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TVA Reminds Staff to Use Company Cards Wisely

By Ed O'Keefe

Following an investigation that revealed fraudulent purchases of items including X-Boxes, TiVos and alcohol, the Tennessee Valley Authority sent an email to employees this week reminding them to avoid such purchases on credit cards issued by the government-backed corporation.

"We have taken actions to strengthen our internal controls, but these actions are not a substitute for the personal accountability and good judgment required of our cardholders and those who oversee their actions," TVA Procurement Vice President Terrell Burkhart says in the email (full message after the jump).

The investigation by TVA's inspector general 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 and $2,500 for jewelery -- which were the result of identity theft or physical theft of cards, according to Burkhart.

"The purchasing-card program accounts for about 3 percent of our $2.6 billion in annual material purchases," he notes. "We must protect them from theft and keep them as secure as our personal credit cards." TVA's online purchasing-card training program has been updated and the corporation has blocked more than more than 250 electronic merchant codes to prevent prohibited purchases prohibited by the program.

"The purchasing-card program is a vital tool for helping expedite work and in reducing administrative costs on many levels," Burkhart says. "It is up to us to protect its integrity by strictly following procedures and using good judgment at all times."

TVA established its purchasing card program in 1995 for business-related expenses not exceeding $5,000. Business service general managers approve and issue the cards to employees and any purchases exceeding the limit must be approved by superiors on a case-by-case basis. Total annual purchases on the cards have fluctuated between $23 million and $87 million over the life of the program, according to the report.

Reminder About Proper Use of TVA Purchasing Cards Procurement Vice President Terrell Burkhart reminds employees that all purchasing-card procedures must be strictly followed, and that any question about the appropriateness of a purchase should be addressed to the purchasing-card program manager before the purchase is made.

Burkhart says the recent audit of the program by the TVA Inspector General at the request of President & Chief Executive Officer Tom Kilgore identified areas where procedures were not being followed and the need for additional controls to improve routine program oversight.

Last week, Kilgore notified employees that TVA has a “zero-tolerance” policy for failure to follow the program’s guidelines. (See the March 3 TVA Today Update.)

While the audit did not identify any fraudulent transactions by TVA cardholders, it showed that some cardholders made improper judgments about allowable purchases, and that some reviewers did not require adequate supporting documentation.

“We have taken actions to strengthen our internal controls, but these actions are not a substitute for the personal accountability and good judgment required of our cardholders and those who oversee their actions,” Burkhart says.

He said that all of the $50,000 in fraudulent charges cited in the audit resulted from either identity theft or the physical theft of a card. None of those charges were by TVA employees. The charges were discovered and the funds were recovered through appropriate channels.

“The purchasing-card program accounts for about 3 percent of our $2.6 billion in annual material purchases,” says Burkhart. “We must protect them from theft and keep them as secure as our personal credit cards.”

He says that Procurement has updated the online purchasing-card training that is required annually for all cardholders and approving officials. In addition, more than 250 electronic merchant codes have been blocked to prevent the purchase of supplies not allowed under the program.

“The purchasing-card program is a vital tool for helping expedite work and in reducing administrative costs on many levels,” Burkhart says. “It is up to us to protect its integrity by strictly following procedures and using good judgment at all times.”

By Ed O'Keefe  | March 13, 2009; 4:03 PM ET
Categories:  Workplace Issues  
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