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TVA’s Invoice Review and Approval Process

Report Information

Date Issued
Report Number
2022-17369
Report Type
Audit
Description
We performed an audit of the Tennessee Valley Authority’s (TVA) invoice review and 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. The scope of our audit included Supply Chain nonreceiving contracts and POs with fiscal year 2021 invoiced costs totaling $3,554,951,594. In summary, we determined:• Policies and procedures were not being followed to ensure effective review and approval of supplier invoices. Our review of 127 invoices found inadequate reviews were performed on 55 invoices (43 percent). Based on our review of sampled invoices and relevant contractual documentation, as well as interviews with field invoice approvers, contracting officers (COs), and contract technical stewards, we identified several potential underlying causes for why effective invoice reviews were not performed. • TVA could clarify policies and procedures to better define roles and responsibilities related to (1) field invoice approver (FIA) approval of invoices related to POs with compensation terms different from the blanket contract and (2) required communications when there are changes in FIA assignments. In addition, we noted several opportunities to improve contract administration. Specifically, we identified opportunities related to (1) documentation inconsistencies between contracts and information in TVA’s EAM system, (2) the issuance of amendments for contract modifications, (3) work performed after the contract’s termination date, and (4) contract clauses containing inconsistent guidance.
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 TVA management implement procedures to (1) assess the clarity, conciseness, and completeness of compensation terms and (2) ensure contract terms establish an invoice format that includes sufficient detail.

We recommend TVA management revise policies to clarify the contracting officer’s and contract technical steward’s responsibility to (1) monitor the invoice approval process and (2) engage in clear and frequent communication with the field invoice approver.

We recommend TVA management establish an automatic reporting mechanism to communicate (1) contract modifications to the field invoice approver and (2) changes in field invoice approver assignments for existing purchase orders to contracting officers.

We recommend TVA management require and establish a frequency for online refresher training.

We recommend TVA management assess the adequacy of the online field invoice approver training related to the field invoice approver’s responsibilities for reviewing all commercial terms, communicating with the contracting officer to understand the contract’s pricing structure, and utilizing the invoice review checklist as a reference during the invoice review process.