The Tennessee Valley Authority (TVA) Standard Programs and Processes 04.050, Investment Recovery, defines surplus material as material or equipment considered excess at a site that cannot be sold back to the original supplier or manufacturer. Before items are considered surplus, TVA personnel are responsible for determining if the materials have a forecasted usage at the site or within the TVA fleet within 3 years. From October 1, 2020, through March 31, 2025, TVA transferred approximately 370,000 inventory items to surplus with a book value of $34.7 million. TVA’s Investment Recovery group is responsible for managing surplus inventory in a manner that recovers as much of TVA’s original capital investment as possible.
Due to the significant investment TVA makes in inventory, we conducted an audit of TVA’s surplus inventory. Our objective was to determine if TVA surplus inventory was managed in accordance with TVA policies and procedures. The scope of this audit was inventory items transferred to surplus from October 1, 2020, through March 31, 2025.
We determined, in general, TVA managed its surplus inventory in accordance with policies and procedures; however, we identified two opportunities for improvement. We found TVA policies and procedures could be improved by clearly defining how to determine forecasted usage across TVA. We also noted opportunities to improve the management of surplus inventory related to documentation completion.
