TREASURY
INSPECTOR GENERAL FOR TAX ADMINISTRATION
Office of Audit
THE MODERNIZATION VISION AND STRATEGY
PROGRAM IS ACHIEVING DESIRED RESULTS, BUT RISKS REMAIN
Issued on October 31, 2008
Highlights
Highlights of
Report Number: 2009-20-008 to the
Internal Revenue Service Chief Information Officer.
IMPACT ON TAXPAYERS
Since the Business Systems
Modernization program was initiated in Fiscal Year 1999, substantial changes in
the information technology and budget environments have forced the Internal
Revenue Service (IRS) to shift its thinking and original assumptions. The Modernization Vision and Strategy (MV&S)
Program was developed to implement a fundamentally different approach to the
IRS modernization effort and to provide guidance in the development of an
integrated portfolio of information technology investments. The MV&S Program has improved the
information technology investment decision processes, resulting in information
technology projects that 1) better support the IRS goals of improving customer
service and enforcement, and 2) make better use of technology funds. However, process improvements need to be
implemented to ensure the continued improvement of future investment proposal
cost estimates and standardized reporting of investment decisions’ performance
measures.
WHY TIGTA DID THE AUDIT
This
audit was initiated to determine whether the IRS MV&S Program is achieving the desired results. Developed in October 2006, the MV&S
Plan is an annually updated 5-year plan for the governance and planning
processes for IRS information technology decisions. This approach leverages the IRS strategic
plan and associated business plans to drive information technology decisions,
address the priorities around modernizing front-line tax administration, and
enable technical capabilities provided by the information technology
infrastructure.
WHAT
TIGTA FOUND
Overall, the
MV&S Program processes
and procedures have been effectively implemented. For example, the MV&S Plan is updated
annually; strategic planning is effective; collaborative alliances have been
established; and focused, more frequent delivery of information technology
project releases is emphasized.
In
addition, the IRS is using an approved estimation model for determining total
cost of ownership. TIGTA determined that
the cost estimates for a sample of 4 of 23 projects in the approved investment
portfolio appear to be reasonable based on 1) the documentation provided, 2)
the validation of the estimates by employees with expertise in the area, and 3)
reviews by the team working on the proposed investments. However, IRS internal estimation guidance
does not require comparison of actual investment costs to the original
estimates. Therefore, the reliability of
estimated total costs of ownership might be at risk because the estimates for
prior projects were not validated by comparing the estimates to the actual
costs.
MV&S Program
performance measures are being collected, but there
is no standardized procedure for compiling and reporting these measures. Through review of documentation and
discussions with personnel, TIGTA could not determine whether performance
measurement and reporting were being thoroughly accomplished as required. The lack of MV&S Program performance
measures and reporting compliance could result in inefficient accomplishment of
strategic information technology acquisitions, objectives, and expectations.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Chief Information Officer 1) ensure
the reliability of the cost estimation process by implementing procedures to
compare actual project operations and maintenance costs to initial estimates
and revising the estimation process, if necessary, and 2) include guidelines for performance measurement and reporting
in the updated MV&S Plan.
In
their response to the report, IRS officials agreed with the recommendations and
plan to take appropriate corrective actions. The IRS plans
to implement procedures to compare
actual project operations and maintenance costs to initial estimates and revise
the estimation process when necessary. It also plans
to update the MV&S Plan to reference
performance measures and reporting and include this update in the Calendar Year
2009 annual publication.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2009reports/200920008fr.html.
Email Address: inquiries@tigta.treas.gov
Phone Number: 202-622-6500
Web Site:
http://www.tigta.gov