Semiannual Report

As reflected in this semiannual report to Congress, the OIG continues to better enable TVA to preparefor expected changes in its business environment. TVA’s strategic plan has identified four key areas that areessential to success in a more competitive market: (1) developing new price structures, services, and contractterms that are better suited for a more competitive market; (2) addressing issues that affect TVA’s transmissionbusiness, including how to interface with surrounding markets to ensure reliability and how to charge fortransmission services when distributors can choose other suppliers; (3) accelerating TVA’s debt reduction toprovide increased financial flexibility in a more dynamic, competitive market; and (4) maintaining and operating theTVA power system so customers can count on having a safe and reliable power supply.These four key areas are impacted by the audits, investigations, and inspections conducted by the TVAOIG. We are charged in the Inspector General Act to “provide leadership and coordination and recommendpolicies for activities designed to promote economy, efficiency, and effectiveness . . . and to prevent and detectfraud and abuse.” This semiannual report to Congress demonstrates a concentration of effort by the OIG toidentify areas where TVA can improve efficiency and better protect its operations from fraud and abuse.The nature of the work of the OIG is to naturally focus on aberrations. We focus our efforts based onrisks to the organization and we then look for vulnerabilities. Our semiannual reports to Congress thereforeappear to reflect a compendium of “problems.” What they do not fairly represent are all the many programs andprocesses that are working well at TVA. Neither do our reports fully capture the cooperative spirit of TVAmanagement who year after year implement our recommendations because they truly want TVA to be better. Inthis semiannual reporting period perhaps nothing exemplifies this more than the way in which Jacky Preslar,General Manager of Fossil Fuel Supply, and his team implemented the first fraud risk assessment at TVA. Whilethe OIG introduced this process to TVA, Fossil Fuel Supply embraced it as their own and enthusiasticallyidentified fraud vulnerabilities and provided the necessary remediation.While I am immensely proud of the financial savings realized by TVA this reporting period because of thehard work of our OIG staff, I am equally proud of the healthy professional relationship that exists between ouroffice and TVA management. The TVA Board continues to demonstrate an appreciation for the work of the OIGwhich engenders this spirit of cooperation. I am grateful for the opportunity we all have to work together to builda better TVA.