Semiannual Report

March 31, 2003

SEMI34

Semiannual Report

I am pleased to submit this semiannual report on the accomplishments of the OIG for the six-month period ending March 31, 2003.I have been honored to serve as the Acting Inspector General since January 2002. The OIG staff and I now look forward to serving with a recent presidentially nominated Inspector General. As we have always done, the management team and I will assist the Inspector General in providing leadership, coordination, and oversight to pro- mote economy, efficiency, and effectiveness in all TVA programs and operations.Our products for the six-month period are summarized throughout this report. They have been well received and have contributed in many ways toward helping TVA achieve its goals. I also want to point out some of the note- worthy OIG accomplishments during the past 15 months of which I am especially proud.I remain sensitive of the need for TVA to conduct its business in an open and forthright manner that instills confidence in Congress, the Administration, investors, and TVA customers and ratepayers. Working toward this end, I assisted the TVA Board in strengthening corporate accountability, enhancing financial disclosure, and increasing external auditor independence. The OIG agreed to assume technical management of the external financial audit contract in 2003. Previously, this role was performed by the TVA Chief Financial Officer (CFO). Additionally, TVA's Board and CFO will certify the financial statements and related information in TVA's Annual Report, as well as all future financial statements and related information. The Information Statement, which is TVA's disclosure report to the public financial markets, will be similarly certified. The certification process will include signed certifications by all TVA Officers and Business Managers for the information they provide for these reports.At the same time, the OIG consolidated its financial audit resources into one department to assure an adequate number of Certified Public Accountant-certified auditors were available to conduct the annual audit of the work of TVA’s external auditor (PricewaterhouseCoopers [PWC]). While assuring that PWC’s financial audit work complies with government auditing standards, We will continue to assist TVA in upgrading its computer security infrastructure. Working with TVA's Information Services organization and an outside consultant, we agreed to establish the Information Technology Security Assessment Team. To date, the team has identified critical risk and the current status of information technology security for critical TVA computer systems and the steps necessary to protect the systems from cyber-attack.The Homeland Security Act of 2002 provided law enforcement authority for TVA OIG special agents under guidelines to be issued by the Department of Justice. Our special agents received comprehensive federal law enforcement skills training at the beginning of their careers. However, in preparation for this new status, we have undertaken an aggressive law enforcement skills refresher training pro- gram. The training included topics such as the rules of search and seizure, federal rules of criminal procedure, arrest authority and techniques, defensive tactics, firearms training, and the use of non- lethal weapons. I believe this training will ensure that our special agents exercise this authority responsibly and professionally.Finally, I have worked to develop a solid framework for excellence and future improvement in OIG operations. The management team and I created momentum to implement our strategic plan. We focused on three key areas: (1) maintaining our integrity as an independent watchdog; (2) strengthening working relationships with our stakeholders; and (3) leveraging OIG resources to optimize productivity and results.I am pleased with the support I have received from OIG employees, the TVA Board, Congress, and other stakeholders. I look forward to further serving these constituencies.Sincerely, G. Donald Hickman

Yes

Yes (agency-wide)

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