Federal Reports

The OIG performed six agreed-upon procedures requested solely to assist management in determining the validity of the Winning Performance payout awards for the year ended September 30, 2014. Following are the results of the procedures applied.The fiscal year (FY) 2014 Winning Performance goals for the enterprise-wide and Strategic Business Unit measures were properly approved. One change form for FY 2014 was approved by the Chief Executive Officer on September 22, 2014. The change form affected three scorecards and resulted in no change to payout.The FY 2014 goals (i.e., target) for the corporate multiplier measures were properly approved.The actual year-to-date results for the Strategic Business Unit scorecard measures agreed with the respective supporting documentation, without exception.The actual year-to-date results for the enterprise-wide scorecard measures agreed with the underlying support, without exception.The actual year-to-date results for the corporate multiplier measures agreed with the underlying support, without exception.The FY 2014 Winning Performance payout percentages provided by the Benchmarking and Performance Analysis organization on October 20, 2014, were mathematically accurate and agreed with the Office of Inspector General's recalculations.

Through our audits, inspections, investigations, and other reviews, we continue to identify areas of concern within the Department’s programs and operations and recommend actions the Department should take to address these weaknesses. The Reports Consolidation Act of 2000 requires the OIG to identify and report annually on the most serious management challenges the Department faces. The Government Performance and Results Modernization Act of 2010 requires the Department to include in its agency performance plan information on its planned actions, including performance goals, indicators, and milestones, to address these challenges. Last year we presented five management challenges: improper payments, information technology security, oversight and monitoring, data quality and reporting, and information technology system development and implementation. Although the Department made some progress in addressing these areas, each remains as a management challenge for fiscal year 2015.

The Tennessee Valley Authority (TVA) engaged in three major initiatives during fiscal year (FY) 2009 through FY 2013 related to workforce productivity and operational performance: DeWolff, Boberg & Associates, Inc.'s (DBA) workforce performance, McKinsey and Company's Pilot and Performance Boost, and TVA's Diet and Exercise (D&E). Our audit objective was to assess the effectiveness of TVA's management of those productivity and operational performance improvement initiatives. Based on our assessment of the effectiveness of TVA's management of the DBA, McKinsey Pilot and Boost, and D&E initiatives, we determined TVA management did not effectively monitor achievement of all performance improvements. Specifically, we identified a deficiency in the control design related to monitoring and tracking for verification of savings claimed from the DBA and the McKinsey initiatives. In addition, the sustainability of the performance improvement initiatives was hindered by a lack of employee engagement and resource constraints that made operational efficiency improvements unachievable or unrealistic. Further, employee morale suffered during the DBA initiative due to employees' perceptions of disrespectful behavior towards them by DBA. Morale also suffered during the McKinsey initiative from a perceived lack of follow-through by TVA management to provide funding to implement improvements. Based on the above, we recommended TVA (1) assess the cultural climate through meaningful dialogue with employees about the impacts of the initiatives to determine the long-term effects on employee engagement and morale and (2) establish a standard process and procedure for future improvement programs. TVA management reviewed a draft of the report and agreed the contents were factually correct. TVA management is working on a plan to address our recommendations. Summary Only