Punctuating a series of embarrassing disclosures on now-banned entertainment spending, an internal audit found the Tennessee Valley Authority spent about $6.5 million on hospitality expenses in fiscal 2003.
About $3.1 million of that was spent on special events, such as a New York meeting with financial analysts and a Nashville conference with TVA's Investment Challenge program for university students, said the report from TVA's inspector general.
More than $1 million was spent on "employee recognition," including holiday meals and gift cards. About $782,000 was spent on business meetings.
In addition, $1.4 million was spent on miscellaneous expenses such as catering and sporting events.
Specifically, the TVA, a federal corporation and the nation's largest public utility, spent $42,825 at flower shops, $62,360 on gifts, $39,331 on golf and club charges, $476,513 on restaurant and catering costs, $75,557 at retail and discount stores and $101,513 on sporting and entertainment tickets.
"That kind of expense seems ridiculously excessive to me," said Rep. John J. Duncan Jr. (R-Tenn.), who represents TVA's headquarters city of Knoxville.
The TVA Board of Directors voted in August to severely curtail such expenditures in the future after a series of media reports about wining and dining distributors and TVA employees.
"We periodically look at spending in this general area. As a result of some earlier publicity TVA received about hospitality spending, we initiated a more comprehensive review than we have in the past," Inspector General Richard W. Moore said.
The 20-page audit supports the August reforms and makes additional recommendations on expense reporting and monitoring that were accepted by TVA management. The inspector general found no violation of the agency's prior hospitality policy, which it described as providing employees with "wide discretion" in spending practices.
"However, TVA's practice of allowing TVA employees to engage in hospitality spending without more specific guidance increased the risk of harm to TVA's reputation," the report said.
The audit did not compare TVA's hospitality expenses with any prior years. A 1997 audit by the inspector general, requested by Rep. Zach Wamp (R-Tenn.), found TVA spent about $4 million in the previous three fiscal years on special events and receptions on TVA barges.
TVA provides electricity to about 8.5 million people through 158 distributors in Tennessee and parts of Kentucky, Virginia, North Carolina, Mississippi, Georgia and Alabama.