Modernized e-File Project Integration Difficulties Have
Delayed Its Deployment
March 2004
Reference Number: 2004-20-072
This report has cleared the Treasury
Inspector General for Tax Administration disclosure review process and
information determined to be restricted from public release has been redacted
from this document.
March
31, 2004
MEMORANDUM FOR
CHIEF INFORMATION OFFICER
FROM: Gordon C. Milbourn III /s/ Gordon C.
Milbourn III
Acting Deputy Inspector
General for Audit
SUBJECT: Final Audit Report - Modernized e-File Project Integration
Difficulties Have Delayed Its Deployment (Audit # 200320040)
This
report presents the results of our review of the Internal Revenue Service’s
(IRS) efforts to develop and deploy the Modernized e-File (MeF) Project. The
overall objective of this review was to determine whether the IRS will timely
and effectively deliver the MeF Release 1 requirements, which are to provide
Internet-based tax form filing for corporations and tax exempt organizations. This review is the first in a series of
reviews of MeF Project development and deployment activities and is part of our
Fiscal Year 2004 audit plan for reviews of the IRS’ modernization efforts.
In
summary, the
MeF Project is the future of electronic filing with the IRS. The Project’s goal is to
replace the current filing technology with a modernized, Internet-based
electronic filing platform for any IRS form.
The MeF Project has plans for five releases and is currently in Release
1. The first three releases will
develop an electronic filing system for forms filed by corporations and tax
exempt organizations. The MeF Release 4
will add forms filed by partnerships, estates, and trusts, and Release 5 will
add forms and schedules filed by individuals.
The IRS Business Systems
Modernization Office (BSMO) and the MeF Project’s contractor have made
significant progress in developing the MeF Release 1. Overall, the Project’s development plans included the desired
capabilities. When implemented, the MeF
will increase the use of electronic filing through a
system that is efficient and easy to access, use, and maintain. This goal supports the President’s
initiative for the Federal Government’s use of an Internet-based technology.
Although the MeF Release 1
application and design development has incorporated the desired capabilities,
incompatibilities exist between the application and the modernization program’s
infrastructure. This divergence
needs to be resolved to allow Internet access to the MeF Release 1 by
taxpayers, practitioners, and the IRS.
The divergence was created because the BSMO
project
team did not effectively communicate the modernized infrastructure requirements
to its contractor. Details in the documentation of the MeF
system’s physical design were not used to ensure the Internet filing
application development was in line with the modernized infrastructure. This divergence has contributed to a delay
in the deployment of the MeF Release 1 that may minimize the benefits planned
for the Tax Year 2003 corporate and tax exempt organization tax returns with
filing due dates in 2004. Also, the IRS
is incurring additional costs to modify the modernized infrastructure to accept
the MeF Release 1 application.
To assess project management
controls for the MeF Project development, we reviewed 32 project defect reports
that had a change in their severity ratings.
Of these, 6 ratings were changed in error and 26 reports did not include
any approval documentation for the change in the rating. Without appropriate approval, these changes
could cause significant defects to miss the attention needed for resolution,
possibly delaying Project deployment.
To
help the IRS proceed in modernizing its programs and avoid future difficulty in
migrating projects to its modernization program, we recommended the Chief
Information Officer (CIO) update the Enterprise Life Cycle (ELC) to ensure it
has provisions to migrate projects into the modernization program, including
assessments of ELC and Enterprise Architecture compatibility and the ability to
manage existing contracts; deliver a project’s physical design documentation
prior to the project development activities; and certify that a project’s
physical design is in compliance with the Enterprise Architecture. To help
ensure adequate control for managing defect reports, the CIO should also update the ELC to designate personnel with the
authority to approve a change in the severity ratings of defect reports and
require documentation to show the approval for the changes.
Management’s Response: The CIO agreed with most of the
recommendations presented and has mandated that all projects migrating to the
modernization program conform to the Enterprise Architecture and follow an
appropriate variant of the ELC. The CIO
agreed that a project’s physical design
needs to be documented prior to development activities and plans to establish
an ELC Milestone 4a process to formally reflect such a requirement. The BSMO plans to use Milestone 4a to
incorporate a review to determine whether a project’s physical design is in
compliance with the Enterprise Architecture.
The BSMO has also taken action to improve controls over changes to
defect severity designations. However,
the CIO does not believe it is necessary to update the ELC with these process
enhancements or additions. Management’s
complete response to the draft report is included as Appendix V.
Office of Audit Comment: Although
the corrective actions generally addressed the recommendations, it is unclear where the procedures to migrate projects and
to improve the documentation of changes to the severity of the defects will be
recorded, since the ELC is not being changed. Because the ELC provides direction to IRS project managers, we
believe procedures to migrate projects and controls for changing the severity
of reported testing defects should be incorporated into the ELC for future
reference. While we still believe our
recommendations are worthwhile, we do not intend to elevate our disagreement
concerning them to the Department of the Treasury for resolution.
The
CIO’s response also indicates that the MeF Project went live only 7 weeks later
than the early January target date set over 18 months ago. Documentation we reviewed during the audit
indicated the IRS promised the software developers they could test their
products beginning November 3, 2003.
Due to the physical design problems cited above, software developers
were not able to start testing until February 4, 2004, over 13 weeks later than
originally promised. In addition, the
registered user portal that allows Internet access to the MeF system was not
available to the public until March 17, 2004, resulting in a delay of
approximately 11 weeks in the actual implementation date.
The
CIO’s response further stated that the BSMO did ensure compliance with the
modernized infrastructure, and ensuring this compliance was a significant
factor leading to the several weeks delay.
However, our review indicated that the BSMO did not initially comply
with the modernized infrastructure requirements, which led to delays because
changes had to be made to the modernized infrastructure to accept the MeF
system application. If the BSMO had
ensured the MeF Project complied with the modernized infrastructure before development
began, the delays would not have occurred.
Copies of this
report are also being sent to the IRS managers affected by the report
recommendations. Please contact me at
(202) 622-6510 if you have questions or Margaret E. Begg, Assistant Inspector
General for Audit (Information Systems Programs), at (202) 622-8510.
The Modernized
e-File Project Development Progress Has Been Significant
Ineffective
Coordination About the Project Design Has Delayed Deployment
Reassessments of Defect Severity Did Not Include Approval Documentation
Appendix I – Detailed Objective, Scope, and Methodology
Appendix II – Major Contributors to This Report
Appendix III – Report Distribution List
Appendix IV – Enterprise Life Cycle Overview
Appendix V – Management’s Response to the Draft Report
The Internal Revenue Service (IRS) has offered electronic filing options to individual taxpayers since the 1980s. In June 2000, the IRS approved two separate nonmodernization (non-PRIME) electronic filing projects. One project was for corporate forms; the other project was for tax exempt organization forms. As the projects progressed, the IRS decided to combine the projects to eliminate duplication of effort and oversight and bring the combined project into the larger IRS/PRIME modernization effort. The project was renamed the Modernized e-File (MeF) Project and was initiated September 1, 2002.
The MeF Project is
the future of electronic filing with the IRS.
The Project’s goal is to replace the current filing technology with a
modernized, Internet-based electronic filing platform for any IRS form.
Providing the
capability for Internet-based filing of 330 forms through the MeF system
supports and facilitates the IRS’ commitment to achieve the IRS Restructuring
and Reform Act of 1998 (RRA 98) goal of receiving “at least 80 percent of all
tax returns in electronic form by the year of 2007.” Available data show that in 2001 about 31 percent of the
individual tax returns were filed electronically and in 2002 about 36 percent
were filed electronically.
The U.S. Corporation
Income Tax Return (Form 1120), U.S. Income Tax Return for an S Corporation (Form
1120S), and Return of Organization Exempt From Income Tax (Form 990) do not use
the current electronic filing system.
Successfully implementing the MeF system for filing these returns (plus
schedules and attachments) will give the IRS the capability to achieve the RRA
98 goals. The U.S. Individual Income
Tax Return (Form 1040), U.S. Income Tax Return for Estates and Trusts (Form
1041), and U.S. Return of Partnership Income (Form 1065) can be electronically
filed now, but the current process has file size and standardization
limitations that hinder achieving an 80 percent submission rate. Without the MeF system, the IRS does not
have the means available to meet this mandated goal.
The MeF Project has
plans for five releases and is currently in Release 1. The first three releases will develop an
electronic filing system for forms filed by corporations and tax exempt
organizations. The MeF Release 4 will
add forms filed by partnerships, estates, and trusts, and Release 5 will add
forms and schedules filed by individuals.
This review was performed at the Business Systems Modernization Office (BSMO) facilities in New Carrollton, Maryland, during the period October 2003 through January 2004. The audit was conducted in accordance with Government Auditing Standards. Detailed information on our audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II. Appendix IV presents an overview of the components of the Enterprise Life Cycle (ELC).
The BSMO and the contractor have made significant progress
in developing the MeF Release 1.
Overall, the Project’s development plans included the desired
capabilities. These capabilities
include the use of an Extensible Markup Language
(XML) -based system to receive returns over the Internet. The MeF system will also be able to accept
multiple tax return types and multiple tax returns submitted in the same
transmission.
Some
other benefits of the MeF system include:
·
The IRS will realize a
reduced effort associated with receiving, processing, manually entering data,
and resolving data entry errors from paper returns.
·
The IRS will reduce system
maintenance costs with the use of XML as the electronic means for filing.
·
Taxpayers, tax practitioners,
and the IRS will no longer have to provide the same amount of storage space
that was needed for paper returns.
·
Taxpayers and tax
practitioners will save time and money associated with copying, assembling, and
mailing a return.
·
State agencies will be able
to electronically share tax and information return data.
·
Taxpayers, tax practitioners,
and IRS employees will benefit from the increased amount of data available to
customer support personnel.
Another significant aspect of the MeF system’s goal is to
increase the use of electronic filing through a system that is efficient and
easy to access, use, and maintain. This
goal supports the President’s initiative for the Federal Government’s use of an
Internet-based technology. Also, the
MeF system has benefits beyond the IRS functions. For disclosable information from filings of exempt organizations
(Form 990), it will provide more accurate and timely electronic data for both
public use and Federal and state law enforcement agency review.
The MeF system has been designed to integrate with the capabilities offered by the e-Services Project. This Project provides mechanisms for registered Electronic Return Originators (ERO) to sign up for Internet capabilities offered by the IRS.
Although the MeF Release 1 application and design development has incorporated the desired capabilities, incompatibilities exist between the application and the modernization program’s infrastructure. This divergence has contributed to a delay in the deployment of the MeF Release 1 that may minimize the benefits planned for the Tax Year (TY) 2003 corporate and tax exempt organization tax returns with filing due dates of March 15, 2004, and May 15, 2004, respectively. Also, the IRS is incurring additional costs to modify the modernized infrastructure to accept the MeF Release 1 application.
The MeF Release 1’s Internet filing application provides the
ability to file tax returns via the Internet.
The modernized infrastructure is designed to use a single Java Virtual
Machine® to run the Internet filing application. The MeF Project contractor designed the
Internet filing application to use multiple Java Virtual Machines®. This difference between
the application and the modernized infrastructure needs to be resolved to allow Internet access to
the MeF Release 1 for deployment to taxpayers, practitioners, and the IRS.
The BSMO accepted integration responsibilities to meet its accelerated project development schedule
The MeF Project moved from an in-house IRS development
initiative to a modernization project in October 2002. Because it was not initiated as a
modernization project, the in-house IRS development team used a project
development process different from the ELC process, which is required for all
modernization projects. The contractor
assigned to design and develop the MeF system was engaged while the Project was
an in-house initiative.
In anticipation of the MeF
Project’s migration to the modernization program, the PRIME contractor
conducted a feasibility assessment that led it to a decision not to bid for the
role as integrator (the entity responsible for coordinating development
projects into the modernized IRS systems).
It was not willing to accept the risk to deliver the MeF Release 1 for
the TY 2003 corporate and tax exempt organization tax return filings. IRS senior management decided to move
forward with the concept of the BSMO being the integrator, believing it was in
a better position to direct and coordinate the overall project activities for
delivery (i.e.,
incorporating the MeF Project into the modernization program).
The BSMO accepted this role, in part, to satisfy previous
commitments to external stakeholders (taxpayers, practitioners, and software
developers) that the MeF Release 1 would be operational for the filing of the TY
2003 corporate and tax exempt organization tax returns. It also believed that having the PRIME
contractor manage the work of the application contractor was not necessary and
would have added substantial overhead costs.
The BSMO project team did not effectively communicate the modernized infrastructure requirements to its contractor
The IRS conducted a review in December 2002 to certify the
MeF Project’s logical design with the Enterprise Architecture. Normally, the PRIME contractor conducts the
Enterprise Architecture certification for modernization projects. Although it was invited to participate, the
PRIME contractor declined because the project documentation was not updated to
be in compliance with the ELC.
IRS executives decided not to update the existing project
documentation because they did not believe it was the best use of resources and
would potentially delay the Project.
Taking the steps to update the MeF Project’s documentation and to have
the PRIME contractor participate in the certification process using its experience
with the modernized infrastructure may have provided an opportunity to identify
technical problems with the MeF Project.
Although the modernized infrastructure prescribes that applications should run on
a single Java Virtual Machine®, the contractor’s April 30,
2003, physical design of the Internet filing application required the use of
multiple Java Virtual Machines®. The contractor provided the finalized physical design to the IRS
on May 13, 2003. This version of the
Internet filing application design did not specify the use of single or multiple
Java Virtual Machines®.
On June 3, 2003, the contractor conducted a final walk-through
of the MeF Release 1 Internet filing application’s physical design with the IRS
and the PRIME contractor. Although the
plan to use multiple Java Virtual Machines® was evident during the
walk-through, neither the BSMO nor the PRIME contractor recognized this
divergence between the Internet filing application design and the modernized infrastructure.
According to the contractor, the information it received
necessitated the use of multiple Java Virtual Machines®. This occurred because
the BSMO did not provide adequate guidance about these requirements to the
contractor and did not ensure the application’s design was compliant with the modernized infrastructure specification to
use a single Java Virtual Machine®.
The MeF Project engineering review performed by the IRS and the PRIME contractor encountered project documentation problems
The BSMO initiated an engineering review as part of its
project development process to assess the adequacy of the MeF Project’s
physical design. On June 19, 2003, the
PRIME contractor and IRS staff conducted the engineering review. While
the use of infrastructure design artifacts helped the review team understand
how key information flows through the MeF system, the team reported that this
information did not sufficiently describe the design of the MeF system
components.
The review team further noted that the application and infrastructure design documents were not only separate but also were different in format and content. As a result, the team related it was likely that some important issues were not identified during the review session. In addition, they reported that the absence of a coherent, integrated set of design documentation will cause significant problems downstream after MeF Release 1 has been placed into production and becomes the responsibility of the IRS to maintain and enhance.
Actions to resolve the Internet filing application integration difficulties are in process
On August 22, 2003, MeF Project staff first surfaced the integration difficulties with the Internet filing application during a regularly scheduled integration conference call between IRS and contractor personnel. Between September 3 and September 11, 2003, the contractor held meetings to work through technical issues, including the Internet filing application issue. During these meetings, the IRS and the contractor decided to modify the infrastructure for the MeF Release 1 to allow the application to use multiple Java Virtual Machines®. After the MeF Release 1 becomes operational, the BSMO plans to revisit the design to identify the best solution for the business needs of the IRS and to ensure both the Enterprise Architecture and MeF Project reflect that solution.
The IRS submitted a change request on October 14, 2003, to modify the Enterprise Architecture to support the use of multiple Java Virtual Machines®. The BSMO will not know the costs involved with reengineering the infrastructure to accept the Internet filing application until the IRS receives the billings from the contractors.
Several causes contributed to the integration difficulties associated with the MeF Project Internet filing application
The integration difficulties presented above can be
attributed to incomplete guidance in the ELC to promote adequate coordination
in application development that ensures compliance with the Enterprise
Architecture.
·
There are no procedures for migrating IRS in-house
development projects to the modernization program.
-
Requiring projects to become ELC-compliant, as part of
the migration process, would necessitate involving the PRIME contractor in the
Enterprise Architecture certification.
If the PRIME contractor had conducted the certification, it may have identified
the divergence related to the Internet filing application as early as December
2002.
-
The BSMO also encountered migration problems with the MeF Project’s
contracts. The Project had three
contracts with two contractors when it migrated from an in-house project. Two additional contracts with the PRIME
contractor were required for development as a modernization project. Because of the five separate contracts
through three contractors associated with the Project’s development, the BSMO
encountered project management, coordination, and communication problems. This resulted in the BSMO spending more time
than it preferred to manage the activities related to each contractor and
contract provision.
· There is no guidance designating a point in the project life cycle for delivering a system’s physical design. The physical design should be available before the development of the system so details are available to identify any possible issues between the application and the infrastructure.
· There is no requirement that a project be certified using the physical design to ensure compliance with the Enterprise Architecture.
Although the ELC does not provide the controls to ensure project design complies with the modernized infrastructure, the PRIME contract requires this compliance. Specifically, the contract states:
The PRIME [contractor]
will assume total responsibility and be singularly accountable for performance
of the contract. Specific areas where
the PRIME [contractor] will have lead performance responsibility include:
-
Modernization infrastructure.
-
Horizontal integration.
-
Compliance with the modernization blueprint
architecture and standards.
- Contractor operations and maintenance.
Further, the modernization infrastructure contract provides that the PRIME Infrastructure Engineering organization is responsible for infrastructure integration. The contract includes the provision that during the development phase the PRIME Infrastructure Engineering organization will ensure architectural compliance of the infrastructure. New infrastructure requirements will be traced back to the Enterprise Architecture to ensure compliance and to identify differences with the existing Enterprise Architecture. This contract also specifies that the PRIME contractor is responsible for providing technical assistance and expertise to help enable MeF Project developers create and deploy the MeF system.
Because the BSMO did not ensure compliance with the modernized infrastructure, the MeF Release 1 deployment has been
delayed. Although the BSMO took
additional steps to provide quality control in the MeF Project development by
instituting an engineering review, the review was not effective because proper
documentation was not provided to the reviewers to prepare for the review.
The BSMO based the engineering review on the logical design
documentation and an oral briefing about the physical design, even though the
physical design documentation was available.
Use of the physical design documentation may have allowed earlier identification
of the Internet filing application issue.
Even after the issue was identified in August 2003, closer attention to
the significance of
the difference between the operating requirements of the Internet filing
application and the modernized
infrastructure’s
design could have closed this divergence prior to project testing.
Taking actions to resolve this issue when it was identified
could have minimized the effect on the MeF Project’s schedule. Since the issue was identified late in the
project development cycle, there has been a greater effect on the Project’s
schedule because testing has been delayed until the issue is resolved. Due to the delays in testing, the MeF
Release 1 original deployment date of January 4, 2004, has been changed several
times and, at the time we completed our fieldwork, was planned for February 13,
2004. However, the MeF Release 1
deployment activities are behind schedule, and deployment is not definite until
the Internet filing application is operational. While planned for availability by November 3, 2003, the Internet
filing application was not operational as of January 12, 2004.
To help ensure the efficient and effective development of modernization projects, the Chief Information Officer (CIO) should update the ELC to include provisions to:
1. Migrate projects into the modernization program. The procedures should include:
- An assessment of a project’s compliance with ELC documentation requirements and consideration of the need for updating relevant documentation to effectively proceed with the development of the project.
- An analysis of a project’s compatibility with the Enterprise Architecture.
- An analysis of existing contract requirements and the impact of these contracts on the management of a project throughout its life cycle. Consideration should be given, if feasible, to consolidating the contracts. Consolidating the contracts as part of the migration may help with the efficiency and effectiveness of the project management. The contract assessment should also ensure provisions include requirements to follow the ELC and to comply with the Enterprise Architecture.
Management’s Response: The CIO responded that the IRS will ensure the procedures outlined above are implemented for any future projects migrating to the modernization program and has mandated that all systems development projects conform to the Enterprise Architecture and follow an appropriate variant of the ELC. The CIO stated an update to the ELC is not necessary at this time.
Office of Audit Comment: Although the CIO indicated that the above procedures will be followed, it is unclear where these procedures will be documented, since the ELC is not being changed. Because the ELC provides direction to project managers, we believe the procedures for migrating projects into the modernization program should be incorporated into the ELC for future reference and to prevent delays similar to those experienced by the MeF Project.
The CIO’s response also indicates that the MeF Project went live only 7 weeks later than the early January target date set over 18 months ago. Documentation we reviewed during the audit indicated the IRS promised the software developers they could test their products beginning November 3, 2003. Due to the physical design problems cited above, software developers were not able to start testing until February 4, 2004, over 13 weeks later than originally promised. In addition, the registered user portal that allows Internet access to the MeF system was not available to the public until March 17, 2004, resulting in a delay of approximately 11 weeks in the actual implementation date.
The CIO’s response further
stated that the BSMO did ensure compliance with the modernized infrastructure,
and ensuring this compliance was a significant factor leading to the several
weeks delay. However, our review
indicated that the BSMO did not initially comply with the modernized
infrastructure requirements, which led to delays because changes had to be made
to the modernized infrastructure to accept the MeF system application. If the BSMO had ensured the MeF Project
complied with the modernized infrastructure before development began, the
delays would not have occurred.
2. Deliver a project’s physical design documentation prior to the start of project development activities.
Management’s Response: The CIO responded that this is already called for in the ELC. However, the BSMO is in the process of establishing an ELC Milestone 4a to formally reflect such a requirement.
3. Certify that a project’s physical design is in compliance with the Enterprise Architecture.
Management’s Response: The CIO responded that the BSMO currently certifies that a project’s logical design is in compliance with the Enterprise Architecture as one of the ELC’s Milestone 3 exit criteria. While the BSMO does not intend to call it a certification, a review of whether the physical design has implemented the certified logical design will be conducted as a Milestone 4a exit requirement.
Problems, also known as defects, may
be found in software, hardware, documents, or other controlled products. Typically, defects are identified during
testing or by the end user of a product.
The BSMO and the PRIME contractor adopted procedures for identifying,
reporting, and resolving defects.
Defect reports are given severity ratings that are used to determine the urgency in correcting the defects. There are four levels of priority to identify the severity of a defect report: Critical, High, Medium, and Low. Defect reports with a Critical or High severity are more serious and require immediate attention.
To assess project management controls for the MeF system development, we reviewed all 32 defect reports with a change in the severity rating from a universe of 774 defect reports. Of these, 6 ratings were changed in error and the remaining 26 reports did not include any approval documentation for the change in the rating. All but one of the changes reduced the severity rating. All ratings that were reduced were changed to a Medium or Low severity rating.
The ELC does not include procedures to approve and document
a change in the severity rating of defect reports. The Defect Report Coordinator changed the rating of the majority
of the selected defect reports, even though the ELC does not delegate the
Coordinator this responsibility. The ELC does provide that the Defect Review Board should
resolve issues about defect report severity.
However, the BSMO did not have documentation to show that the Defect
Review Board approved the changes in severity rating for the selected defect
reports.
The absence of specific guidance in the ELC allows for defect report severity rating changes without sufficient consideration of the effect on deployment. These changes could cause significant defect reports to be moved to a lower severity rating and result in their not getting the attention needed for resolution. Without timely resolution, the defect reports in question could delay deployment.
To help ensure adequate control over defect reporting, resolution, and closure for future modernization projects, the CIO should:
4. Update the ELC procedures to designate personnel with the authority to approve a change in the severity rating of a defect report and require documentation to show the approval for a change in severity rating.
Management’s Response: The CIO agreed that there has not been adequate documentation of the Defect Review Board’s actions in changing the severity of defects. The Defect Report Tracking System provides a comments section in which such documentation could be provided, but it has been inconsistently used for such a purpose. Based on this audit, the BSMO has changed two procedures. Now, all severity changes performed by the IRS Defect Report Coordinator are documented, as are all comments made by the Defect Review Board. However, the CIO did not believe an update to the ELC is necessary because the Defect Reporting Tracking and Resolution process is controlled by the PRIME contractor’s configuration management procedures.
Office of Audit Comment: Although the actions taken by the CIO will improve the documentation of changes to the severity of the defects, it is unclear where these procedures will be documented for IRS use, since the ELC is not being changed. Because the ELC provides direction to IRS project managers, we still believe controls for changing the severity of reported testing defects should be incorporated into the ELC for future reference.
Appendix I
Detailed
Objective, Scope, and Methodology
The overall objective of this review was to determine whether the Internal Revenue Service (IRS) will timely and effectively deliver the Modernized e-File (MeF) Release 1 requirements, which are to provide Internet-based tax form filing for corporations and tax exempt organizations. This review is the first in a series of reviews of MeF Project development and deployment activities and is part of our Fiscal Year 2004 audit plan for reviews of the IRS’ modernization efforts. To accomplish our objective, we:
I.
Determined
the status of the MeF Release 1 and the impact that risks and issues will have
on the Project in meeting its Tax Year (TY) 2003 corporate and tax exempt
organization tax return filing requirement.
A.
Determined the
status of the Internet filing application solution for the architectural mismatch between the MeF
system and the modernized infrastructure.
B.
Determined
the impact that combined System Integration Testing and System Acceptance
Testing activities will have on the MeF Project schedule.
1.
Assessed the adequacy of the resolution of problems
identified during project testing.
2.
Reviewed all 32 defect reports with a change in
severity rating from a population of 774 identified defect reports as of
November 14, 2003.
C.
Determined the status of the scope of MeF Release 1
capabilities planned for the TY 2003 corporate and tax exempt organization tax
returns with filing due dates of March 15, 2004, and May 15, 2004,
respectively.
II. Determined the impact that cross-project dependencies had on the timely delivery of the MeF Release 1 and on other modernized projects.
III. Determined the impact of delays of MeF Release 1 deployment on external stakeholders: software developers, tax practitioners, corporations, and tax exempt organizations.
Appendix II
Major
Contributors to This Report
Margaret E. Begg, Assistant Inspector General for Audit
(Information Systems Programs)
Gary Hinkle, Director
Edward A. Neuwirth, Audit Manager
Bruce Polidori, Senior Auditor
Beverly Tamanaha, Senior Auditor
Linda
Screws, Auditor
Appendix III
Commissioner C
Office of the Commissioner – Attn: Chief of Staff C
Deputy Commissioner for Operations Support OS
Commissioner, Large and Mid-Size Business Division SE:LM
Commissioner, Small Business/Self-Employed Division SE:S
Commissioner, Tax
Exempt and Government Entities Division
SE:T
Commissioner, Wage and Investment Division SE:W
Associate Commissioner, Business Systems Modernization OS:CIO:B
Chief, Information Technology Services OS:CIO:I
Deputy Associate Chief
Information Officer, Systems Integration
OS:CIO:B:SI
Deputy Associate Commissioner, Program Management OS:CIO:B:PM
Acting Director, Portfolio Management OS:CIO:R:PM
Chief Counsel CC
National Taxpayer Advocate TA
Director, Office of Legislative Affairs CL:LA
Director, Office of
Program Evaluation and Risk Analysis
RAS:O
Office of
Management Controls OS:CFO:AR:M
Audit Liaison:
Associate Commissioner, Business Systems Modernization OS:CIO:B
Chief, Information Technology Services OS:CIO:I
Appendix IV
Enterprise Life Cycle Overview
The
Enterprise Life Cycle (ELC) defines the processes, products, techniques, roles,
responsibilities, policies, procedures, and standards associated with planning,
executing, and managing business change.
It includes redesign of business processes, transformation of the
organization, and development, integration, deployment, and maintenance of the
related information technology applications and infrastructure. Its immediate focus is the Internal Revenue
Service (IRS) Business Systems Modernization (BSM) program. Both the IRS and the PRIME contractor must
follow the ELC in developing/acquiring business solutions for modernization
projects.
The
ELC framework is a flexible and adaptable structure within which one plans,
executes, and integrates business change.
The ELC process layer was created principally from Computer Sciences
Corporation’s Catalyst®
methodology. It is intended to improve
the acquisition, use, and management of information technology within the IRS;
facilitate management of large-scale business change; and enhance the methods
of decision making and information sharing.
Other components and extensions were added as needed to meet the
specific needs of the IRS BSM program.
A
process is an ordered, interdependent set of activities established to
accomplish a specific purpose.
Processes help to define what work needs to be performed. The ELC methodology includes two major groups of
processes:
Life-Cycle
Processes,
which are organized into phases and subphases and which address all domains of
business change.
Management Processes, which are organized into
management areas and which operate across the entire life cycle.
The life-cycle processes of the ELC are divided into
six phases, as described below:
·
Vision and Strategy - This phase establishes the
overall direction and priorities for business change for the enterprise. It also identifies and prioritizes the
business or system areas for further analysis.
·
Architecture - This phase establishes the
concept/vision, requirements, and design for a particular business area or
target system. It also defines the
releases for the business area or system.
·
Development - This phase includes the
analysis, design, acquisition, modification, construction, and testing of the
components of a business solution. This
phase also includes routine planned maintenance of applications.
·
Integration - This phase includes the
integration, testing, piloting, and acceptance of a release. In this phase, the integration team brings
together individual work packages of solution components developed or acquired
separately during the Development phase. Application and technical
infrastructure components are tested to determine if they interact
properly. If appropriate, the team
conducts a pilot to ensure all elements
of the business solution work together.
·
Deployment - This phase includes
preparation of a release for deployment and actual deployment of the release to
the deployment sites. During this
phase, the deployment team puts the solution release into operation at target sites.
·
Operations and Support - This phase addresses the
ongoing operations and support of the system. It begins after the business processes and
system(s) have been installed and have begun performing business
functions. It encompasses all of the
operations and support processes necessary to deliver the services associated
with managing all or part of a computing environment.
The Operations and Support phase includes the scheduled activities, such as planned maintenance, systems backup, and production output, as well as the nonscheduled activities, such as problem resolution and service request delivery, including emergency unplanned maintenance of applications. It also includes the support processes required to keep the system up and running at the contractually specified level.
Besides the life-cycle processes, the ELC also
addresses the various management areas at the process level. The management areas include:
·
IRS Governance and
Investment Decision Management - This area is responsible for managing the overall
direction of the IRS, determining where to invest, and managing the investments
over time.
·
Program Management and
Project Management - This area is responsible for organizing, planning, directing, and
controlling the activities within the program and its subordinate projects to
achieve the objectives of the program and deliver the expected business results.
·
Architectural
Engineering/Development Coordination - This area is responsible for managing the technical
aspects of coordination across projects and disciplines, such as managing
interfaces, controlling architectural changes, ensuring architectural compliance,
maintaining standards, and resolving issues.
· Management Support Processes - This area includes common management processes, such as Quality Management and Configuration Management, that operate across multiple levels of management.
The ELC establishes a set of repeatable processes and a system of milestones, checkpoints, and reviews that reduce the risks of systems development, accelerate the delivery of business solutions, and ensure alignment with the overall business strategy. The ELC defines a series of milestones in the life-cycle processes. Milestones provide for “go/no-go” decision points in the project and are sometimes associated with funding approval to proceed. They occur at natural breaks in the process where there is new information regarding costs, benefits, and risks and where executive authority is necessary for next phase expenditures.
There are five milestones during the project life cycle:
·
Milestone 1 – Business
Vision and Case for Action. In the activities leading up
to Milestone 1, executive leadership identifies the direction and priorities
for IRS business change. These guide
which business areas and systems development projects are funded for further
analysis. The primary decision at
Milestone 1 is to select BSM projects based on both the enterprise-level Vision
and Strategy and the Enterprise Architecture.
·
Milestone 2 – Business Systems Concept and Preliminary Business
Case. The activities leading up to
Milestone 2 establish the project concept, including requirements and design
elements, as a solution for a specific business area or business system. A preliminary business case is also
produced. The primary decision at
Milestone 2 is to approve the solution/system concept and associated plans for
a modernization initiative and to authorize funding for that solution.
· Milestone 3 – Business Systems Design and Baseline Business Case. In the activities leading up to Milestone 3, the major components of the business solution are analyzed and designed. A baseline business case is also produced. The primary decision at Milestone 3 is to accept the logical system design and associated plans and to authorize funding for development, test, and (if chosen) pilot of that solution.
·
Milestone 4 –
Business Systems Development and Enterprise Deployment Decision. In the activities leading up to Milestone 4,
the business solution is built. The
system is integrated with other business systems and tested, piloted (usually),
and prepared for deployment. The
primary decision at Milestone 4 is to authorize the release for enterprise-wide
deployment and commit the necessary resources.
·
Milestone 5 – Business Systems Deployment and Post-Deployment
Evaluation. In the activities leading up
to Milestone 5, the business solution is fully deployed, including delivery of
training on use and maintenance. The
primary decision at Milestone 5 is to authorize the release of
performance-based compensation based on actual, measured performance of the business
system.
Appendix V
Management’s Response to the Draft Report
The response was
removed due to its size. To see the
response, please go to the Adobe PDF version of the report on the TIGTA Public
Web Page.