Date Issued
Report Number
2008-11874
Report Type
Audit
Description
We reviewed the contractor's processes and key controls for tracking and accounting for costs used in invoicing TVA for its work. Based on the review, we believe the contractor's system increases the risk of improper billing. Specifically, the system used for TVA billings (1) has limited design documentation and prescribed controls; (2) requires significant manual data entry; (3) increases the hours spent to prepare project invoices; and (4) results in numerous adjustments which, according to TVA management, have totaled more than $1 million. These adjustments include additional charges and credits to reflect actual expenses.To address the issues, we recommended the Vice President, Watts Bar Nuclear Plant Unit 2, in conjunction with the contractor project director, either (1) further assess the feasibility of amending the billing terms to allow the use of the contractor's standard systems, (2) consider an alternative billing system, or (3) require improvements to the current system and processes to address the (a) systemic issues resulting in billing adjustments, (b) lack of key control activities, and (c) other reconciliation/documentation issues. In addition, we recommended all aspects of the billing process and key control activities be documented and tested. TVA management generally agreed with our findings and recommendations and has taken or plans to take corrective action.
Joint Report
Yes
Participating OIG
Tennessee Valley Authority OIG
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0