Federal Reports

The recent restructuring of the Information Services (IS) operations area mirrors leading practices. In addition, IS' methodologies and tools for conducting information technology projects are above those of its peers. However, our review showed some areas needed improvement, such as, TVA needs to (1) better integrate IS governance with TVA business strategy; (2) improve focus on strategic business partnering and communication with customers; (3) target organization and policy changes, performance measures, and service management toward aiding customers to achieve business goals; (4) consolidate procedures to increase usability; and (5) develop a strategy for handling the risk of the aging workforce and ensuring knowledge transfer. Management generally agreed with the recommendations and is taking corrective action.

While IT Security has made strides in establishing the technology infrastructure, we found (1) IT Security lacks a business-level mechanism to provide cross-agency oversight, a strategic TVA-wide approach, and grounding in risk management; (2) coordination and communication with business units were not well defined and could be more effective with increased training, communication, and business unit involvement in security planning; (3) procedures were outdated and did not address issues for all business segments; and (4) performance management was substantially undefined. Management agreed with the recommendations and is taking corrective action. Summary Only

TVA entered into a contract with a vendor to provide a fully integrated prescription drug program that would include both retail and mail order prescription drug services. The contractor was required to (1) maintain a Participating Pharmacy Network to provide retail pharmacy services, (2) provide base administrative services including processing and adjudicating TVA's prescription drug claims in accordance with TVA's plan design, (3) issue checks to participating pharmacies and/or claimants on TVA's behalf, and (4) implement and administer health management programs. We reviewed the costs billed and formulary rebates credited to TVA by the contractor. Specifically, our inspection covered: Claims payments by TVA to the contractor for the period December 22, 2001, through December 30, 2005. Base administrative fee payments made by TVA to the contractor for the period January 5, 2002, through December 5, 2003. (There were no base administrative fee payments for calendar years 2004 and 2005.) Formulary rebates credited to TVA for claims adjudicated and billed from January 1, 2002, through December 31, 2005. We found, in general, the contractor billed costs in accordance with the contract terms and TVA plan provisions with the exception of certain Consumer Directed Health Plan (CDHP) claims. In addition, formulary rebates allocated to TVA exceeded the minimum guaranteed rebate amounts, when applicable, and nothing came to our attention during the limited testing of formulary rebates that would indicate TVA rebates were not determined in accordance with contract terms. TVA management generally agreed with our findings and recommendations and has taken or plans to take corrective action to resolve the issues identified regarding CDHP claims. Summary Only