TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
INVOICE AUDIT OF THE MANAGEMENT OF
SEIZED AND FORFEITED ASSETS CONTRACT – TIRNO-05-C-00010
Issued on January 11, 2007
Highlights
Highlights of
Report Number: 2007-10-025 to the
Internal Revenue Service Chief, Agency-Wide Shared Services.
IMPACT ON TAXPAYERS
Contract
expenditures represent a significant outlay of Internal Revenue Service (IRS)
funds. The Treasury Inspector General
for Tax Administration has made a commitment to perform audits of these expenditures. To the extent our reviews assist the IRS in
identifying and recovering inaccurate, unsupported, and unallowable charges,
contract expenditures are reduced and taxpayer funds are saved.
WHY TIGTA DID THE AUDIT
This audit was initiated to determine whether selected invoices
submitted and paid under contract number TIRNO-05-C-00010 were appropriate and
in accordance with the contract’s terms and conditions.
The purpose of our audit was to answer the following
questions:
1. What is the
process the IRS established for invoice verification prior to certifying
payment to the contractor?
2. Are the
invoice charges submitted by the contractor and paid by the IRS accurate,
supported, and allowable?
3. Are the
deliverables obtained through the contract acceptable as stipulated in the
contract?
WHAT
TIGTA FOUND
TIGTA
identified questionable charges of $21,297.88 that consisted of unallowable,
unsupported, and unreasonable costs. Examples
of the questionable charges included:
·
Two instances of employees
not meeting the qualifications for the labor category as stipulated in the
contract.
·
Two labor
categories that were not part of the contract being charged on invoices.
· One instance in which meals and incidental expenses were paid for a trip that was fewer than 12 hours in duration.
While a
significant amount of questionable charges were not identified, the IRS does
not have a complete invoice verification process established. The IRS does not receive timesheets and all
the documentation to support travel expenses before approving the invoices for
payment.
This
contract provided the support services necessary for the management of seized
and forfeited assets. These services
included establishing case files for each individual asset and performing legal
research, data analysis, data entry, and general clerical support. During the review, nothing came to our
attention that would lead us to believe there were significant problems with
contractor performance or any of the deliverables associated with the invoices
included in our tests.
WHAT TIGTA RECOMMENDED
The
Director, Procurement, should ensure the appropriate Contracting Officer reviews
the identified questionable charges of $21,297.88, and initiates any recovery
actions deemed warranted, and reviews all the labor categories to ensure
employees meet the qualifications stipulated in the contract and all labor
categories are properly included.
In
their response to the report, IRS officials agreed with our
recommendations. Based on the
Contracting Officer’s research and evaluation of additional supporting
documentation provided by the contractor, $270.10 of the $21,297.88 remained
questionable and will be recovered on an upcoming invoice. The Contracting Officer and the Contracting
Officer’s Technical Representative will review invoices for insufficient
supporting documentation prior to payment.
In addition, the Contracting Officer and the Contracting Officer’s
Technical Representative will review résumés and ensure all contractor
employees meet position qualifications, and the contractor will be required to
replace any individuals that fail to meet the qualifications. Further, the contract was modified to ensure
all labor categories and associated rates were included in the contract.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2007reports/200710025fr.html.
Email
Address: Bonnie.Heald@tigta.treas.gov
Phone
Number: 202-927-7037
Web Site: http://www.tigta.gov