Report Details Fraud and Abuse at TVA
A two-year review by the inspector general's office at the Tennessee Valley Authority finds that staffers made millions of dollars of questionable purchases on credit cards provided by the government-backed corporation.
Staffers spent more than $360,000 over two years on electronic items including X-Boxes and TiVos for an employee awards program and made questionable purchases of alcohol, beer and wine for training sessions and other meetings, despite TVA's policy against consumption during such events. Others purchased software to "erase evidence of Internet usage," according to the report.
TVA was established by Congress in 1933 to address infrastructural and economic needs across seven southern states. The executive agency is entirely self-financing and receives no funding from Congress. Revenues come from the sale of electricity and bonds.
The authority established its purchasing card program in 1995 for business-related expenses not exceeding $5,000. TVA's business service general manager approves and issues the cards to employees and any purchases exceeding the limit must be approved by superiors on a case-by-case basis. Employees can use them to buy materials, supplies, equipment, books or periodicals, or pay for memberships with professional organizations. Contrary to the pattern of misuse, the cards are not approved for expenses related to travel, vehicle leasing, heavy equipment rental or to buy computer hardware or software. Total annual purchases on the cards have fluctuated between $23 million and $87 million over the life of the program, according to the report.
The inspector general's office regularly reviews the program and the most recent investigation looked at transactions between Oct. 2005 and Dec. 2007. While TVA staff and management identified and reported some cases of waste, fraud and abuse, many went unreported. Investigators also discovered that some employees sought refunds or made balance transfers from TVA-issued cards because of fraudulent transactions, including $20,000 for United Airlines tickets, $2,500 paid to WeddingBands.com, and hundreds of dollars in fraudulent engineering and electrical costs. A former TVA vendor is serving a three-year prison term for fraudulently using a TVA card for nearly a month.
The latest inspector general report comes as TVA faces more than $800 million in costs to clean up a late December ash spill at its Kingston, Tenn. plant. Observers have also raised questions about last month's election of former Republican National Committee chairman Mike Duncan to serve as the next chairman of the TVA board of directors. The Tennessee native and former TVA board member has pledged to serve in a nonpartisan manner.
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