TVA Execs Spent $1.8M on Travel Over 22 Months
Damning OIG audit highlights TVA's excessive travel from 2016 to 2018
|Cari Wade Gervin||Sep 11, 2019|| 1|
$1,157 at a pricey steakhouse, with $145 bottles of wine. $935 for three hours in a chauffeured car service to drive 13 miles to and from an airport. $31,277 in first class flights to Europe and Japan. From the beginning of October 2016 until the end of July in 2018, the Tennessee Valley Authority spent almost $1.8 million on travel costs for its 67 executives — and not all of those expenses were reported to the board of directors.
A new audit from TVA’s Office of the Inspector General, released today, paints a damning portrait of executive privilege not in compliance with either federal travel regulations or TVA’s own policies. This comes after criticism last year over costs associated with TVA’s own aircraft use; those costs are not included in this audit.
The audit states there were $253,018 in dining costs during the time period. But at 41 percent of events to which executives traveled, they did not reduce their per diem reimbursement despite getting meals provided at the event. This double-dipping is a violation of TVA’s travel policy.
In addition, half of the meals at business events exceeded the allowable per diem. These meals were at high-end restaurants, too — a $1,157 meal at Del Frisco’s Steakhouse in Washington, D.C. and another $1,134 meal at Del Frisco’s in New York (which included four bottles of wine at $130 to $145); a $984 meal at Michelin-starred Gary Danko in San Francisco; a $911 meal at the exclusive Daniel in New York; three meals at D.C. powerbroker favorite Fiola Mare costing $1,023, $834 and $470; two meals at D.C.’s Ristorante Tosca at $848 and $699; and a $963 meal at Fig & Olive in D.C. (That last one is utterly baffling.)
Only two of those meals — the ones at Del Frisco’s — had itemized receipts uploaded in TVA’s expense system, another violation of policy. In total, there were $15,956 in hospitality expenses that executives charged to TVA’s corporate credit card for which no itemized receipt was provided. All expenses over $75 are supposed to be accounted for with an itemized receipt. According to the audit, an unnamed executive had the majority of the unitemized receipts and said he was unaware of the policy.
During the same period, executives spent $348,498 on ground travel, $46,232 of which was paid to “car services,” another policy violation. In June 2017, TVA officials were picked up by a car service from the Peachtree Dekalb Airport in Atlanta and driven 13 miles to a meeting. The car service waited for three hours and then returned them to the airport — at a cost of $935. On a D.C. trip that same month, a car service drove four TVA employees 10 miles around D.C. over the course of one day at a cost of $1,039. The audit questioned why the executive did not take the Metro subway system; TVA’s response was, “Safety was our first consideration, especially in a city that has one of the highest crime rates in the U.S.” However, during the same time period, other TVA executives regularly visited D.C. and took the Metro, cabs or Uber or Lyft, averaging $34 a trip. The executives also racked up $33,034 in car service costs in New York, including one 16.5 hour rental that cost $2,040.
The audit heavily implies much of the car services costs were incurred by former CEO Bill Johnson. He is also faulted for improperly flying first class on five foreign trips to Tokyo, Stockholm, Paris and London at a cost of $31,277, stating he needed the upgraded accommodations because of a “medical disability.” However, he did not receive prior approval for the additional expense. (Johnson’s salary at TVA was over $6 million annually, and he came to TVA in 2010 on the heels of a $44 million golden parachute from Duke Energy.) Two other executives also improperly billed TVA for foreign business class flights at a cost of $33,376, although one employee has reimbursed the agency $6,907 for certain legs of the flights. TVA says the executives were unaware of the travel policies.
The audit also dings Johnson for giving “blanket approval” to his direct underlings and four other executives to book more expensive lodging without any justification. As a federal agency, TVA abides by the U.S. General Service Administration’s average hotel rates for per diems, which vary per city. There were $54,979 in hotel costs over the GSA average rate, including a West Virginia hotel booked by Johnson at a cost of 682 percent over the average — a hotel stay that Johnson then canceled but TVA still had to pay for. (My guess is the Greenbrier, but maybe there’s another luxury resort in West Virginia?)
There were also 42 instances of TVA executives or their security staff staying in hotels within 50 miles of their office, another policy violation. TVA replied to the audit saying that sometimes nearby hotel stays were needed because an executive might have to work late and return early the next day, “making it unsafe for the employee to return home in between due to fatigue,” or due to bad weather, or because they were participating in “team building exercises.” But the audit says no documentation exists to verify that except in one instance.
Finally, the audit points out that thousands of dollars in corporate card charges were never reported to the board, as required, including the car service charges and foreign travel — which also was not booked through TVA’s official travel agency.
TVA vice president and controller Diana Ware responded to the audit in a letter saying:
There are opportunities for improvement in the following areas:
Documentation and approval surrounding travel expenditures
Clarification of policies and expected procedures
Training around the specific expectations regarding the policies and procedures
In addition, TVA is performing an extensive review of all travel, hospitality, business meetings, and employee recognition to identify if there are any additional issues. Further, we will add an audit function to insure compliance with these policies and procedures. We will also be pursuing a new expense reimbursement system to provide better reporting and controls.
Scott Gureck, the head of TVA’s public relations, said that in the majority of cases, TVA agrees with the audit’s recommendations and will take steps to implement them.
“In no case does the report say anyone is misusing resources,” Gureck said.
In a statement, the new CEO Jeff Lyash said, “The TVA Inspector General’s audit shows that we need to be more rigorous and disciplined in our record keeping so we can demonstrate that we are operating to the highest standards. Where policies are not clear, we are clarifying them. And where they are clear, we should and will do a better job of following them.”
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