Summary: Pursuant to a congressional request, GAO reviewed the operations of the Tennessee Valley Authority's (TVA) Office of the Inspector General (OIG), focusing on its duties, powers, performance, and independence.
GAO found that TVA OIG: (1) had audit and investigation powers and duties similar to those of other inspectors general; (2) reported directly to the TVA Board of Directors; (3) had unrestricted access to TVA records, reports, facilities, assets, and meetings, a separate budget, and the freedom to issue any report it considered necessary and desirable; (4) fully incorporated acceptable performance standards into policies and procedures; (5) took actions to improve communications with TVA managers and employees, report readability, audit and investigation planning, and audit follow-up; (6) satisfactorily complied with reporting requirements and audit and investigative standards; and (7) requested the transfer of some audit functions it believed involved program operating responsibilities to the TVA chief financial officer, although he had an inherent conflict of interest in assessing financial internal controls. GAO also found that the TVA Board of Directors: (1) established a minimum 3-year term for the Inspector General, but did not have to report to Congress on reasons why it did not reappoint an Inspector General for another term; (2) selected an individual outside of TVA to serve as Inspector General, and he selected his principal assistants from outside TVA; and (3) did not interfere with OIG work. GAO believes that there is no need for the President to appoint the TVA Inspector General, since the: (1) TVA Board adequately safeguarded OIG independence; and (2) Inspector General independently and objectively carried out his responsibilities.
