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Purchasing Card Usage

Report Information

Date Issued
Report Number
2020-15694
Report Type
Audit
Description
We audited the Tennessee Valley Authority's (TVA) purchasing card (P-Card) usage to determine if personnel complied with TVA's P-Card policies and procedures. Our audit scope included approximately $79.8 million in transactions occurring from October 1, 2017, through September 30, 2019. Our audit found multiple instances where TVA personnel did not comply with requirements in TVA's P-Card policies and procedures. Specifically, we found (1) some approving officials were not performing their review duties properly, (2) split transactions occurred, (3) disallowed and questionable (nonbusiness expense) transactions occurred, (4) only 25 percent of TVA's cardholders and approving officials completed the required annual P-Card training at least once, (5) periodic audits of P-Card transactions by Supply Chain were not performed, and (6) certain potentially fraudulent transactions by one cardholder had not been identified due to inadequate reviews of the cardholder statements. OIG Investigations subsequently found evidence the cardholder had used the P-Card to make several monthly rental payments to the apartment complex where the cardholder lived. In addition to those areas of noncompliance listed above, we found P-Cards were being used without determining if sources the Supply Chain and Financial Services Standard Programs and Processes rank ahead of the P Card in its hierarchy were available. We made 12 recommendations to TVA management to strengthen controls and help improve compliance with the P-Card policies by (1) implementing additional procedures and monitoring activities and (2) clarifying and updating the policies and related training. TVA management provided actions they plan to take to address each of our recommendations.
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's VP and Controller, Financial Services, update annual training with the new instructions due to any changes made to SPP requirements.

We recommend TVA's VP and Controller, Financial Services, perform regular reviews of reports from ICCS listing statements for approving officials that are (a) not approved and (b) approved after the statement due date and take appropriate actions when the approving official does not perform their responsibilities.

We recommend TVA's VP, Supply Chain, perform the monitoring functions on P-Card transactions as required in the Supply Chain SPP to help ensure (a) P-Card purchases are valid business expenses and only materials and services Supply Chain has determined are allowed have been purchased and (b) purchases do not exceed the P-Card contract ceilings.

We recommend TVA's VP and Controller, Financial Services, implement a periodic review for (a) split transactions and (b) disallowed and/or questionable transactions and enforce the Financial Services' SPP by having cardholders reimburse TVA and/or suspending or revoking the card as applicable.

We recommend TVA's VP, Supply Chain, coordinate with the VP and Controller, Financial Services, and update TVA-SPP-04.0, Management of the TVA Supply Chain Process, with specific purchasing source hierarchy and update the SPPs to correctly list the hierarchy of sources as determined by Supply Chain.