Effectiveness of TVA's Budget Processes

November 15, 2011

2010-13295

Audit

We reviewed the effectiveness of TVA's budget process. Our objective was to review the adequacy of the processes used in preparing, reviewing, and adopting the fiscal year 2011 budget. In general, we determined the overall design of the budget process was sufficient to achieve the desired results. We found nothing to indicate the benchmarking process was not sufficient to allow TVA to benchmark itself against its peers. We also found nothing to indicate the budget review and approval process was insufficient. However, we did identify opportunities where the process could be strengthened and improved. Specifically, we determined:A formal written procedure directing the budget process did not exist.Operating and maintenance (O&M) targets were set using historical data rather than tied to fundamental business drivers.A control to ensure each submitted business plan aligns resources with strategic goals was not operating as intended.The budget process addressed risk management initiatives at the organization level; however, entity-wide risk management was not directly addressed.The process for prioritizing capital and O&M projects among organizations could be improved.The budget process relied heavily on compiling data from multiple spreadsheets which was manually intensive, time consuming, and error-proned. Summary Only

Yes

Yes (agency-wide)

$0

$0