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Audit: Federal utility execs overspent on travel expenses

September 11, 2019
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FILE - In this Tuesday, April 18, 2017, file photo, then-Tennessee Valley Authority CEO Bill Johnson answers questions during an interview with The Associated Press in Nashville, Tenn. An audit has found instances where executives for the nation's largest public utility overspent on travel. (AP Photo/Mark Humphrey, File)
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FILE - In this Tuesday, April 18, 2017, file photo, then-Tennessee Valley Authority CEO Bill Johnson answers questions during an interview with The Associated Press in Nashville, Tenn. An audit has found instances where executives for the nation's largest public utility overspent on travel. (AP Photo/Mark Humphrey, File)

NASHVILLE, Tenn. (AP) — An audit has found instances in which executives for the nation’s largest public utility overspent on travel.

The inspector general’s report Wednesday audited about $1.8 million worth of Tennessee Valley Authority executive travel expenses from October 2016 through July 2018.

The report cites instances in which executives didn’t comply with federal travel regulation and TVA policies, including overpaid per diems; excessive meal costs while traveling; use of car services instead of less expensive options; foreign travel problems; lodging issues; and travel costs unreported to the utility’s board.

“The actions by some TVA executives indicate a “Tone at the Top” that could send a message to TVA employees that management is not committed to the TVA Code of Conduct” and complying with existing policies and procedures, the audit states.

TVA President and CEO Jeff Lyash, who started in April, said the utility is clarifying its policies and will follow them better. Lyash said that the expenses questioned make up less than 8% of the $1.8 million audited.

The utility also contends the report does not say anyone is misusing resources.

“I think it’s an area where we can improve the policies, the training, the record keeping and the execution,” Lyash told The Associated Press. “I’m all in on that. But the scale of this problem, in broad context, is relatively small and easily addressed.”

In 25 of 51 hospitality events and business meetings involving executive travel, the average cost per person was higher than what is allotted for a full day per diem in those cities, the audit says.

One business meeting occurred at a Washington, D.C., restaurant in 2016 at a cost of $1,157, or $231 per person, compared to the per diem rate of $69 per person. Meanwhile, a hospitality event at a five-diamond-rated restaurant in New York in 2018 cost $911, or $304 per person, compared with the $74 per person per diem rate, the audit says.

The audit noted the use of a car service in June 2017 by former TVA CEO Bill Johnson and another executive. The two were driven 13 miles (21 kilometers) from a local Atlanta airport to a meeting, where the chauffer waited three hours and then drove the executives back to the airport at a cost of $935, the audit says. It shows that a car service was used in New York and Washington, where the former CEO said he relied on that form of transportation for safety and security but added that should only apply to the CEO and senior officers.

The former CEO also took five first-class international flights totaling $31,277, though he cited a medical disability as justification, the audit states.

Johnson’s expenses are being looked at in TVA’s review of its executive spending, and if it is determined that he misspent funds, he’ll be asked to reimburse them, Lyash said. Some other employees already have been asked to reimburse expenses, he said.

Additionally, the audit raised concerns about 42 lodging stays totaling $6,867 within 50 miles (80 kilometers) of where the officials worked.

The TVA is a federal utility that serves nearly 10 million people in parts of seven Southeastern states and receives no taxpayer funding, deriving virtually all of its revenue from electricity sales.

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