TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
Annual Assessment of the Business Systems Modernization Program
Issued on June 24, 2008
Highlights
Highlights of
Report Number: 2008-20-129 to the
Internal Revenue Service Chief Information Officer.
IMPACT ON TAXPAYERS
The Business Systems Modernization (Modernization) Program, which
began in 1999, is a complex effort to modernize the Internal Revenue Service’s
(IRS) technology and related business processes. This effort involves integrating thousands of
hardware and software components and must be done while replacing outdated
technology and maintaining the current tax system. The IRS has achieved some successes in
addressing these crucial challenges, but it still must overcome significant
barriers to manage the inherent risks of modernization and deliver a level of
service American taxpayers expect.
WHY TIGTA DID THE AUDIT
This audit was initiated as part
of TIGTA’s Fiscal Year 2008 Annual Audit Plan for reviews of the IRS’ Modernization
efforts. TIGTA is required to assess and
report annually on the progress of the IRS’ Modernization Program.
WHAT
TIGTA FOUND
The IRS
has achieved successes when the Modernization Program followed its systems
development and management guidance. The
Program has progressed more effectively with the implementation of the
Enterprise Services organization’s management components, and with the
development of the Information Technology Modernization Vision and Strategy as
a map for future development. However,
the IRS and its contractors must overcome significant barriers in successfully
implementing the goals of the Modernization Program. The Modernization Program and processes have
not progressed enough to eliminate its material weakness designation, and
further reductions in funding could jeopardize the Program’s ability to deliver
planned improvements.
The IRS
originally estimated that the Modernization Program would last up to 15 years
and incur contractor costs of approximately $8 billion. According to the IRS’ original plan, the Modernization
Program would be past the halfway point by Calendar Year 2008. The Program is in its 10th year and has
received approximately $2.5 billion for contractor services, plus an additional
$310 million for internal IRS costs. The
IRS plans to spend $267 million on the Modernization Program in Fiscal Year
2008.
WHAT TIGTA RECOMMENDED
TIGTA
provided an assessment of the Modernization Program status and accomplishments
through Fiscal Year 2008, and did not offer any recommendations.
The
Chief Information Officer responded that the IRS was pleased that the annual
assessment recognized the progress in implementing Modernization projects,
validating improvements in contracting procedures affecting the Modernization Program,
and documenting work to institutionalize the Modernization Vision and
Strategy. The Chief Information Officer
also stated that the IRS has taken additional steps to improve Modernization Program
performance including development of strategies to confront risks and issues to
future system releases, efforts to address human capital challenges and
succession planning, and development and implementation of a methodology for
quantitatively measuring and reporting on project scope. The Chief Information Officer stated that he
appreciated TIGTA’s continued support and the valuable assistance and guidance
the auditors provide.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2008reports/200820129fr.html.
Email Address: inquiries@tigta.treas.gov
Phone Number: 202-622-6500
Web Site:
http://www.tigta.gov