Date Issued
Report Number
2024-17485
Report Type
Inspection / Evaluation
Description
The Tennessee Valley Authority’s (TVA) 5-year Enterprise Technology Plan seeks to transform the way TVA does business through technology and digital innovation. Digital Finance is one of seven efforts within this multi-year initiative, aimed at modernizing and streamlining TVA’s financial systems and processes. Modernization of the general ledger (GL) is the first step within Digital Finance. The objectives of the GL Modernization project include implementing an enterprise financial management system with minimal customization, redefining and modernizing TVA’s chart of accounts, and modernizing and optimizing boundary systems (applications, systems, or platforms outside of the GL that interface with the GL). Since its approval, the project has experienced cost increases and schedule delays. Approved funding increased from $67.1 million to $104.7 million in November 2023. Although originally estimated to be completed by June 2025, the in-service date was moved up to January 2025. In December 2024, the GL project was approved for $169 million in funding with an in-service date of November 2025. Due to the impact of the project across TVA business units, we scheduled an evaluation of the GL Modernization project. The objective of this evaluation was to determine the causes for cost increases and schedule impacts on the GL Modernization project. We identified three primary causes of cost increases and schedule impacts on the GL Modernization project, including (1) inadequate identification of project requirements, (2) an incomplete project schedule, and (3) instances of ineffective contractor management. Specifically, detailed requirements were not identified early in the project. Instead, detailed requirements are being identified as the project progresses. Also, input from key stakeholders was not adequate as the project began. As a result, the GL project team did not understand the complexities and interdependencies of boundary systems and internal reporting needs were not included in the initial project scope. In addition, the GL project schedule was incomplete and did not include all the project’s activities and associated resource needs, such as those related to boundary systems and internal reporting. Finally, TVA did not provide effective management of some contractors involved in the project, resulting in missed opportunities to address system integrator performance issues. In addition, TVA contracted for services that may not have provided value to the project. For example, TVA paid a contractor to negotiate savings with the system integrator but project cost increases make it difficult to determine if the savings were legitimate.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0