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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 revise policies to emphasize the importance of contracting officer’s responsibility to ensure a purchase order’s compensation terms are provided for in the blanket contract.

We recommend TVA management revise policies to provide guidance on the FIA’s responsibilities for approving invoices when the purchase order’s compensation terms are not provided for in the associated blanket contract.

We recommend TVA management revise TVA-SPP-04.004 to include requirements for communicating changes in field invoice approver assignments that is consistent with the language in TVA-SPP-04.002.

We recommend TVA management implement procedures to (1) confirm information in TVA’s Enterprise Asset Management system are consistent with contract documentation and (2) ensure contract modifications to change the contract term or monetary limit are made through a formal, written amendment, when required by the contract.

We recommend TVA management establish policies to prevent instances of work being performed under a purchase order subsequent to the contract’s termination date.