Detailed Information on the
Tennessee Valley Authority Resource Stewardship Assessment

TVA will develop a detailed business plan that provides specific information on how it intends to achieve the goals espoused in TVA's new strategic plan, which was released in May 2007.

The Administration is encouraging TVA's Board, management, and staff to continue to plan and respond to enivronmental conerns within the Tennessee Valley.

Measure: Number of watershed units (out of a total of 611) in the Tennessee River system that are in good or fair condition, according to state water standards (Targets are under further development.)

Explanation:This measure is no longer used as a stand-alone measure.

Measure: The ratio of TVA's actual water storage compared to storage potentially available 80% is seen as the appropriate target in years of normal rainfall. TVA will do further work to develop this metric since it is dependent in part on rainfall in the region.

Explanation:

Measure: Other measures are under development. The PART assessment gives TVA solid ratings for the agency's operation of its resource stewardship (non-power) program but TVA needs to further develop the annual and long-term measures for this program.

Explanation:

Is the program purpose clear?

Explanation: TVA's Stewardship Program carries out TVA's statutory responsibilities for managing the Tennessee River system and associated federal lands as identified in the TVA Act and in TVA's strategic goal of supporting a thriving river system.

Evidence: TVA's purpose was spelled out in the TVA Act of 1933. It includes flood control, navigation improvement, and the promotion of economic development. TVA's non-power program helps provide these services. TVA's Government Performance and Results Act (GPRA) Mission statement and its strategic objectives document this purpose. TVA's Vision and Goals establishes the goal of supporting a thriving river system. The Regional Resource Stewardship Council (RRSC), a Federal Advisory Committee Act (FACA)-chartered advisory group representing major stakeholders throughout TVA's seven-state service region, helps ensure that program beneficiaries have a means to express their views on the services TVA provides its stakeholders, consistent with the purpose spelled out in the TVA Act of 1933.

Does the program address a specific interest, problem or need?

Explanation: TVA was created to manage the Tennessee River system and its associated lands to improve navigation, reduce flood damage, generate power, and improve the standard of living in the TVA region.

Evidence: The Tennessee River system provides a set of public or semi-public goods and services. These need to be provided by either an interstate regional agency or by the Federal government. They require capital investments such as dams, locks, reservoirs, and public lands which, in turn, need to be operated and maintained to meet the needs of Valley residents and to protect wildlife and natural resources.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: TVA's Stewardship Program is designed to maintain and operate the Tennessee River system infrastructure, manage and protect public lands, improve water quality, provide recreational opportunities, and regulate development on TVA-owned and managed shoreline in accordance with reservoir management plans and policies.

Evidence: TVA's management of the Tennessee River system results in the avoidance of an average of $190 million/year in flood damage along the Tennessee, Ohio, and Mississippi Rivers, reduces transportation costs to shippers by over $400 million/year, improves water quality, and sets aside over 122,000 acres of public land for natural resource protection. TVA's GPRA Performance Plan identifies 10 performance measures that are tracked to verify that TVA's Stewardship Program continues to meet Valley needs for flood control, navigation, water quality, and recreation.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: TVA makes an important contribution to the well-being of the people it serves. These services are not unique since they could be provided by other federal agencies, state and local governments, or a non-federal, interstate organization. Similar services are in fact provided elsewhere in the country. But the system managed by TVA is doing an effective job delivering these services and little or no purpose would be served by changing the current system.

Evidence: The TVA Act and the Energy and Water Appropriations Act of 1998 document TVA's responsibility for essential stewardship activities including river and land management. TVA coordinates its stewardship program as appropriate with other agencies including the U.S. Army Corps of Engineers (USACE), the National Park Service (NPS), the National Forest Service (NFS), the US Fish and Wildlife Service, state wildlife and water agencies, and state historical preservation offices.

Is the program optimally designed to address the interest, problem or need?

Explanation: There are alternate ways to (a) organize and (b) finance this activity. But it makes sense to stick with the current organizational design and financing arrangements. (a) TVA's integrated river management system is recognized as an efficient and effective way to manage the entire watershed. TVA has managed this program this way since TVA was created 70 years ago. There are no obvious advantages to changing the current program design. (b) The program is financed by TVA's power program. It might be paid for instead through federal appropriations. (The federal government pays for similar programs elsewhere in the country.) But it makes sense to continue the current financing arrangement since the current arrangement is the result of a compromise Congress agreed to in 1998. See column to the right for more details.

Evidence: (a) The current program design works well. TVA's GPRA performance plan tracks agency performance in support of navigation, flood control, water quality, and land management. (b) With respect to program financing, TVA's non-power program might be paid for by federal government appropriations (as similar programs are elsewhere in the country) rather than by TVA power program revenues. However Congress agreed on the current funding arrangement in 1998. The arrangement was the result of a compromise involving a quid pro quo. TVA's power program would fund TVA's non-power program in the future. In return, Congress appropriated $1.1 billion to pay off a debt TVA owed the U.S. Treasury. The $1.1 billion appropriation, in the view of many, in effect compensated TVA financially for its obligation to fund TVA's non-power program in the future from proceeds of TVA's power program rather than appropriations.

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: TVA's s Stewardship program is designed to achieve TVA's corporate goals of supporting a thriving river system while contributing to a low-cost reliable power supply and supporting sustainable economic development in the Tennessee Valley.

Evidence: TVA's GPRA Strategic Plan and TVA's Internal performance reports provide relevant evidence and data. Specific performance targets have been established for water quality, dam safety, reservoir land management plans, flood storage, and reservoir system operation.

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: TVA has 10 annual performance goals specific to the Stewardship Program that track performance in the areas of navigation, flood control, water quality, land planning, and recreation. One of these, Watershed Water Quality, is an outcome indicator that is incorporated on TVA's corporate Balanced Scorecard. While TVA has done a very good job developing these performance goals, TVA probably should devote additional effort to this important task since some of the goals are ambiguous and in need of refinement.

Evidence: TVA's GPRA Strategic Plan and TVA "Winning Performance" program provide evidence of a well developed set of performance goals. It would be helpful if TVA would devote more effort to improving the way it measures its contribution in the flood prevention area, for example.

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: While TVA's Stewardship Program involves regional and local stakeholders in annual planning efforts, there are no major grantees or contractors with significant involvement in the program. TVA carries out joint planning efforts with watershed coalitions to identify action plans. Annual reviews of performance against plan are conducted and results are factored into the next year's action planning efforts. TVA meets annually with the chiefs of state water and wildlife agencies to coordinate planning efforts. TVA also coordinates activities related to navigation with the USACE per existing Memoranda of Understanding and with other federal agencies in the areas of land and resource protection and wildlife preservation.

Evidence: Evidence of TVA's efforts in this area includes documentation of annual reviews with watershed coalitions and state chiefs and planning efforts with the USACE and other agencies.

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: TVA coordinates flood control efforts with the USACE. It also collaborates, where appropriate, with the US Fish and Wildlife Service, US Forest Service, US Coast Guard, and state agencies.

Evidence: GPRA Strategic Plan, TVA/USACE MOU, joint 26a/USACE process, MOU's with state historic preservation offices.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: TVA's Regional Resource Stewardship Council (RRSC) reviewed TVA's major stewardship programs during FY2001 & 2002 and provided recommendations concerning program direction. TVA's Dam Safety program is reviewed by the Hydro Board of Consultants. Flood risk calculations are being reviewed by the consulting firm of Baker, Inc. Resource Stewardship and Dam Safety performance benchmarking reports by Haddon Jackson Consulting, annual reviews of aquatic weed management plans by stakeholder groups, joint annual planning meetings with the chiefs of state water and wildlife agencies, Environmental auditing according to TVA's Environmental Management System. Activity audits by TVA's Inspector General (IG). Program audits by PricewaterhouseCoopers (PwC).

Evidence: RRSC Recommendations; Hydro Board of Consultants Reports, Internal Audit Reports, PwC program audit reports, IG audit reports..

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: TVA utilizes an integrated budget and performance planning process where annual and out year performance targets are set based on funding needs and resource availability. TVA is in the process of adopting an activity based management methodology for tracking costs according to processes and related activities.

Evidence: TVA Performance Plans., performance planning process documentation.

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: TVA regularly reviews progress against performance targets and re-evaluates the effectiveness of action plans in achieving program goals. Lessons learned from each year's planning cycle are identified and improvements incorporated into the next planning effort. TVA has completed one revision to its GPRA strategic plan and is preparing to conduct a second revision in FY03. A business environment review process was established using internal scan teams and external subject matter experts addressing major aspects of the business/political/stakeholder/technology situation. A new Senior Vice President for Strategic Planning and Analysis joined TVA in June 2002. Major stewardship policies are reevaluated based on changes in stakeholder needs and modified as needed through public review processes. Recent examples include TVA's Shoreline Management Initiative (SMI) and the current Reservoir Operations Study (ROS).

Evidence: SMI documentation, Watershed planning process, ROS status documentation. Revised GPRA strategic plan. Business Environment Scan Team report.

Are acquisition program plans adjusted in response to performance data and changing conditions?

Explanation: TVA conducts monthly, quarterly, and annual reviews of expenditures and achievement of performance targets to identify gaps and develop action plans for reprioritizing resources as needed to close performance gaps. Budgeting and planning assumptions are modified as needed to improve alignment between targeted and achieved performance. TVA reviews its performance measures on an annual basis to ensure they reinforce the desired behaviors and achieve the desired results.

Evidence: Monthly/quarterly/annual performance reports; savings and use process

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule and performance goals?

Explanation: TVA is presently conducting an in-depth review of its Reservoir Operations policy. This study, initiated following a recommendation by the Regional Resource Stewardship Council, will identify whether alternative reservoir operating strategies could provide greater public benefits from the Tennessee River system. The study is evaluating navigation, flood control, power generation, water quality, recreation, and economic development benefits provided by the current and various alternative operating policies. The previous reservoir operations study was completed in the early 1990's. In 1998, TVA completed the Shoreline Management Initiative (SMI), a major review of its shoreline management policy which involved the creation and evaluation of a number of alternatives that represented varying impacts across multiple resource issues.

Evidence: ROS scoping document; ROS updates in Quarterly Reports to Congress; Lake Improvement Plan EIS, SMI EIS.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: TVA has a monthly expense and performance reporting system that includes both employee and contractor information. Major programs and projects are managed and performance tracked against budget and performance milestones. Business units review performance at least monthly, and actions are taken to adjust resources as needed based on budget or performance gaps.

Evidence: Monthly & quarterly performance reports. Savings and Use process documentation. ROS project management reports.

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: TVA utilizes an annual performance goal setting process for all management/professional employees. Specific performance goals are established and progress is reviewed at least quarterly. Business Units review cost & performance results versus plan on at least a monthly basis and actions are taken as needed to address gaps. Contractors are held accountable to a defined scope of work, budget, and schedule and progress is also reviewed at least monthly. Past performance is a major factor in new contract awards.

Evidence: Monthly & quarterly performance reports. Employee Performance Review and Development (PR&D) process. Contract scope of work/schedule/budget documentation.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Program funds are allocated in TVA's annual budget/performance planning process. Monthly expenditure budgets are established, progress against those budgets is monitored, and end-of-year forecasts are made on a monthly and quarterly basis. If under runs are forecast, the Savings and Use process allows funds to be re-allocated as needed to ensure achievement of program goals.

Evidence: Monthly and quarterly budget/performance reports and forecasts. Savings & Use reports.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: TVA tracks cycle time and percent cost recovery for permitting, cycle time and commitments met for environmental reviews, and land transfers and acquisitions. TVA identifies opportunities to collaborate with partners and local governments to reduce costs of providing services.

Evidence: Monthly performance reports. Collaborative agreements for recreation area management.

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: TVA's budgeting system includes all costs (direct and indirect) associated with operating its Stewardship program. TVA's accounting system captures and allocates all direct and indirect costs of program operation. Performance targets are set based on available resources. These systems allow impacts of changes in program funding to be estimated.

Evidence: TVA budget/performance plans.

Does the program use strong financial management practices?

Explanation: TVA has a rigorous financial management system that tracks costs and ensures billings and payments are made when due. TVA's financial controls and reports are certified by PricewaterhouseCoopers.

Evidence: PwC audit reports. TVA annual reports.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: TVA conducts reviews of program functions to ensure they continue to meet customer and stakeholder needs and are cost effective. TVA is carrying out a process documentation and improvement process to identify opportunities for improvement. TVA recently redesigned its process for prioritizing watershed improvement efforts to focus TVA activities and investments in hydrological units where the most improvement can be achieved. Shoreline stabilization projects are prioritized based on the severity of erosion, presence of archaeological sites, and vegetative cover.

Evidence: Process & Methods reports; Watershed and shoreline stabilization prioritization processes, functional review results.

Does the program define the required quality, capability, and performance objectives for deliverables?

Explanation: TVA's Stewardship Program does little contracting for capital assets. TVA services contracts have defined scopes of work, milestones, and deliverables, and project reviews are held to ensure appropriate progress is being made and that deliverables meet contract specifications.

Evidence: TVA contract documents.

Has the program established appropriate, credible, cost and schedule goals?

Explanation: Monthly budgets are developed and progress and expenditures are tracked against this control budget and scheduled milestone completion. Some goals, however, could benefit from more work.

Evidence: Monthly performance reports. Goals OMB believes need more work include "shipper savings" and "flood storage availability."

Has the program conducted a recent, credible, cost-benefit analysis that shows a net benefit?

Explanation: TVA's stewardship program carries out statutory responsibilities for navigation, flood control, power generation, and economic development. Internal analyses have been conducted that show the benefits to TVA's power customers from TVA's management of the Tennessee River System exceed the costs of the Stewardship program. TVA is presently conducting an analysis of its reservoir operations policies to identify costs and benefits of alternative operating strategies.

Evidence: Internal cost/benefit study; Reservoir Operations Study results.

Does the program have a comprehensive strategy for risk management that appropriately shares risk between the government and contractor?

Explanation: TVA's Stewardship Program is largely carried out by employees and costs are under the control of TVA's financial controls system. There is no significant risk due to contracting activities.

Evidence: TVA budget documents. Internal risk management analyses.

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: TVA's major Stewardship program goal is to support a thriving Tennessee River system. The primary outcome measure is watershed water quality which continues to show annual improvement.

Evidence: GPRA Annual Reports. TVA Balanced Scorecard.

Does the program (including program partners) achieve its annual performance goals?

Explanation: TVA has met its targets on these measures since reporting under GPRA was initiated. Achievement of targeted performance requires participation of partners including the USACE (shipper savings) and watershed coalitions (watershed water quality)

Evidence: GPRA Annual Performance Reports.

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: TVA's Stewardship program continues to meet or exceed performance goals without increasing overall costs. These efficiency improvements come through the use of public/private partnerships and more effective use of internal resources (managed attrition, realignment of functions, etc.)

Evidence: Annual budget documents, performance results;

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: Benchmarking exercises conducted this year with the USACE, BLM, and BPA indicate that TVA's performance and cost to conduct stewardship activities compare favorably with other federal agencies.

Evidence: Haddon-Jackson benchmark results.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: TVA has provided one independent assessment and an assessment from its advisory committee. It would be helpful if TVA sought and presented next year one or two additional independent assessments of its operation of this program.

Evidence: The Hydro Board of Consultants findings show approval of TVA's dam safety program activities. The Regional Resource Stewardship Council reviewed TVA's Stewardship program and recommended that TVA continue its major programs related to management of the Tennessee River System.

Were program goals achieved within budgeted costs and established schedules?

Explanation: TVA's Stewardship program meets performance targets within budgeted resources and in accordance with established schedules.

Evidence: GPRA Performance Reports; TVA monthly performance reports.