 

We also identified three CWM process risks that, in our 

opinion, may not be adequately mitigated. These risks 

include:

• Opportunity to avoid TVA’s Citizenship Requirements 

policy.

• Potential for unintended employer-employee relationships.

• Reliance on contractors to comply with U.S. Citizenship 

and Immigration Services guidance.

We made recommendations to TVA management. TVA 

management agreed with our recommendations and is 

taking corrective action. 

Verification of TVA’s Compliance

with the Green Pricing Accreditation

Program Requirements for Calendar

Year 2014

TVA’s Green Power Switch Program supports the 

production of electric power from renewable resources 

such as solar, wind, and methane gas, and adds such 

sources to TVA’s power mix. TVA certifies the Green 

Power Switch program with the CRS which promotes the 

development of renewable energy. The OIG completed 

agreed-upon procedures to assist the CRS in determining 

TVA’s compliance with the annual reporting requirements 

of the CRS Green Pricing Accreditation Program for the 

year ended December 31, 2014. 

These procedures included steps to verify the renewable 

energy supply was sufficient to meet sales; products met 

the Green-e criteria and stated product content; and 

marketing as well as product information was accurate and 

communicated to customers. The results of the procedures 

verified that TVA’s Green Power sales were based on 

electricity generated or acquired from eligible renewable 

sources and otherwise met the above aspects. CRS was 

provided with results of the procedures applied.
46TVA OIG Semiannual Report 

During this semiannual period, Evaluations completed six reviews in the areas of Hydro Generation 

obsolete equipment, Nuclear outage performance, fire protection systems at Transmission and 

Hydro Generation facilities, and firearms and ammunition. One review is not included in this 

discussion due to its sensitive nature.

SUMMARY OF 

REPRESENTATIVE

EVALUATIONS
TVA OIG Semiannual Report47

Hydro Generation Obsolete 

Equipment

Based on TVA’s aging equipment and the risk of parts being 

unavailable, we scheduled a review of Hydro Generation 

obsolete equipment. The objective of our review was to 

determine if Hydro Generation is effectively managing 

obsolete equipment. 

According to TVA, though hydroelectric power is only 

about 10 percent of TVA’s power generation capacity, its 

value to the TVA system cannot be measured by megawatts 

alone. Hydropower has other advantages that make it 

extremely valuable in an increasingly competitive utility 

industry where low-cost generation and reliable service 

are critical priorities. TVA has 29 conventional hydropower 

plants with 109 individual units, which play a vital role in 

achieving TVA’s mission of providing affordable and reliable 

electricity, managing a thriving river system, and supporting 

sustainable economic development.

During our review, we found Hydro Generation could 

more effectively manage obsolete equipment. We found 

no documented guidance to specify how obsolete 

equipment should be managed. In addition, we found 

obsolete equipment has extended outage durations. We 

also found some equipment condition assessments include 

an “Availability of Spare Parts” indicator, which measures 

the availability and willingness of the original equipment 

manufacturer to support existing, installed equipment 

with parts and service; however, it is not included in the 

condition assessments for all equipment. TVA management 

agreed with our recommendations and is taking corrective 

action. 

Nuclear Outage Performance

This review was initiated to assess recent efforts of the 

TVA NPG to improve outage performance. The objective 

of the review was to determine whether (1) the initiatives 

implemented by the NPG to improve outage performance 

have achieved planned results and (2) current improvement 

efforts are adequate.

TVA’s three nuclear plants contribute about 

6,600 megawatts of electricity, about 30 percent of TVA’s 

power supply, to the power grid, making the NPG an 

integral part of the seven-state power system. According to 

TVA, as nuclear performance improves across the industry,

NPG’s challenge is to continue its mission to ensure safe 

plant operations and achieve its vision of being the best 

multi-site, nuclear power operator in the world.

According to the International Atomic Energy Agency,

the competitive environment for electricity has significant 

implications for nuclear power plant operations including,

among others, the need for efficient use of resources and 

effective management of plant activities such as on-line 

maintenance and outages. Nuclear power plant outage 

management is a key factor for good, safe, and economic 

nuclear power plant performance. There are many aspects 

to outage management including plant policy, coordination 

of available resources, nuclear safety, regulatory 

requirements, technical requirements, etc. TVA’s NPG had 

recent initiatives aimed at improving outage performance,

the main measures of which include dollars, duration, and 

dose. Current goals for refueling outages are to meet 

or exceed industry top quartile of less than 29.67 days 

duration and operations and maintenance cost of less than 

$36 million. 

 We found cost structure development and controls 

initiatives have improved outage performance with respect 

to cost; however, outage duration and dose continue to 

miss business plan goals. Additionally, we found outage 

performance initiatives have continually changed and 

excellence/improvement initiative plans do not include 

all planned actions. While some initiatives have been 

completed, others are ongoing and have rolled over to 

different plans, making it challenging to tie changes to 

measurable results. TVA management agreed with our 

recommendations and is taking corrective action.

Transmission Fire Protection

Fires in substations can severely impact the supply of power 

to customers and utilities’ revenue and assets. These fires 

can also create a fire hazard to utility personnel, emergency 

personnel, and the general public. There are 14 sites 
48TVA OIG Semiannual Report 

managed by Transmission that have fire protection systems 

to protect their 500-kilovolt transformers. This review 

was initiated based on findings from a previous review of 

fire protection at coal plants. The objective of this review 

was to determine if fire protection systems are established 

and maintained to effectively manage fires within the TVA 

transmission system. 

According to TVA management, fire protection systems 

have been established where needed; however, the current 

systems have antiquated equipment that is being replaced 

as funding allows. These upgrades do not include modifying 

the water supply. The current system’s water supply does 

not meet National Fire Protection Association code or 

TVA policy requirements. However, TVA management 

indicated that TVA is not required to meet national code. 

The risk fire protection systems will not function effectively 

is increased because of the condition of systems and the 

systems not meeting national code or TVA requirements. 

Additionally, according to TVA management, maintenance 

is performed or requested by personnel at the Transmission 

Service Center; however, maintenance is not always 

documented. We found there are no requirements to track 

the fire protection systems or their condition. In addition,

the inspections that are part of the preventive maintenance 

program are not conducted consistently. There is an 

increased risk that an issue could go unrecognized if 

systems are not being consistently inspected and the 

condition tracked. TVA management generally agreed with 

our recommendations and is taking corrective action. 

Hydro Generation Fire Protection

This review was initiated based on findings from a previous 

review of fire protection at coal plants. The objective of our 

recent review was to determine whether fire protection 

systems are adequately maintained and mitigating actions 

are taken to minimize the impacts of fires at TVA hydro 

generation plants. 

Wilson Dam
TVA OIG Semiannual Report49

TVA’s 29 conventional hydropower plants and Raccoon 

Mountain Pumped-Storage Plant play a strategic role in 

TVA’s mission of providing affordable, reliable electricity,

managing a thriving river system, and supporting sustainable 

economic development. Although TVA’s hydroelectric 

generation is only 10 percent of generation capacity, it 

offers other advantages such as being emissions free and 

the least expensive source of generation. 

While the likelihood of fire is lower at hydro plants than 

at coal plants, they are not without fire risk. Hydroelectric 

stations share many of the same fire hazards as coal 

plants such as oil-filled transformers, electrical cables and 

switchgear, air-cooled generators, and large quantities of 

combustible hydraulic oil. Hydro plants pose extreme 

safety issues and rescue risks because of limited building 

access, lack of natural lighting, and embedded structures, all 

of which increase the potential for a fire on a higher level to 

trap workers on a lower level. 

During our review, TVA indicated that fire protection 

systems and equipment are generally being maintained 

and in good condition with some exceptions. Additionally,

Hydro Generation is making improvements to condition 

assessments of fire protection equipment. However, we 

found mitigating actions to decrease the impact of fires 

could be strengthened in four areas: (1) risk assessment 

reports indicated that hydro plants could use more fire 

protection equipment and process enhancements to 

documentation of inspection, testing, and maintenance 

are still needed; (2) TVA indicated fire drills are being 

conducted on a routine basis, but are not documented as 

required, fire incidents are not being tracked, and lessons 

learned are being shared inconsistently; (3) TVA has not fully 

implemented the Emergency Response Liaison role; and 

(4) the increased risk from replacing the liaison role has not 

been included as a TVA enterprise risk. TVA management 

generally agreed with our recommendations and is taking 

corrective action. 

Firearms and Ammunition

In response to the increasing workplace violence incidents 

throughout the country, we initiated a review of TVA’s 

firearms and ammunition. TVA Police and Emergency 

Management (TVAP&EM) is charged with providing security 

and crisis/emergency management services for all TVA 

personnel, facilities, and other assets. Part of accomplishing 

this mission requires that firearms and ammunition are 

properly accounted for and safeguarded. The objective of 

our review was to determine if firearms and ammunition 

are properly accounted for and safeguarded. Our review 

found TVAP&EM is accounting for and safeguarding firearms 

and ammunition. Firearms not issued are safeguarded in 

secured storage areas; these firearms, and those issued to 

TVAP&EM employees, are accounted for through an annual 

hands-on inventory. Also, during testing, TVAP&EM was 

able to provide documentation for a sample of firearms 

either destroyed or transferred.

Our work, however, did identify opportunities for 

improvement in certain areas. While TVAP&EM guidelines 

require all TVA-issued firearms to be carried while on duty,

one employee was unable to initially provide a firearm for 

physical inventory. Additionally, while TVAP&EM was able 

to provide documentation for destroyed and transferred 

firearms, some improvements could be made in relation 

to compliance with the guidelines for the documentation 

of transfers. Finally, there were a few instances in the 

guidelines regarding firearms and ammunition responsibility 

that did not match actual practice. TVA management 

agreed with two of the three recommendations and is 

taking corrective action. Management disagreed with the 

third recommendation but did change a work instruction to 

address the finding.
50TVA OIG Semiannual Report 

This reporting period, we opened 126 cases and closed 142. Our investigative results include 

recoveries, savings, fees, and projected savings of more than $3 million, one indictment, and one 

conviction. Significant representative activities are following.

SUMMARY OF 

REPRESENTATIVE

Investigations
TVA OIG Semiannual Report51

Related OIG Investigations Net

$1 Million Recovery and $1.8 Million

Savings to TVA

This investigation was initiated after TVA OIG received an 

allegation that a TVA contract employee had engaged in 

inappropriate behavior associated with his role in the TVA 

Energy Services Company (ESCO) program. The former 

TVA ESCO program provided energy efficiency services to 

customers such as military installations and schools. 

During a previous reporting period, our investigation 

determined the contract employee had accepted tickets 

to a college football game from an ESCO vendor. In 

response to our findings, TVA Industrial Marketing Senior 

Management terminated this individual’s contract and 

initiated a comprehensive review of the ESCO program.

Our investigation into TVA ESCO personnel regarding 

contract-related misconduct found, in addition to the 

acceptance of college football tickets, (1) misuse of 

government property, (2) unethical conduct, and (3) loss of 

confidence in ability to perform the job.

Subsequent investigation into one of the primary TVA 

ESCO contractors determined that one contractor had 

overbilled TVA and had included clearly unallowable costs. 

TVA Office of the General Counsel and Supply Chain 

management personnel were briefed on the findings and 

pursued a defective pricing claim. As a result, TVA and 

the contractor entered into a negotiated supplemental 

agreement whereby the contractor will repay TVA a total of 

$1 million. 

As a result of a related OIG investigation, TVA changed 

associated processes and controls which led to the rebid of 

the contract and resulted in a savings of $1.8 million.

Ethics Violation and Document

Security Breach

OIG investigative work revealed a senior executive advisor 

violated ethics policies by engaging in an inappropriate 

relationship with a TVA vendor, including coaching the 

vendor on how to respond to TVA to gain a competitive 

advantage, revealing “TVA Confidential” information 

involving other vendors, and making damaging comments 

about TVA coworkers who were part of the bidding 

process. We reported our findings to TVA management. 

The individual’s employment was immediately terminated 

with a restriction should the individual seek reemployment 

at TVA.

During the course of the inquiry, we also discovered 

documentation the former employee had improperly 

disclosed to a vendor which had been obtained from TVA 

personnel who, in the course of their duties, routinely 

provided confidential data to various offices within TVA and 

to external entities. Those persons were not implicated in 

unethical behavior; however, we discovered a majority of 

the confidential information the former manager obtained 

and improperly disclosed had not been marked “TVA 

Confidential” as required.

We reported this finding to management; and, as a result,

supervising managers in this organization completed 

required reading of the TVA Information Management 

Policy, and routine reports have been reviewed and 

updated to include the applicable marking as required to 

enhance and maintain security.

Tool Room Thefts Adjudicated

Sequoyah Nuclear Plant reported drills, saws, and other 

materials valued at more than $3,000 missing from its tool 

room. Video surveillance was reviewed, which assisted in 

identifying two contractor employees leaving the plant with 

large bags filled with unknown contents. The discharged 

former contractors both were indicted on one count of 

theft of more than $1,000 in Tennessee state court on 

February 19, 2014. One of the individuals made restitution 

to TVA of approximately $900, thus avoiding prosecution. 

On May 18, 2015, the other individual pled guilty to a 

lesser count of theft, was ordered to make equivalent 

restitution, and was sentenced to 11 months and 29 days of 

confinement; however, the sentence was suspended. Both 

are restricted from future TVA employment.
52TVA OIG Semiannual Report 

Former TVA Employee Indicted on

Wire Fraud, Embezzlement Charges

An OIG investigation of TVA credit card abuse uncovered 

a variety of unauthorized payments, possibly totaling more 

than $60,000, to a former employee. On September 1,

2015, the former employee was indicted in federal court 

on charges of 10 counts of wire fraud and 1 count of 

embezzlement. The indictment charges the individual with 

using his TVA-assigned credit card to purchase hotel stays 

unconnected to his TVA duties and to purchase diesel 

fuel for third parties in exchange for cash. The final count 

of the indictment charges the former employee with 

embezzlement for converting TVA property valued at more 

than $1,000 to his personal use. Prosecutive action is 

ongoing.

Civil Agreement Garners More Than

$100,000

Based on our investigation, a Valley medical provider,

TVA, and the U.S. Department of Justice entered into 

an agreement whereby the provider paid the U.S. 

$123,036.38—$59,672.64 of which was paid to TVA as 

restitution and the remainder in penalties and fees.

The provider’s patients included local TVA employees and 

retirees, whose medical care is ultimately paid by TVA 

(through BlueCross BlueShield, which administers TVA’s 

medical benefits plan). The parties to the settlement agreed 

that the provider lacked documentation for several key 

facets of its billing during a three-year period. In addition to 

the settlement, the OIG investigation resulted in a projected 

five-year savings to TVA of $97,134, based on the provider’s 

inability to continue past billing practices. 

UPDATES

Police Corruption Probe Concluded

We previously reported six former Knoxville-area law 

enforcement officers, including a former TVA Police (TVAP) 

officer, pled guilty to misusing their positions of authority 

by personally receiving payment to protect high-stakes 

gambling, most notably a $1 million poker game during 

November 2009. In addition to the former TVAP officer,

other former officers were members of the University of 

Tennessee Police Department (UTPD), the Knox County 

Sheriff’s Office (KCSO), or the Pigeon Forge Police 

Department (PD).

Sentencing for all involved individuals concluded this 

reporting period. Two were sentenced during the prior 

period—the former TVAP officer to two months of home 

detention and three years of probation; the former UTPD 

officer to six months of home detention and three years 

of probation. During April 2015, two former members of 

KCSO were sentenced to two months of home detention 

and three years of probation. One former KCSO deputy 

was sentenced to one year of probation, and the former 

Pigeon Forge PD detective was ordered to serve nine 

months of home detention and three years of probation. 

The high-stakes poker games were one element of a longterm undercover operation conducted by the FBI with 

assistance from TVA OIG and other agencies.

Former TVA Vendor Debarred from

Participating in Federal Contracts

As previously reported, a TVA OIG investigation resulted 

in former TVA vendor Frank Lewis Conn’s indictment on 

five counts of wire fraud. Mr. Conn was an owner of a 

company that contracted with TVA to remove vegetation 

from power lines and other TVA property across the 

Tennessee Valley. The federal indictment alleged he devised 

a scheme to defraud TVA of $152,712 through the use of 

fraudulently inflated invoices. Based on his January 2014 

guilty plea to one count of the indictment, he appeared for 

sentencing May 28, 2014. Mr. Conn was ordered to pay 

TVA $72,000 restitution and sentenced to three months 

of home detention and two years of probation. The judge 

additionally mandated he write an essay for publication in 

his local newspaper describing the difference between a 

“mistake” and a “deliberate choice.”

During this reporting period, Mr. Conn and two associated 

businesses—Conn Equipment Rental Company, Inc., and 

Vegetation Management Services—were debarred from 

participating in federal contracts until June 30, 2018.
TVA OIG Semiannu

al Report53

Nottley Dam
54TVA OIG Semiannual Report 

Section 4(a) of the Inspector General Act of 1978, as amended, provides that the Inspector General 

shall review existing and proposed legislation and regulations relating to programs and operations 

of such establishment and make recommendations in the semiannual reports...concerning the 

impact of such legislation or regulations on the economy and efficiency in the administration of 

such programs and operations administered or financed by such establishment or the prevention 

and detection of fraud and abuse in such programs and operations. 

LEGISLATION AND 

REGULATIONS
TVA OIG Semiannual Report55

In this section of our semiannual 

report, it is our intent to address only 

current and pending legislation which 

relates to the economy or efficiency 

of TVA operations when we have 

recommendations or comments 

to make to Congress regarding the 

legislation. At times, we may direct 

recommendations to general positions 

and issues, particularly when there 

are multiple bills dealing with the issue. 

At other times, we anticipate making 

recommendations relating to particular 

statutes and bills and their particular 

wording.

During this reporting period, we are 

not making any recommendations to 

Congress regarding current or pending 

legislation.

Kingston 

Fossil Plant
56TVA OIG Semiannual Report 

APPENDICES
TVA OIG Semiannual Report57

REPORTING REQUIREMENT PAGE

Section 4(a)(2) Review of Legislation and Regulations 54-55

Section 5(a)(1) Significant Problems, Abuses, and Deficiencies 36-52

Section 5(a)(2) Recommendations With Respect to Significant Problems, Abuses, and

Deficiencies 36-52

Section 5(a)(3) Recommendations Described in Previous Semiannual Reports on Which

Corrective Action Has Not Been Completed Appendix 4

Section 5(a)(4) Matters Referred to Prosecutive Authorities and the Prosecutions and

Convictions That Have Resulted Appendix 5

Section 5(a)(5) and 6(b)(2) Summary of Instances Where Information Was Refused None

Section 5(a)(6) Listing of Audit and Evaluation Reports Appendix 2

Section 5(a)(7) Summary of Particularly Significant Reports 36-52

Section 5(a)(8) Status of Management Decisions for Audit and Evaluation Reports

Containing Questioned Costs Appendix 3

Section 5(a)(9) Status of Management Decisions for Audit and Evaluation Reports

Containing Recommendations That Funds Be Put to Better Use Appendix 3

Section 5(a)(10)

Summary of Audit and Evaluation Reports Issued Prior to the Beginning

of the Reporting Period for Which No Management Decision Has Been

Made

None

Section 5(a)(11) Significant Revised Management Decisions None

Section 5(a)(12) Significant Management Decisions With Which the Inspector General

Disagreed None

Section 5(a)(13) Information Under Federal Financial Management Improvement Act of 

1996

Not 

Applicable

Section 5(a)(14)

Appendix of results of any peer review conducted by another Office of the

Inspector General during the reporting period, and if none, a statement of

the date of the last peer review.

Appendix 8

Section 5(a)(15)

List of outstanding recommendations from any peer review conducted by

another Office of the Inspector General, including a statement describing

the status of the implementation and why implementation is not complete.

None

Section 5(a)(16)

List of peer reviews conducted of another Office of the Inspector

General during the reporting period, including a list of any outstanding

recommendations made from any previous peer review that remain

outstanding or have not been implemented.

Appendix 9

INDEX ON REPORTING REQUIREMENTS UNDER THE IG ACT

Appendix 1
58TVA OIG Semiannual Report 

OIG AUDIT REPORTS • Issued During the Six-Month Period Ended September 30, 2015

Report Number 

and Date Title Questioned

Costs

Unsupported 

Costs

Funds Put To

Better Use

CONTRACT AUDITS

2014-15239 

04/14/2015

AREVA NP, Inc. – Review of Annual Rate Adjustments – Contract

No. 004027 $7,436,606 $0 $0

2014-15042 

04/22/2015 Geosyntec Consultants, Inc. 162,307 0 0

2014-15031 

06/23/2015 Adequacy of Invoice Approval Process 0 0 0

2014-15248 

06/23/2015 Hayward Baker, Inc. – Contract No. 6902 0 0 0

2015-15309 

08/04/2015

Proposal For Hydro Modernization, Unit Rehabilitation, and

Functional Support Services 0 0 2,106,300

2014-15240 

08/11/2015 Contractor’s Rework and Damages Liability 0 0 0

CORPORATE GOVERNANCE AND FINANCE AUDITS

2014-15024 

09/09/2015 TVA Employee Overtime $0 $0 $0

2015-15307

09/28/2015 TVA Executive Incentives 0 0 0

OPERATIONAL AUDITS

2015-15295 

06/01/2015

Agreed-Upon Procedures to Verify TVA’s Compliance with the

Green Pricing Accreditation Program Requirements for Calendar

Year 2014

 $0 $0 $0

2014-15078 

06/25/2015

Effectiveness of TVA’s Process to Address Nuclear Emerging 

Regulatory Issues 0 0 0

2014-15234 

06/25/2015 TVA’s Talent Acquisition and Deployment Process 0 0 0

2014-15242 

09/29/2015 TVA Contractor Workforce Management 0 0 0

2014-15080 

09/30/2015 Integrated Resource Planning Process 0 0 0

2014-15224 

09/30/2015 Obtaining Things of Value 0 0 0

Appendix 2
TVA OIG Semiannual Report59

OIG AUDIT REPORTS • Issued During the Six-Month Period Ended September 30, 2015 (CONTINUED)

OIG Evaluation REPORTS • Issued During the Six-Month Period Ended September 30, 2015 

Report Number 

and Date Title Questioned

Costs

Unsupported 

Costs

Funds Put To

Better Use

INFORMATION TECHNOLOGY AUDITS

2014-15211 

04/09/2015 COMTRAC Implementation $0 $0 $0

2014-15063-01 

06/04/2015

Information Technology Organizational Effectiveness – Enterprise

Information Security and Policy 0 0 0

2015-15292 

06/25/2015 Electronic Communication by the TVA Board of Directors 0 0 0

2014-15063-02 

08/04/2015

Information Technology Organizational Effectiveness – Enterprise

Architecture and Programs 0 0 0

2015-15279 

08/19/2015 Area Access Manager 0 0 0

2014-15063-03 

09/03/2015

Information Technology Organizational Effectiveness – Operations

Solutions Delivery 0 0 0

2014-15062 

09/10/2015 Maximo 7.5 Upgrade 0 0 0

2014-15063-04 

09/22/2015

Information Technology Organizational Effectiveness – Enterprise

Customer Operations 0 0 0

TOTAL AUDITS (22) $7,598,913 $0 $2,106,300

Report Number 

and Date Title QuestionedCosts

Unsupported 

Costs

Funds Put To

Better Use

2015-15269 

07/16/2015 Transmission Fire Protection $ 0 $ 0 $ 0

2015-15265 

07/24/2015 Hydro Generation Obsolete Equipment 0 0 0

2015-15271 

07/24/2015 Firearms and Ammunition 0 0 0

2015-15273 

07/24/2015 Nuclear Outage Performance 0 0 0

2015-15294 

07/24/2015 Hydro Generation Fire Protection 0 0 0

2015-15272 

09/29/2015 Significant Changes in TVA Dispatch Cost Compendium 0 0 0

TOTAL

Evaluations (6) $ 0 $ 0 $ 0

Note: A summary of or link to the full report may be found on the OIG’s Web site at www.oig.tva.gov.

Appendix 2
60TVA OIG Semiannual Report 

TABLE I • TOTAL QUESTIONED AND UNSUPPORTED COSTS • AUDITS

TABLE I • TOTAL QUESTIONED AND UNSUPPORTED COSTS • EVALUATIONS

Audit Reports Number

of Reports

Questioned

Costs Unsupported Costs

A. For which no management decision has been made by the

commencement of the period 0 $0 $0

B. Which were issued during the reporting period 2 $7,598,913 $0

Subtotal (A+B) 2 $7,598,913 $0

C. For which a management decision was made during the

 reporting period 2 $7,598,913 $0

1. Dollar value of disallowed costs 2 $2,156,279 $0

2. Dollar value of costs not disallowed 1 $5,442,634 $0

D. For which no management decision has been made by the

end of the reporting period 0 $0 $0

Evaluation Reports Number

of Reports

Questioned

Costs

Unsupported Costs

A. For which no management decision has been made by the

commencement of the period 0 $0 $0

B. Which were issued during the reporting period 0 $0 $0

Subtotal (A+B) 0 $0 $0

C. For which a management decision was made during the

 reporting period 0 $0 $0

1. Dollar value of disallowed costs 0 $0 $0

2. Dollar value of costs not disallowed 0 $0 $0

D. For which no management decision has been made by the

end of the reporting period 0 $0 $0

Appendix 3

1

1

 The total number of reports for which a management decision was made during the period differs from the sum of C(1) and C(2) when the same 

 report includes both recommendations agreed to by management and others not agreed to by management.
TVA OIG Semiannual Report61

TABLE II • FUNDS TO BE PUT TO BETTER USE • AUDITS

Audit Reports Number

of Reports

Funds To Be Put 

To Better Use

A. For which no management decision has been made by the commencement of the period 1 $1,067,000

B. Which were issued during the reporting period 1 $2,106,300

Subtotal (A+B) 2 $3,173,300

C. For which a management decision was made during the reporting period 1 $1,067,000

1. Dollar value of recommendations agreed to by management 1 $1,067,000

2. Dollar value of recommendations not agreed to by management 0 $0

D. For which no management decision has been made by the end of the reporting period 1 $2,106,300

Evaluation Reports Number

of Reports

Funds To Be Put 

To Better Use

A. For which no management decision has been made by the commencement of the period 0 $0

B. Which were issued during the reporting period 0 $0

Subtotal (A+B) 0 $0

C. For which a management decision was made during the reporting period 0 $0

 1. Dollar value of recommendations agreed to by management 0 $0

 2. Dollar value of recommendations not agreed to by management 0 $0

D. For which no management decision has been made by the end of the reporting period 0 $0

TABLE II • FUNDS TO BE PUT TO BETTER USE • EVALUATIONS

Appendix 3
62TVA OIG Semiannual Report 

Appendix 4

As of the end of the semiannual period, final corrective actions associated with 11 audits and 11 evaluations/inspections reported in

previous semiannual reports were not completed. Presented below for each audit and evaluation are the report number, date, and a brief

description of final actions planned to resolve the open recommendations, including the date management expects to complete final

action.

Audit Report 

Number and Date Report Title and Recommendation(s) for Which Final Action is Not Complete

2010-13132

06/15/2011

Physical and Logical Access for Contractors

TVA agreed to create a matrix to cross-reference TVA roles to assets and identify the associated qualification and

background requirements needed to gain access to that asset and develop a process to restrict contractor access to

sensitive data and assets until the proper clearances have been obtained. Management expects to complete final

action by June 30, 2016.

2012-14567 

01/30/2013

Building and Infrastructure Failure Risks

TVA agreed to enhance Tririga functionality and other tools for building asset information and address weaknesses in

the Tririga production database. Management expects to complete final action by December 31, 2015.

2013-15104 

02/12/2014

PowerWAN Security and Architecture

TVA Management agreed to develop policies and practices to ensure legitimate traffic is traversing the PowerWAN

network. Management expects to complete final action by April 1, 2016.

2013-14959 

08/07/2014

TVA Environmental Risk Management

TVA Environment and Energy Policy group will update TVA’s Environmental Management System to better describe

environmental review processes and responsibilities. Management expects to complete final action by September 30,

2017.

2014-15036 

09/03/2014

Bartlett Holdings, Inc. – Bechtel Power Corporation Subcontract

TVA agreed to recover $1,484,582 in questioned payroll tax and insurance costs and related fee; $60,287 in ineligible

costs for an employee who did not maintain a permanent residence more than 60 miles from his assigned workplace;

and $2,565 in ineligible labor costs and fee. Management expects to complete final action by March 31, 2016.

2014-15065 

09/23/2014

Network Security Zones and Perimeter Architecture 

TVA agreed to design a new cable plant system and install new conduit and cables. Management expects to

complete final action by March 18, 2016.

2014-15037 

11/17/2014

Bechtel Power Corporation

TVA agreed to recover $923,231 in overbilled labor and related costs; $938,928 in ineligible or unsupported

relocation, permanent and temporary assignment and travel costs; and $204,336 in ineligible or unsupported affiliate

company and subcontractor costs. Management expects to complete final action by March 31, 2016.

2014-15044 

11/19/2014 

Nexant, Inc.

TVA agreed to pursue recovery of $269,009 in excessive labor costs; $144,570 in ineligible labor costs; $18,267

in ineligible employee travel costs; and $67,189 in ineligible incentive costs, of which, to date, TVA has recovered

$15,685. Management expects to complete final action by November 19, 2015.

AUDIT AND EVALUATION REPORTS WITH CORRECTIVE ACTIONS PENDING 
TVA OIG Semiannual Report63

Audit Report 

Number and Date Report Title and Recommendation(s) for Which Final Action is Not Complete

2014-15059

01/13/2015

2014 Federal Information Security Management Act

TVA agreed to implement Interconnection Service Agreements (ISA) for each contractor system as appropriate and

document justifications for systems that have not implemented ISAs. TVA agreed to update or create procedures

as appropriate to address the program for training users who have been designated as having significant security

responsibilities. TVA also agreed to document the FIPS 199 rating of systems and maintain documentation of the

System Security Plan or status for those systems, including controls selected, system role holders, and projected dates

for system authorization completion. TVA agreed, where appropriate, to document and implement a Continuous

Monitoring Plan for the system. Finally, TVA agreed to generate remediation tickets to the appropriate responsible

parties for addressing deviations. Quarterly tickets will be generated for Compute, Network, and Database areas

to review vulnerability and baseline configurations deviations. Tasks will then be added to remediate or accept any

deviations found. TVA agreed to also update TVA-SPP-12.04, TVA Cyber Security Patch & Vulnerability Management

Program, to clarify Time to Remediate and define expectations for remediation. Management expects to complete

final action by December 11, 2015.

2014-15060 

02/19/2015

Biennial Review – Use and Protection of Personally Identifiable Information

TVA agreed to (1) modify policy and automate annual access review by managers, who will also conduct periodic clean

desk reviews and report findings to the privacy office; (2) review systems containing restricted personally identifiable

information (RPII) and make necessary classification changes and track the disposition of RPII surveys and document

resolution; and (3) align training for information owners and privacy system security officers with other ongoing

training efforts. Management expects to complete final action by February 29, 2016.

2015-15278 

03/05/2015

Contractor Rate Review 

TVA agreed to negotiate fringe benefits which more accurately reflect the contractor’s actual historical costs, use

the Hourly Craft Superintendent classification provided for in TVA’s labor agreements as a lower cost option, when

available, and seek recovery of any over-billed charges. Management expects to complete final action by

March 4, 2016.

Evaluation Report 

Number and Date Report Title and Recommendation(s) for Which Final Action is Not Complete

2012-14535 

03/21/2013

Master Key Program Management – Energy Delivery

TVA agreed to secure facilities protected by master keys to minimize the risk posed by keys outside TVA’s control and

develop specifications for the purchase of a new system. A contract has been awarded and management expects to

complete final action by June 30, 2017.

2012-14636 

08/28/2013

Master Key Program Management – Property & Natural Resources

TVA agreed to develop standard policies and procedures. Management expects to complete final action by

October 15, 2015.

2013-14950 

09/19/2013

TVA’s Succession Planning 

TVA management agreed to (1) continue to evaluate ways to improve cross-pollination using a system to reduce

preparation time and plan to submit a proposal for a new system during fiscal year 2016 business planning, and

(2) identify critical executive positions. Management expects to complete final action by September 30, 2016.

2012-14587 

10/17/2013

Nuclear Power Group and Coal and Gas Operations Critical Spare Parts Program

TVA agreed to (1) develop the appropriate procedures to define the roles, responsibilities, and accountabilities of

key persons, and define the decision and approval process in regard to the procurement of critical spares; (2) define

maintenance program accountabilities for inventory including critical spares; (3) take steps to follow up on actions

recommended by the management consulting firm; and (4) define the decision and approval process for the removal

of the critical spare designation from spare parts in inventory. Management expects to complete final action by

November 5, 2015.

AUDIT AND EVALUATION REPORTS WITH CORRECTIVE ACTIONS PENDING (continued) 

Appendix 4 
64TVA OIG Semiannual Report 

Appendix 4

Evaluation Report 

Number and Date Report Title and Recommendations for which Final Action is Not Complete

2013-15157 

06/05/2014 

Actions to Address River Operations Systems and Components with Poor Ratings

TVA agreed to develop a 10-year asset management plan to further document risks and develop a long-term strategy

for addressing major components with poor ratings across the non-nuclear fleet. Management expects to complete

final action by September 30, 2016.

2013-15135 

07/30/2014

Actions to Address Coal Plant Systems and Programs with Poor Ratings

TVA agreed to (1) document justification when actions are not taken to address systems and programs with red and

yellow ratings, (2) reinforce the importance of consistent documentation of system health reports, and (3) consider the

potential impact of eliminating the requirement to do asset health assessments on TVA’s non-nuclear asset condition

risk and determine a schedule for completing health assessments that will adequately mitigate the risk of equipment

failure. Management expects to complete final action by March 31, 2016.

2014-15056 

09/25/2014

Nuclear Groundwater Review

TVA agreed to form a groundwater working group with representatives from all sites to address outstanding program

weaknesses. Management expects to complete final action by September 30, 2016.

2014-15053 

09/29/2014

Coal Plant Preventive Maintenance

TVA agreed to (1) increase preventive maintenance (PM) completion and reduce deviations from PM schedules and

reinforce the importance of PM activities, (2) develop a way to more accurately capture and report PM compliance

and other appropriate PM tracking metrics, (3) expedite maintenance basis optimization efforts, and (4) consider the

potential impact of having PM governed only by guidelines and not requirements. Management expects to complete

final action by April 15, 2016.

2014-15216 

09/29/2014

Follow-Up Review of Coal Fire Protection

TVA agreed to prioritize impairments and establish a due date for long-term fire impairments or make a formal

decision to not pursue repair; train employees on work management priorities for fire impairments; track high-priority

fire impairments to resolution using a monthly scorecard; revise policies and procedures (Standard Programs and

Processes [SPP]) to allow a formal non-conformance process; take inventory to determine baseline equipment status;

revise SPPs to include a standard equipment list and develop an action plan to replace or purchase needed equipment

to fill gaps; revise SPPs to require a Problem Evaluation Report when minimum staffing is not met; revise SPPs to

require capturing and sharing of lessons learned for all fires; and revise SPPs to include a new rating calculation and

process for sharing assessment data with Power Operations senior leadership. Management expects to complete final

action by December 31, 2016.

2012-14882 

09/30/2014

Injury Reporting at TVA

TVA agreed to improve the reporting of injuries including establishment of a process for reconciling Form 1444 to

Form 17719. Additionally, TVA agreed to evaluate the potential influence of the corporate multiplier on the reporting

of recordable injuries. Management expects to complete final action by March 31, 2016.

2014-15048 

12/22/2014

Natural Gas Monitoring

Fuel Accounting agreed to contact the vendor for the return of money due. Management expects to complete final

action by October 16, 2015.

AUDIT AND EVALUATION REPORTS WITH CORRECTIVE ACTIONS PENDING (continued) 
TVA OIG Semiannual Report65

Appendix 5

INVESTIGATIVE REFERRALS AND PROSECUTIVE RESULTS1

Referrals

Subjects Referred to U.S. Attorneys 18

Subjects Referred to State/Local Authorities 2

Results

Subject Indicted/Information Filed 1

Subjects Convicted 1

Pretrial Diversion 0

Federal Referrals Declined 14

State Referrals Declined 0

1 These numbers include task force activities and joint investigations with other agencies.

Colbert

Fossil Plant
66TVA OIG Semiannual Report 

Appendix 6 

HIGHLIGHTS – STATISTICS

SEPT 30,

2015

MAR 31, 

2015 

SEPT 30,

2014 

MAR 31,

2014

SEPT 30,

2013

AUDITS

AUDIT STATISTICS

Carried Forward 28 28 24 28 38

Started 21 11 20 17 21

Canceled (1) (0) (1) (1) (1)

Completed (22) (11) (15) (20) (30)

In Progress at End of Reporting Period 26 28 28 24 28

AUDIT RESULTS (Thousands)

Questioned Costs $7,599 $8,908 $2,612 $635 $2,916

Disallowed by TVA $2,156 $8,908 $2,612 $308 $647

Recovered by TVA $2,981 $89 $484 $164 $2,447

Funds to Be Put to Better Use $2,106 $1,067 $512 $9,584 $36,522

Agreed to by TVA $1,067 $512 $414 $20,938 $23,100

Realized by TVA $142 $7,375 $13,114 $375 $2,479

OTHER AUDIT-RELATED PROJECTS

Completed 7 5 10 5 5

Cost Savings Identified/Realized (Thousands) $0 $0 $0 $0 $0

EVALUATIONS

Completed 6 1 10 3 6

Cost Savings Identified/Realized (Thousands) $0 $0 $0 $0 $0

INVESTIGATIONS1

INVESTIGATION CASELOAD

Opened 126 126 134 112 173

Closed 142 146 123 148 158

In Progress at End of Reporting Period 134 152 163 150 179

INVESTIGATIVE RESULTS (Thousands)

Recoveries $1,064.0 $522.2 $89.1 $10,874.7 $899.9

Savings/Projected Savings $1,897.1 $403.3 $125.0 $0 $550.4

Fines/Penalties/Fees $64.1 $0.2 $0.8 $1 $603.8

Other Monetary Loss $0 $0 $0 $0 $519.3

MANAGEMENT ACTIONS

Disciplinary Actions Taken (Number of Subjects) 14 10 14 22 18

Counseling/Management Techniques Employed (Number of Cases) 9 17 11 14 20

Debarment 3 0 0 0 0

PROSECUTIVE ACTIVITIES (Number of Subjects)

Referred to U.S. Attorneys 18 8 16 14 18

Referred to State/Local Authorities 2 0 0 2 0

Indicted/Information Filed 1 6 0 5 0

Convicted 1 6 0 1 2

Pretrial Diversion 0 0 0 1 0

1 These numbers include task force activities and joint investigations with other agencies.

2 $12,573 of this amount is restitution ordered to be paid to a nongovernmental financial institution as the result of a criminal investigation.

3 $10,794,728 of this total is restitution ordered in a TVA OIG led federal criminal case. The defendant was ordered to repay victims of a Ponzi scheme, the 

 largest portion of which was comprised of his fraudulent collection of money from Valleywide investors under the pretense that they were helping fund the 

 Kingston ash spill remediation.

2 3
TVA OIG Semiannual Report67

Appendix 7

Government Contractor Audit Findings

The National Defense Authorization Act for Fiscal Year 2008, P.L. 110-181, requires each Inspector General appointed under 

the Inspector General Act of 1978 to submit an appendix on final, completed contract audit reports issued to the contracting 

activity that contain significant audit findings—unsupported, questioned, or disallowed costs in an amount in excess of 

$10 million, or other significant findings—as part of the Semiannual Report to Congress. During this reporting period, the 

Office of the Inspector General issued no contract review reports under this requirement.

Appendix 8

Appendix 9

PEER REVIEWS OF THE TVA OIG

Audits Peer Review

IG audit organizations are required to undergo an external peer review of their system of quality control at least once every 

three years, based on requirements in the Government Auditing Standards. Federal audit organizations can receive a rating of 

pass, pass with deficiencies, or fail. TVA OIG underwent its most recent peer review of its audit organization for the period 

ended September 30, 2013. The review was performed by the Special Inspector General for the Troubled Asset Relief Program 

(SIGTARP). The SIGTARP issued the report, dated March 31, 2014, in which it concluded the TVA OIG audit organization’s 

system of quality control for the fiscal year ended September 30, 2013, was suitably designed and complied with to provide 

the OIG with reasonable assurance of performing and reporting in conformity with applicable professional auditing standards in 

all material respects. Accordingly, the TVA OIG received a rating of pass. The peer review report is posted on our Web site at 

http://www.oig.tva.gov/PDF/PeerReviewReport03312014.

Investigations Peer Review

Investigative operations undergo an external peer review, Quality Assessment Review (QAR), at least once every three 

years. The United States Department of Commerce OIG conducted a QAR of the TVA OIG Investigative Operations. The 

Commerce OIG found the “...system of internal safeguards and management procedures for the investigative function of the 

Office of the Inspector General for the Tennessee Valley Authority in effect for the year ended April 30, 2013, is in compliance 

with the quality standards established by CIGIE and the applicable Attorney General guidelines. These safeguards and 

procedures provide reasonable assurance of conforming with professional standards in the planning, execution and reporting of 

its investigations.” The QAR report can be found on our Web site at http://oig.tva.gov/PDF/22NOV2013-tvaoig-inv-peer-review.

pdf.

PEER REVIEW OF INVESTIGATIVE OPERATIONS, 

U.S. DEPARTMENT OF STATE AND BROADCASTING BOARD 

OF GOVERNORS OFFICE OF THE INSPECTOR GENERAL

The TVA OIG completed a peer review of Investigative Operations, U.S. Department of State and Broadcasting Board of 

Governors Office of the Inspector General (DOS OIG) during this semiannual period. We issued our final report to DOS OIG 

on April 20, 2015. We reviewed the organization’s internal safeguards and management procedures in effect for the annual 

period ending January 31, 2015, and found the organization in full compliance with the quality standards established by the 

Council of the Inspectors General on Integrity and Efficiency and applicable Attorney General Guidelines.
68TVA OIG Semiannual Report 

Glossary
TVA OIG Semiannual Report69

Disallowed Cost 

A questioned cost that management, in a management decision, has sustained or agreed should not be charged to the 

agency.

Final Action 

The completion of all management actions, as described in a management decision, with respect to audit findings and 

recommendations. When management concludes no action is necessary, final action occurs when a management 

decision is made.

Funds Put To Better Use

Funds which the OIG has disclosed in an audit report that could be used more efficiently by reducing outlays,

deobligating program or operational funds, avoiding unnecessary expenditures, or taking other efficiency measures.

Improper Payment

Any payment that should not have been made or was made in an incorrect amount under statutory, contractual,

administrative, or other legally applicable requirements, as defined in the Improper Payments Improvement Act.

Management Decision

Evaluation by management of the audit findings and recommendations and the issuance of a final decision by 

management concerning its response to such findings and recommendations.

Questioned Cost

A cost the IG questions because (1) of an alleged violation of a law, regulation, contract, cooperative agreement, or 

other document governing the expenditure of funds; (2) such cost is not supported by adequate documentation; or 

(3) the expenditure of funds for the intended purposes was unnecessary or unreasonable.

Unsupported Costs

A cost that is questioned because of the lack of adequate documentation at the time of the audit.

Glossary
70TVA OIG Semiannual Report 

AIGI .............................................................................................................................. Assistant Inspector General Investigations

Blackberry.................................................................................................................................The Cove at Blackberry Ridge, LLC

Board...........................................................................................................................................................TVA Board of Directors

CIGIE ...............................................................................................Council of the Inspectors General on Integrity and Efficiency

CO ....................................................................................................................................................................Contracting Officer

CRS...................................................................................................................................................Center for Resource Solutions

CWM ...................................................................................................................................... Contractor Workforce Management

DOS OIG ................................U.S. Department of State and Broadcasting Board of Governors Office of the Inspector General

EAIP...............................................................................................................................................Executive Annual Incentive Plan

EAM.................................................................................................................................................Enterprise Asset Management

ECIE.......................................................................................................................... Executive Council on Integrity and Efficiency

ELTIP........................................................................................................................................Executive Long-Term Incentive Plan

EPU............................................................................................................................................................Extended Power Uprate

ERI ...................................................................................................................................................... Emerging Regulatory Issues

ERM................................................................................................................................................... Enterprise Risk Management

ESCO......................................................................................................................................................Energy Services Company

FBI ............................................................................................................................................... Federal Bureau of Investigation

FECA ..................................................................................................................................Federal Employees Compensation Act

FIA .............................................................................................................................................................. Field Invoice Approver

FISMA.................................................................................................................... Federal Information Security Management Act

FY ................................................................................................................................................................................. Fiscal Year

GAO ..........................................................................................................................................Government Accountability Office

Habitat............................................................................................................................................................Habitat for Humanity

HR ......................................................................................................................................................................Human Resources

HRT............................................................................................................................................................... Highland Ridge Tower

IG ......................................................................................................................................................................Inspector General

IRP .......................................................................................................................................................... Integrated Resource Plan

ISA ........................................................................................................................................ Interconnection Service Agreements

IT .............................................................................................................................................................Information Technology

IT1K .............................................................................................................................................................. 1,000 Days to Success

ITSA.............................................................................................................................................................IT Security Assessment

KCSO...................................................................................................................................................Knox County Sheriff’s Office

Kinder Morgan ........................................................................................................................ Kinder Morgan Limited Partnership

NPG...............................................................................................................................................................Nuclear Power Group

NRC..............................................................................................................................................Nuclear Regulatory Commission

OIG.................................................................................................................................................Office of the Inspector General

OPM ........................................................................................................................................... Office of Personnel Management

PCIE........................................................................................................................ President’s Council on Integrity and Efficiency

PD .....................................................................................................................................................................Police Department

PER......................................................................................................................................................Problem Evaluation Reports

PM ............................................................................................................................................................ Preventive Maintenance

Protocol................................................................................................................... Obtaining Things of Value from TVA Protocol

QAR......................................................................................................................................................Quality Assessment Review

RPII .......................................................................................................................... Restricted Personally Identifiable Information

Second Harvest .................................................................................................................................... Second Harvest Food Bank

SEIS ......................................................................................................................Supplemental Environmental Impact Statement

SIGTARP ....................................................................................Special Inspector General for the Troubled Asset Relief Program

Abbreviations & Acronyms

The following are acronyms and abbreviations widely used in this report.
TVA OIG Semiannual Report71

SPP ............................................................................................................................................Standard Programs and Processes

SWCI........................................................................................................................................Stone & Webster Construction, Inc.

TVA........................................................................................................................................................Tennessee Valley Authority

TVAP................................................................................................................................................................................TVA Police

TVAP&EM.......................................................................................................................TVA Police and Emergency Management

U.S........................................................................................................................................................... United States of America

UTPD ....................................................................................................................The University of Tennessee Police Department

WBN...........................................................................................................................................................Watts Bar Nuclear Plant

Office of the Inspector General

400 West Summit Hill Drive

Knoxville, Tennessee 37902

The OIG is an independent organization charged with 

conducting audits, evaluations, and investigations relating to 

TVA programs and operations, while keeping the TVA Board 

and Congress fully and currently informed about problems and 

deficiencies relating to the administration of such programs and 

operations. 

The OIG focuses on (1) making TVA’s programs and operations 

more effective and efficient; (2) preventing, identifying, and 

eliminating waste, fraud, and abuse and violations of laws, rules, 

or regulations; and (3) promoting integrity in financial reporting.

If you would like to report to the OIG any concerns about fraud, 

waste, or abuse involving TVA programs or violations of TVA’s 

Code of Conduct, you should contact the OIG EmPowerline 

system. The EmPowerline is administered by a third-party 

contractor and can be reached 24 hours a day, seven days a 

week, either by a toll-free phone call (1-855-882-8585) or over 

the Web (www.oigempowerline.com). You may report your 

concerns anonymously or you may request confidentiality. 

Report Concerns to the OIG Empowerline

The following are acronyms and abbreviations widely used in this report. (continued)

WATCH, LEARN AND BE

EMPOWERED

If you see or suspect wrongdoing and report it, TVA could recover money and you could 

receive a cash reward from the TVA Office of the Inspector General. Learn how by watching 

this revealing video. To watch this video now, simply scan the QR symbol at the lower right 

with your smart phone to be taken directly to the video. QR Code scan app required.

You can report wrongdoing to the Office of the Inspector General by visiting our EmPowerline® website 

at www.oigempowerline.com or by calling toll-free at 855-882-8585. See the EmPowerline® website for 

details on the cash reward process and other important information.
72 TVA OIG Semiannu

al Report

Office of the Inspector General

Tennessee Valley Authority

Semiannual Report

April 1, 2015 - September 30, 2015