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Consulting Contracts

Report Information

Date Issued
Report Number
2022-17347
Report Type
Audit
Description
The Office of the Inspector General included an audit of the Tennessee Valley Authority’s (TVA) consulting contracts in our annual audit plan due to significant spend* in this area as well as the conflict of interest risks associated with this type of contract. Our audit objective was to determine if proper controls are in place to identify consulting contracts at TVA and limit the risks of conflicts of interest. We found TVA’s controls for identifying consulting contracts and limiting the risks of conflicts of interest were not operating effectively. In addition, we found the organizational conflict of interest (OCI) and Business Ethics and Compliance Requirements clauses that should be included in all TVA contracts are not consistently incorporated into consulting contracts. We also found no guidance for TVA Supply Chain personnel and suppliers that addressed (1) how to identify actual or potential OCIs or (2) how these OCIs are to be mitigated, resolved, or avoided during contract performance.*Our audit identified 129 consultants that were paid approximately $193.4 million for their services between October 1, 2017, and February 28, 2022.
Joint Report
Yes
Participating OIG
Tennessee Valley Authority OIG
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View report on Oversight.gov

Recommendations

We recommend the Vice President, Supply Chain, correct the commodity codes for those contracts identified as improperly coded during the audit.

We recommend the Vice President, Supply Chain, develop procedures to ensure consulting commodity codes are correctly assigned to contracts in Maximo in accordance with TVA’s definition of a consultant.

We recommend the Vice President, Supply Chain, reinforce the inclusion of the organizational conflict of interest clause and Business Ethics and Compliance Requirements clause in consulting contracts and determine language to be used in the organizational conflict of interest clause.

We recommend the Vice President, Supply Chain, update TVA policies and procedures to clarify how to identify and mitigate organizational conflict of interests.