TVA OIG points up many management weaknesses
March 19, 2009
Not quite six months into TVA’s FY 2009, their Office of the Inspector General (OIG) has ponderously but not timely revealed many more reasons the TVA is ill-managed. The preponderance of their reports and other evidence strongly suggest that it is past time the TVA should be dissolved.
Medical Benefit Plan Administrator
The latest has to do with TVA’s administration of their own special health care program. For instance, (OIG) “found TVA had potentially been overbilled up to an estimated $473,024” in a report that covered two years starting January 1, 2006. Management of a tight ship would never condone such loose accounting.
And … “In addition, (OIG) found TVA had been billed an additional $1 million due to payment provisions the contractor had negotiated with some of the providers in its preferred provider organization network.”
Clearly, either management of a health care program is beyond their scope of capabilities or it is just plain bad management. Either case is unacceptable. Seems that when it is OPM (other people’s money) there is not as much care where it goes.
Recommendation: The federal government should be running TVA’s health plan.
TVA’s OIG provided only a summary of their findings; too bad they are not as transparent as Bishop Graves said he wanted the TVA to be.
Review of TVA's Vendor Debarment and Suspension Process
The process and rules for checking out whether potential TVA vendors are on the up and up are straightforward and understandable. Yet, the OIG found much looseness in TVA’s procedures.
· TVA does not have formal procedures for ensuring TVA does not knowingly contract with vendors that have been debarred or suspended by the federal government.
· The Federal Acquisition Regulations (FAR) include certain requirements that if implemented by TVA could improve TVA's process and further ensure that TVA does not do business with contractors and subcontractors that are debarred or have committed a civil or criminal offense.
· TVA does not have a formal process for internally identifying vendors that have been found unsatisfactory within TVA. The lack of such a process could result in TVA not being aware of problems it has had with vendors prior to awarding contracts to them.
Incredibly, TVA has not been following prescribed guidelines to be assured they are not doing business with potential crooks and thieves. The government has had such procedures in place for a very long time.
This leaves TVA’s vendor control in high suspect that some illegal activities have been or already are taking place in dealings with the TVA. A much broader investigation of these processes would seem long overdue. The OIG does not indicate what action, if any, TVA is taking to correct this possibly criminal activity.
Review of TVA's Purchasing Card Program
Let’s face it, the TVA has so mismanaged its fiscal responsibilities including its inability to consistently fill out correct statements to the Securities and Exchange Commission that a complete overhaul or better, elimination, of the TVA must seriously be considered.
TVA management and staff simply ignore policies they disagree with and this has devolved into a “TVA culture” that is not only destructive but in some cases reflects an attitude of criminal wrongdoing.
TVA’s gross misuse of their VISA credit cards is but a recent example of management ignorance or deliberate misuse of federal credit cards. Intended as a management tool to promote efficiency and savings, just the opposite has resulted. In $75 millions of credit card use, a greatly increased amount, much of it was used fraudulently for personal items.
The 1600 or so of these VISA cards now in use must all be re-called and if there is to be a re-issue, only on a limited basis with tighter management controls on the already in place procedures.
Here’s what the TVA OIG determined:
· Key internal controls were not functioning as intended with regard to (1) the review of purchasing card transactions and their supporting documentation and (2) transaction limits.
· Certain purchases were made that were disallowed by TVA policy or questionable in nature.
· TVA's purchasing card program incorporates some best practices, but key best practices were absent.
· TVA employees were not reporting all instances of known or suspected waste, fraud, and abuse or violation of law to the OIG as required by Business Practice 2.
Misappropriating money is a crime subject to possible fines and imprisonment especially when converted to private use. The looseness of management oversight could result in major inditements of some TVA employees and other participants; investigation of apparent illegal acts by TVA employees and others require more than presently reported by the OIG.
Nine other OIG reports have been submitted since the beginning of FY 2009 on October 1. Taken together with the above, a pattern of TVA mismanagement emerges. TVA is sorely lacking in management skills in many areas and shows no propensity to change the “TVA culture”.
Ernest Norsworthy
emnorsworthy@earthlink.net
http://norsworthyopinion.com