TVA Needs To Improve Management of Power Stores Inventories

LCD-80-32: Published: Jan 25, 1980. Publicly Released: Jan 25, 1980.

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GAO identified ways that the Tennessee Valley Authority (TVA) could better manage the material inventories it maintains to support the production and distribution of electrical power.

The material inventories of the TVA have rapidly incresed. Material worth approximately $51 million exceeded the corporation's near-future needs. GAO found that stockage objectives were being determined by plant superintendents rather than being based on past usage. Excess stocks were not systematically identified and redistributed to locations needing the material to avoid new purchases. Inactive items were not regularly reviewed and removed from inventory to reduce carrying costs and the risk of obsolescence. Material was incorrectly classified as standby stock resulting in the retention of larger quantities than needed to satisfy demand. TVA management has recognized the need for strengthening controls over its material and was completing development of a modern automated material management system. However, it had not developed the organizational structure and material management policies necessary for effective operation of the system.

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  • budget icon, source: GAO

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