- This is what an audit looks like.
- This is what investigative reporting looks like.
You've probably never seen much of either here in corrupt St. Johns County, Florida, a place where:
- there's no independent Inspector General, with two billion dollars in local governments, including County Commission, School Board, two cities, and four special taxing districts
- voters in 2016 re-elected evil Republican Sheriff DAVID SHOAR, who covered up the September 2, 2010 Michelle O'Connell homicide, despite investigative reporting in The New York Times, PBS Frontline, et al.
- we elected a boy to do a man's job (Clerk of Courts and Comptroller HUNTER CONRAD is SHOAR's crony, who bailed on briefing Commissioners after SHOAR's office was robbed of $702,733, 2011-2018, by Finance DIRECTOR RAYE BRUTNELL.
While the Knoxville News Sentinel is owned by a chain (GANNETT, with which GateHouse proposes to merge), it has a tradition of actual investigative reporting.
Is the high-profit, low-information GateHouse owned St. Augustine Record often a journalistic whorehouse? It was founded by oil and railroad monopolist Henry Morrison Flagler's frontman, long owned by railroads, then by segregationists and then the right-wing Morris Communications cartel.
Footnote: fond memories of holding TVA accountable at age 24-26 as a weekly newspaper editor in East Tennessee, 1981-1983, and later as a lawyer for ethical whistleblowers, including my first trial, setting a then-record verdict for compensatory damages in a U.S. Department of Energy nuclear whistleblower case. DeFord v. TVA, 90-ERA-60
From Knoxville News-Sentinel:
We overspent because the rules are unclear and we didn't know all of them, TVA CEO says. (Knoxville News Sentinel)
Jim Gaines, Knoxville News Sentinel Published 3:59 p.m. ET Sept. 12, 2019 | Updated 6:25 a.m. ET Sept. 13, 2019
The Tennessee Valley Authority is a federally owned electricity corporation. An act of Congress established the company in 1933 to help the Tennessee Valley overcome environmental and economic problems. Now TVA provides power for the entire state of Tennessee and parts of six bordering states. The corporation also provides flood control, navigation and management for the Tennessee River System. The company has a diverse power plant portfolio that includes nuclear, fossil, diesel, hydroelectric, natural gas, solar and wind energy. The corporation funds its own operations by the sale of its electricity to power distributors.
To Jeff Lyash, president and CEO of the Tennessee Valley Authority, a new audit detailing overspending and poor record-keeping by dozens of TVA executives isn’t evidence of systemic problems or deliberate fraud.
“I don’t believe these things are done with intent to collect more reimbursement than you’re warranted or to spend more money than was justified,” he told Knox News on Tuesday. “I see a lack of rigor in this process and a process that doesn’t make it easy to comply.”
The audit report released Wednesday detailed $1.8 million in travel costs for 67 executives between October 2016 and July 2018. The audit found executives repeatedly violated both federal travel regulations and TVA's own policies.
The problems uncovered by the Office of the Inspector General are evidence the agency’s policies are sometimes “unclear or incomplete,” and they are already being revised, said Lyash, who took over as president and CEO in April. He replaced Bill Johnson, now head of California utility PG&E, who led TVA during the entire audit period.
“We’re going to use this as an opportunity to look more broadly at our executive travel and performance, our business meeting travel and performance, and our hospitality,” Lyash said.
“In summary, the actions by some of the 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 compliance with (federal and TVA) policies and procedures,” auditors wrote.
Recommendation and reaction
Auditors made 14 recommendations for tightened rules, specific requirements, and stronger reporting and record-keeping standards.
“Fundamentally, I’m accepting all 14, and we're going to take the corrective actions necessary to close up all those gaps,” Lyash said.
The findings are similar to those of mid-2018 audits on TVA’s aircraft use, which found the same cadre of executives broke federal rules and their own policies and cited inadequate record-keeping, lax authorization, and perhaps excessive use of luxury aircraft.
The 67 people audited were “vice presidents and above,” including four nuclear plant managers counted as executives, said TVA spokesman Scott Gureck.
Currently TVA has 57 employees of that rank. Since the audit covered a 22-month period, some people came and went in those jobs, he said. Altogether the agency has about 10,000 employees, Lyash said.
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The executives are based at TVA sites all over the Tennessee Valley, but most are concentrated in Knoxville, Chattanooga and Nashville, Gureck said.
Lyash acknowledged that some of the expenses “weren’t proper,” but attributed those lapses to executives unfamiliar with policy.
“In those areas we’re doing training and familiarization so that executives are very clear with what the expectations are,” he said. Record-keeping and the approval process are also being strengthened, Lyash said.
TVA will do further assessments over the next year to make sure its policy changes and training are effective, he said.
During the audit period TVA executives spent $253,018 on dining, according to the report. For about half of the meals at business events, the average cost per person exceeded the daily meal allowance. For 41% of events, when meals were provided, executives did not deduct them from their per diem reimbursement, or daily food and lodging allowance, as they should have.
Federal per diem rates, set by the General Service Administration, vary by state. The lowest average is $55 for meals and $94 for lodging, in North Dakota; the highest is $76 for meals and $215.67 for lodging, in the District of Columbia.
“The hospitality events and business meetings were held at restaurants, with some noted as fine dining restaurants,” auditors wrote. “Eight of the transactions were business meetings held outside of the Tennessee Valley with no external parties in attendance. All TVA executives would have been in travel status receiving (the) per diem.”
In such instances, the executives have been asked to refund the overpayments, Lyash said, but he didn’t have a tally of what’s been requested or repaid thus far.
The most expensive meals included $1,157 spent at a steakhouse in New York City, which included $145 bottles of wine and resulted from TVA splitting the bill with a vendor. TVA also spent $1,157 at a steakhouse in Washington, D.C., and $911 to cover dinner for three employees at a French restaurant in New York City.
Itemized receipts, though required, were provided for only two of the 10 most expensive meals.
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Executives spent $348,498 on ground transportation, including $46,232 on car services. In one case, the report states, a chauffeur drove Johnson and another executive 13 miles from an airport to a meeting, waited there for three hours and drove them back. The cost? $935. They could've rented a car, the report notes.
In another case, an executive, another employee and two TVA police staffers paid $1,039 to a car service to travel a total of 10 miles over 11 hours in Washington, D.C.
"All points visited were near Metro subway stops," the report reads.
TVA responded that the car service was used due to security concerns “in a city that has one of the highest crime rates in the U.S.”
“We felt it would be a safety risk to TVA employees and other drivers to ask our TVA Police Executive Protection team to navigate through a congested city in which they were unfamiliar,” the agency said.
TVA executives also took some international flights in violation of policy. Johnson flew first class five times, spending a total of $31,277 to travel to London, Paris, Stockholm and Tokyo.
"The justification given for the first class accommodations was a medical disability," the report reads. "The written statement we were provided by a medical authority describing the disability and need for first class travel was dated after the five first class flights occurred.
“The former CEO informed us there was an earlier authorization, but it was lost and the medical practitioner that issued it was deceased so he could not get a copy.”
Other executives, unnamed in the report, also took pricey flights. Three executives accompanied Johnson to Stockholm; two of them flew for $917 each, but the third cost far more.
“It was the executive’s personal preference to arrive in Sweden earlier than the other executives, which resulted in an additional cost to TVA of over $9,000,” auditors wrote. He repaid $4,752 when the cost came to light, the report said.
More executives, on trips to Asia for a “TVA Investor Road Show,” spent thousands more than allowable for airfare, according to the report. The agency blamed “lack of awareness” of the rules.
Tennessee Valley Authority CEO Bill Johnson, at the TVA Towers in downtown Knoxville, Tuesday, July 23, 2013.
TVA executives didn’t get advance approval for $54,979 in lodging expenses, as required; but Johnson “provided ‘blanket’ approvals for direct reports and four other executives to go up to 150% of the GSA locality rate without requiring a business justification or individual preapproval,” the report said.
Lyash said he has rescinded those blanket authorizations at least until he can evaluate them himself.
Several of those stays were far above 150% of the local per diem. Many others were within 50 miles of the executives’ home base.
TVA’s response, through its attorney, said those were primarily because the person had worked late, “making it unsafe for the employee to return home in between due to fatigue” or bad weather or “team building events.”
“TVA’s general counsel did not cite specific legal authority to support their position,” the report said. Only one of the 42 instances checked provided documentation of a safety concern, and none mentioned bad weather.
Nor were expensive hotel rooms necessarily even occupied.
“The former CEO (Johnson) booked lodging at 682% of the GSA locality rate in West Virginia and canceled the stay to travel elsewhere, but TVA was still responsible for paying for that lodging,” the report said.
Lyash said the expenses questioned by auditors make up less than 8% of the $1.8 million audited. That amount shouldn’t be dismissed, but the problem is small enough in scale to handle forthrightly, he said.
“There’s no acceptable level of error,” Lyash said. “We should get this right each and every time.”
TVA is a unique case, with federal responsibilities as well as investors worldwide and economic development functions, he said.
“The range of our expenses, the types of our expenses is perhaps broader than most. So the standard we ought to be applying here is, are the costs justified?” Lyash said.
Lyash said he talks to Johnson periodically.
“We had a quick conversation that this audit was going to come out, and I was going to take corrective action,” Lyash said.
Johnson said he’d repay any expenses he was requested to, according to Lyash.
“But we haven’t found anything yet that we’ve asked him to do that for,” he said.