Chemicals and Water Treatment Services

We audited $18.4 million of payments TVA made to a contractor for chemicals and water treatment services during Fiscal Year 2004 and found 23 percent of the payments were authorized by technical contract managers who did not have adequate controls in place to ensure the products or services had been received. Additionally, we found the prices billed by the contractor were in compliance with the contract except for (1) $6,266 of overbillings, and (2) an estimated $322,579 of payments for products with unsupported prices. TVA management plans to (1) implement more effective controls over receipt, (2) recover the $6,266 overbilling, and (3) obtain appropriate documentation for the unsupported prices or recover billings that lack supporting documentation. Summary Only