Review of TVA's Ethics and Compliance Program

We evaluated the design, implementation, and effectiveness of TVA's Ethics and Compliance Program and found:TVA's current ethics program was limited to the Office of Government Ethics' standards and requirements. The Designated Agency Ethics Officer (DAEO), currently within the General Counsel's office, is responsible for making sure the appropriate employees are trained in these standards. Currently, about 20 percent of TVA employees are required to participate in annual ethics training. The audit team found that leading practice provides ethics training to all employees and addresses how ethical behavior affects and supports a company's overall mission. It has been shown that such training provides an ethical foundation for employees which, in turn, provides the basis for a company's compliance program.TVA's compliance program is comprised of "silos." Each business unit, such as TVA's nuclear and fossil power organizations, has experts in nuclear and environmental regulations who assist individual nuclear and fossil plants in complying with specific regulations. However, leading practice trends toward a more centralized corporate compliance management approach. This centralized approach provides for coordination of each business unit's compliance program and allows for better communication of issues across the organizations. Based on these findings, we recommended to the Chief Executive Officer (CEO) that TVA establish a Chief Ethics and Compliance Officer (CECO) position and move the responsibility for TVA's Ethics Program from the General Counsels' office to the CECO, who would be responsible for directing the ethics program and coordinating compliance programs across TVA. We recommended the CECO report to TVA's CEO and Board of Directors. The CEO agreed with our recommendation to establish and fill the CECO position at TVA and indicated implementation details would be addressed after the appointment.