TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
THE GROWING NUMBER OF REQUESTS FOR
PROCUREMENT ACTIONS AT YEAREND INCREASES THE RISK OF INEFFICIENT AND
INEFFECTIVE SPENDING
Issued on September 24, 2007
Highlights
Highlights of
Report Number: 2007-10-181 to the
Internal Revenue Service Deputy Commissioner for Operations
Support.
IMPACT ON TAXPAYERS
Internal Revenue Service (IRS)
yearend procurements are increasing dramatically. The rush to use funds before they expire at
fiscal yearend increases the risk that items purchased may not meet the
requester’s need, were not obtained at the best possible price, or did not use
the best vendor or type of contract.
Therefore, funds may be spent inefficiently and ineffectively (i.e., not
in the best interest of the Federal Government or the American taxpayer).
WHY TIGTA DID THE AUDIT
TIGTA conducted
this audit to determine whether the IRS is efficiently managing its fiscal
yearend spending. This audit was part of
TIGTA’s Fiscal Year 2007 annual audit plan.
WHAT
TIGTA FOUND
Fiscal yearend
procurements have increased dramatically over the last 5 fiscal years, both in
dollar value and number of requests. The
dollar value of commitments in the Request Tracking System for the month of
September in Fiscal Year 2002 was $17 million.
In contrast, for Fiscal Year 2006, the value of commitments in September
had increased 671 percent to more than $131 million. In addition, the number of commitments had increased
by approximately 29 percent, from 1,182 in Fiscal Year 2002 to 1,529 in Fiscal
Year 2006. If the trend for spending at
fiscal yearend on procurement actions continues to increase, there is a strong
risk that the Office of Procurement (Procurement) will eventually be unable to
handle the workload.
In
addition to these trends, TIGTA identified deficiencies with 14 (15 percent) of
92 procurement actions awarded in August and September 2006. TIGTA believes appropriations regulations may
have been violated for 4 of the actions, while all required acquisition steps were
not completed for the remaining 10 actions.
WHAT TIGTA RECOMMENDED
TIGTA
recommended the
Deputy Commissioner for Operations Support, with support, assistance, and input
from the Deputy Commissioner for Services and Enforcement, ensure business unit
fiscal yearend procurement budgetary decisions and planning are performed in a
manner that results in the early involvement of Procurement in the acquisition
process. The Director, Procurement, should
review the 14 actions noted in this audit and ensure all acquisition steps were
completed and fully documented in the contract files. Further, the Director, Procurement, should
reinforce with Procurement personnel the importance of completing all
acquisition steps and issue guidance to the business units regarding the
requirements governing the use of appropriate fiscal year funding.
In
their response, IRS officials stated they agreed with the recommendations. They plan to attach a memorandum, signed by each
Deputy Commissioner, to the Advanced Acquisition Planning Information Request
and Transmittal. The memorandum will emphasize
the importance of teaming with Procurement at the earliest stages of the
acquisition life cycle. Procurement
completed a review of the 14 actions and plans to place a Memo of Record in
each contract file acknowledging acceptance of the violation for 13 of the
actions. For the remaining action,
Procurement’s review showed the services were nonseverable and were obligated
in the appropriate fiscal year. TIGTA accepts
Procurement’s review results as positive action taken in response to the recommendation. In addition, Procurement plans to complete
previously overlooked acquisition steps, and the Director, Procurement, plans
to issue an email to all Procurement personnel advising them of the importance
of adhering to procurement regulations and policies at all times. Finally, Procurement plans to develop a
discussion paper regarding bona fide need
and discuss the topic at the Acquisition Planning Conference.
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/200710181fr.html.
Email
Address: Bonnie.Heald@tigta.treas.gov
Phone Number: 202-927-7037
Web Site:
http://www.tigta.gov