This study uses the state report cards published by the Tennessee Department of Education to compare the academic achievement grades to the value-added grades to determine if there is a relationship between the two grading systems. The data used for this study are from the 2001, 2002, and the 2003 state report cards published for each school using the five subject areas of reading, language, math, science, and social studies. One thousand sixty schools in the state of Tennessee were for this study. The socioeconomic status (SES) of the schools was used as a covariate to determine if the socioeconomic status of the school has an effect on the relationship between achievement grades and value-added grades on the state report card. Schools were grouped into one of three categories. Schools with 0 – 33% of their students eligible for free/reduced meals were categorized as an upper SES school. Schools with 34-66% of their students eligible for free/reduced meals were categorized as a middle SES school, and schools with 67-100% of their students eligible for free/reduced meals were categorized as a lower SES school. The data used to determine the grades on the report card are based upon the results of the state mandated achievement tests given in the state of Tennessee. The 3 cumulative three year averages of the normal curve equivalent scores (NCEs) are used to determine the achievement grades while the cumulative three-year value-added percentages are used to determine the value-added grades on the state report cards. There was a statistically significant relationship between academic achievement grades and value-added grades in math, language, and social studies on the 2001, 2002, and 2003 state report cards. In reading, the 2002 state report card did not show a significant relationship between the grades while the 2001 and 2003 report cards did indicate a significant relationship. In science, the 2001 and 2003 report cards did not indicate a significant relationship between achievement and value-added grades while the 2002 report card did indicate a significant relationship between the grades.