Implementing the Data Strategy Will Make System and Application Development More Efficient and Effective
February 19, 2009
Reference Number: 2009-20-022
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.
Phone Number | 202-622-6500
Email Address | inquiries@tigta.treas.gov
Web Site |
http://www.tigta.gov
February 19, 2009
MEMORANDUM FOR CHIEF TECHNOLOGY OFFICER
FROM: (for) Michael R. Phillips /s/ Michael E. McKenney
Deputy Inspector General for Audit
SUBJECT: Final Audit Report – Implementing the Data Strategy Will Make System and Application Development More Efficient and Effective (Audit # 200820007)
This report presents the results of our review of the
development and implementation of the Internal Revenue Service (IRS) Data
Strategy. The overall objective of this
review was to determine whether the IRS Data Strategy includes adequate
management and internal controls for its program and project plans. This review was part of our Fiscal Year 2008 Annual
Audit Plan for reviews of the IRS Modernization Program.[1]
Impact on the Taxpayer
The IRS is developing a Data Strategy that includes a
comprehensive plan for data collection, consolidation, storage, and
distribution. A comprehensive Data
Strategy is a key element in the IRS Modernization Program and is considered
one of the four “pillars of modernization,” along with the Modernized
Electronic Filing, Customer Account Data Engine, and Account Management
Services projects. Successful implementation
of these four “pillars” is essential to the support of all tax administration
activities and is critical to the long-term success of the Modernization
Program.
Synopsis
The Data Strategy is designed to provide standardized access to
official IRS data sources; eliminate redundant, inconsistent, and outdated data;
and provide guidance to identify and use data effectively and efficiently to
gather and manage taxpayer account information. The
Enterprise Data Access and Data Strategy Implementation Programs are the major
components of the Data Strategy. These Programs are in development, and projects related to
these Programs have been initiated and, in some cases, completed. We
reviewed the Integrated Production Model and the Metadata Repository portions
of the Data Strategy and found that these efforts are generally meeting their
objectives.
Although
the IRS has previously pursued efforts to achieve efficiency and consistency in
data management, the current Data Strategy is the first comprehensive effort since
the Modernization Program began.
While progress is being made, management needs to take further actions to develop and implement the goals of the Data Strategy. Since the Modernization Program began in 1999, the IRS has initiated nine efforts to achieve consistency in data management when developing and managing information technology systems. Although the IRS has previously pursued efforts to achieve efficiency and consistency in data management, the current Data Strategy is the first comprehensive effort since the Modernization Program began.
Obtaining adequate funding for the
current Data Strategy efforts has been a challenge for the Data Strategy
executives. The funding needs identified
by these executives were communicated to the potential users of the Data
Strategy efforts. Although specific
funding for the Data Strategy was not designated in the IRS budget, the
executives were able to obtain funding from the respective organizations that anticipate
using the capabilities. Without a
commitment to fully fund and implement the Data Strategy, the IRS will continue
to have redundant, inconsistent, and outdated data, making it difficult to
provide its customers and stakeholders with appropriate service and to
efficiently and effectively enforce the nation’s tax laws.
The IRS has not mandated that all
project development staffs coordinate data and application needs with the Modernization and Information Technology Services (MITS) organization
Data Strategy development team. Defining
and sharing the quantifiable benefits for using the Data Strategy would help
the various Modernization project teams understand the advantages and necessity
of employing the Data Strategy. However,
the Data Strategy team stated that it does not currently have cost details
quantifying the benefits it expects to provide.
The IRS has developed an Information Technology Modernization Vision and Strategy plan to help guide the Modernization Program, but it does not assign a priority for scheduling development and implementation. As of August 2008, the MITS organization had not established criteria to prioritize which IRS systems and data assets should be included in the Data Strategy and a schedule of when the systems and assets will be incorporated into IRS operations. This could lead to an ineffective and inefficient transition of the Data Strategy.
Recommendations
To facilitate complete implementation of the Data Strategy, we recommended that the Chief Technology Officer 1) work with IRS senior executives to consider the priority of the Data Strategy effort in relation to the MITS organization’s budget and provide the necessary funding so that it can be successfully implemented as an integral component of the Information Technology Modernization Vision and Strategy, 2) quantify and communicate the benefits that will be realized from implementation of the Data Strategy to promote the Data Strategy and justify funding through budget requests, and 3) develop a method to determine the priority for IRS systems and data assets to begin following the Data Strategy and when systems and data assets can be retired due to the Data Strategy.
Response
The IRS agreed with
our second and third recommendations but did not agree to implement our first
recommendation. The Data Strategy
Implementation Program Office will quantify its benefits, including those
derived from eliminating redundant storage, using the Modernization Vision and
Strategy costing model developed by the Enterprise Data Management Office. Further, the Data Strategy Implementation
Division within the Applications Development Division will analyze IRS systems
and data assets to develop a plan for determining a prioritization methodology
for systems and assets to be incorporated into the Data Strategy. While the IRS agreed with the spirit and intent
of our first recommendation to consider the priority of the Data Strategy
effort, IRS management does not plan to implement the recommendation because
they cannot agree to fund any one project without considering each year's
annual budget. Notwithstanding, it is
the IRS’ intent over the long term to move to a data-centric organization. Management’s complete response to the draft
report is included as Appendix VII.
Office of Audit Comment
The Data Strategy is
cited by the IRS as one of the “four pillars of modernization.” We understand IRS management’s position that
it cannot agree to fund any one project without considering the available
budget, but we continue to believe the IRS should place a high enough priority
on the Data Strategy that the project is considered for a relevant portion of
available funding. Without providing the
resources to secure this portion of the foundation, the Modernization effort is
weakened, potentially leading the Data Strategy to a partially completed goal.
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, Acting Assistant Inspector General for
Audit (Security and Information Technology Services), at (202) 622-8510.
Quantifying the Benefits
of the Data Strategy Will Strengthen the Commitment for Implementation
A Method to Include
Systems and Data Assets in the Data Strategy Should Be Developed
Appendices
Appendix
I – Detailed Objective, Scope, and Methodology
Appendix
II – Major Contributors to This Report
Appendix
III – Report Distribution List
Appendix
IV – Integrated Production Model Releases
Appendix
V – Internal Revenue Service Data Consistency and Efficiency Efforts
Appendix
VI – Glossary of Terms
Appendix
VII – Management’s Response to the Draft Report
Abbreviations
|
IRS |
Internal Revenue Service |
|
MITS |
Modernization and Information Technology
Services |
The Internal Revenue Service (IRS) is developing a Data Strategy
that includes a comprehensive plan for data collection, consolidation, storage,
and distribution. A comprehensive Data
Strategy is a key element in the IRS Modernization Program[2] and is considered one of the
four “pillars of modernization,” along with three projects at the heart of the
Modernization Program–the Modernized Electronic
Filing, Customer Account Data Engine, and Account Management Services
projects. Successful implementation of
these four “pillars” is essential to the support of all tax administration
activities and is critical to the long-term success of the Modernization
Program.
The IRS Information Technology Modernization Vision and
Strategy includes the goals for the Data Strategy:
·
Improve data quality to enable IRS management to make
data-based decisions.
·
Consolidate redundant data repositories.
·
Expose and enforce common data standards to a wider
audience.
·
Reduce point-to-point data transfers to enhance
processing efficiency between systems and applications.
The Data Strategy is designed to
provide standardized access to official IRS data sources; eliminate redundant,
inconsistent, and outdated data; and provide guidance to identify and use data
effectively and efficiently to gather and manage taxpayer account information. All of the IRS compliance activities rely on
tax return and account data to assist with workload selection. By improving the quality and accessibility of
the data, the IRS will be better equipped to enforce the nation’s tax laws and
instill confidence in its ability to make informed decisions.
The IRS
Modernization and Information Technology Services (MITS) organization is responsible for developing
and implementing the Data Strategy. Two
offices within the MITS organization are responsible for the Data
Strategy. The Enterprise Data Management
office’s mission is
to more easily and efficiently
organize, identify, share, reuse, and correlate data that enable the IRS business
operating divisions to use information and maximize its value to the IRS. The Data Strategy Implementation
office’s mission is to support the creation of an enterprise strategy for data
management, storage, and access and to develop and implement the data
repositories for both near-term and long-term business goals. In addition, the Small Business/Self-Employed
Division represents the needs of all IRS business operating divisions in
implementing the Data Strategy.
The
The Data Strategy
consists of two major programs–the Enterprise
Data Access Program and the Data
Strategy Implementation Program.
This review was performed at the MITS organization facilities in New Carrollton, Maryland, during the period May through November 2008. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. Detailed information on our audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
The Data Strategy Is Progressing Toward Information Technology Modernization Vision and Strategy Goals
The MITS organization’s plans for
the Data Strategy address the goals of the Information Technology Modernization
Vision and Strategy, and the MITS organization is making progress in achieving
those goals. The Enterprise Data Access and Data Strategy Implementation Programs are
in development, and projects related to these Programs have been initiated and,
in some cases, completed. Our
reviews of the Integrated Production Model and the Metadata Repository show
that these efforts are generally meeting their objectives.
While progress is
being made, management needs to take further actions to develop and implement
the goals of the Data Strategy.
Challenges facing MITS organization executives include gaining support
for implementing the Data Strategy throughout the IRS, obtaining adequate
funding to execute the related Data Strategy programs, and sustaining the
support to achieve the goals of the Information
Technology Modernization Vision
and Strategy.
The
Integrated Production Model is being developed to provide a consolidated
database of tax return and account data
The IRS is currently developing the
Integrated Production Model to provide all IRS business operating divisions
with a consolidated database of consistent tax return and taxpayer account data
that will allow the IRS to retire duplicative and costly data extracts. The Integrated Production Model will provide
access to core data that can be used for case identification, selection,
prioritization, and assignment.
The
Integrated Production Model will provide all IRS business operating divisions
with a consolidated database of consistent tax return and taxpayer account data
that will allow the IRS to retire duplicative and costly data extracts.
The Integrated Production Model
involves developing storage for and integrated access to data from various IRS files
systems or data sources. The Integrated
Production Model Releases 1.0 and 1.1 were implemented in September 2007 and
August 2008, respectively. Releases 2
and 3 were both officially cancelled in June 2008 after the IRS determined that
they were no longer needed because of hardware advancements and application
efficiencies. The Integrated Production
Model project team is currently developing Release 4.0, which is scheduled for
implementation in December 2008.
Releases 5 and 6 are scheduled to add remaining data sources in December
2009 and December 2010, respectively.
Appendix IV presents the status and capabilities of the Integrated
Production Model releases.
Reviews of Integrated Production
Model Releases 1.0, 1.1, and 4.0 documents showed that the project team
successfully implemented the following project management processes and
activities. The Integrated Production
Model team adequately:
·
Justified
the need for the project and reported planned funding.
·
Managed
its requirements.
·
Managed
its risks.
·
Planned
configuration management activities.
·
Planned
project quality and performance tracking and reporting activities.
Because the Integrated Production
Model adequately followed project management guidance established by the
Enterprise Life Cycle, work products and deliverables have met or are on
schedule to meet project goals.
The
Metadata Repository is standardizing the format and interpretation of data
A description of data (e.g., name, format, source) is
termed metadata. Metadata help users
locate, manage, understand, and use data by describing what data are available,
in which system they are located, what they mean, where they came from, how they
were processed, and how they are used.
IRS metadata are present in both the modernized and current processing environment
and systems.
The MITS organization is building an enterprise-wide
Metadata Repository that will be the official source for information about IRS
data. The Repository is using a
consistent vocabulary to categorize data and ensure a consistent meaning of the
data throughout the IRS. The Repository
is initially being populated with tax return and
taxpayer account data from the
Integrated Production Model. The
metadata collected from the various Integrated Production Model releases will contain
a majority of the metadata needed by the IRS.
The Metadata Repository currently resides on a Microsoft
Access database. A pilot is underway to test
the feasibility of using an IBM Information Server as a data management tool to
house the Metadata Repository and replace the Microsoft Access database. The MITS organization has built a
comprehensive framework into the IBM Information Server to include enterprise
data descriptions and data naming standards.
In addition, the core metadata from the Integrated Production Model
Releases 1.0 and 1.1 have been added to both the Access and IBM Metadata
Repositories. These Repositories will be
used concurrently until the plans to implement the IBM Information Server
repository become official.
In addition to testing the IBM Information Server for
housing and management of the Metadata Repository, the IRS is developing the
Repository policy and guidance documentation.
The MITS organization will develop and issue a Metadata Requirements
checklist to help ensure consistency in the use of data by project development
teams. This checklist, as well as the
Metadata Repository guidance, will be included in a Data Implementation Guide
that provides direction to ensure that current and future Modernization projects
adhere to the IRS Data Strategy.
Sustaining the Data Strategy Effort Will Allow for More Efficient and Effective System Development and Operations
The IRS has recognized the significance of a comprehensive
Data Strategy to achieving its Information
Technology Modernization Vision and Strategy and has previously
initiated work on several projects to achieve an enterprise Data Strategy. Since the Modernization Program began in
1999, the IRS has initiated nine efforts to achieve consistency in data
management when developing and managing information technology systems. Although the IRS has previously pursued
efforts to achieve efficiency and consistency in data management, the current
Data Strategy is the first comprehensive effort since the Modernization Program
began. Appendix V includes a list of the
IRS’ efforts to achieve data consistency and efficiency.
Obtaining
adequate funding for the current Data Strategy efforts has been a challenge for
the Data Strategy executives.
Obtaining adequate funding for
the current Data Strategy efforts has been a challenge for the Data Strategy
executives. The funding needs identified
by these executives were communicated to the potential users of the Data
Strategy efforts. Although specific
funding was not designated in the IRS budget to develop and deliver the
immediate efforts of the Data Strategy, the executives were able to obtain
funding from the respective organizations that anticipate using the capabilities.
Cost estimates to complete the two major programs in the Data Strategy are
significant:
·
The Enterprise Data Access Program business case shows
more than $8 million will be needed for
Budget Year 2009 and an additional $8 million will be needed for Budget Year
2010. The IRS plans to complete the Enterprise
Data Access Program in Budget Year 2011
with an estimated total cost of $50 million.
·
The Data Strategy Implementation Program business case
shows more than $9 million planned for
Budget Year 2009 and more than $12 million planned for Budget Year 2010. The Data Strategy Implementation Program has
an estimated cost of $130 million to complete over the next 7 years. However, the IRS withdrew the Data Strategy
Implementation Program business case, which was prepared to support the entire
Program. The IRS revised its approach
for this Program and decided instead to prepare business cases for the
individual projects. Currently, the IRS
is drafting a business case for the Enterprise Return Retrieval project, one of
the projects within the Data Strategy Implementation Program, for Budget Year
2010. Funding for this Program is
awaiting approval.
The goals of
the Data Strategy are to provide standardized access mechanisms to
authoritative data sources needed for processing tax accounts and IRS
compliance activities that rely on these data; eliminate redundant,
inconsistent, and outdated data; and provide data design guidance to support
the variety of Modernization projects being developed by the IRS. Without a
commitment to fully fund and implement the Data Strategy, the IRS will continue
to have redundant, inconsistent, and outdated data, making it difficult to
provide IRS customers and stakeholders with appropriate service and to
efficiently and effectively enforce the nation’s tax laws.
Recommendation
Recommendation 1: The Chief Technology Officer should work with IRS senior executives to consider the priority of the Data Strategy effort in relation to the MITS organization’s budget and provide the necessary funding so that the Data Strategy can be successfully implemented as an integral component of the Information Technology Modernization Vision and Strategy. The funding method needs to support the development, implementation, and maintenance of the Data Strategy as it facilitates and supports IRS data access.
Management’s
Response: The
IRS agreed with the spirit and intent of the
recommendation to consider the priority of the Data Strategy effort in relation
to the Modernization and Information Technology Services organization budget, but
stated that it did not agree to implement the recommendation to fund any one
project without considering each year’s annual budget. The actions taken to prioritize all
information technology demand with IRS senior leadership limits the Chief
Technology Officer’s ability to direct resources to specific development
projects. Priorities for the limited
information technology resources are driven through a service-wide priority
process. Notwithstanding, it is the IRS’
intent over the long term to move to a data-centric organization.
Office of Audit Comment: The Data Strategy is cited by the IRS as one
of the “four pillars of modernization.”
We understand IRS management’s position that it cannot agree to fund any
one project without considering the available budget, but we continue to
believe the IRS should place a high enough priority on the Data Strategy that
the project is considered for a relevant portion of available funding. Without providing the resources to secure
this portion of the foundation, the Modernization effort is weakened,
potentially leading the Data Strategy to a partially completed goal.
Quantifying the Benefits of the Data Strategy Will Strengthen the Commitment for Implementation
The Data Strategy team in the MITS organization has communicated the Data Strategy and the various components to all levels across the IRS. Efforts include meetings with the Deputy Commissioners; Business Systems Planning representatives; Chief Financial Officer, directors, and staff; Data and Other Common Services Executive Steering Committee managers; and Applications Development Division directors. These executives also provide an annual briefing to all of the business operating divisions’ Commissioners and Deputy Commissioners.
The Data
Strategy team has not attempted to quantify the benefits of the Data Strategy
because detailed data maintenance costs were not readily available.
The IRS has not mandated that all project development staffs coordinate data and application needs with the MITS organization Data Strategy development team. Rather, the Data Strategy team has generally taken a service approach by providing new projects with data and application development input upon request. The complementary approach by the Data Strategy team to release standardized universal data to drive project development is a goal that is envisioned but not yet practiced.
Defining and sharing the quantifiable
benefits of using the Data Strategy would help the various Modernization
project teams understand the advantages and necessity of employing the Data
Strategy. However, the Data Strategy team stated that it
does not currently have cost details quantifying the benefits it expects to
provide. For example, estimates of unnecessary
costs to maintain duplicate tax account information in the various IRS databases
have not been quantified.
The overall benefits of implementing the Data
Strategy and eliminating duplicative, inconsistent, and outdated data include
reducing:
Ÿ
Development costs for
each project to get its own data.
Ÿ
Time to deploy the
applications and their data.
Ÿ
Maintenance costs
to maintain duplicate data and technologies.
Ÿ
Burden to secure
and protect duplicate data.
The Clinger-Cohen Act of 1996[3] directs executive agency heads to
identify quantifiable measurements to determine the net system development investment
benefits and risks. Additional guidance in the Control
Objectives for Information and related Technology provides that the information technology function and
business stakeholders are responsible for ensuring that optimal value is
realized from project and service portfolios.
Also, stakeholders should be consulted to identify and control the total
costs and benefits within the context of the information technology strategic
and tactical plans. This process fosters
partnership between information technology and business stakeholders; enables
the effective and efficient use of information technology resources; and
provides transparency and accountability into the total cost of ownership, the
realization of business benefits, and the return on investment of information
technology-enabled investments.
Without determining the quantifiable benefits
of reducing or eliminating duplicative data within the IRS, the MITS
organization cannot appropriately promote and justify the commitment to implement
and follow the Data Strategy.
Recommendation
Recommendation
2:
The Chief Technology
Officer should quantify and communicate the benefits that will be realized from
implementing the Data Strategy, to be in a better position to promote the Data
Strategy and justify and receive funding through budget requests and MITS organization
governance directives.
Management’s Response: The IRS agreed with this recommendation. The Data Strategy Implementation Program Office will quantify its benefits, including those derived from eliminating redundant storage, using the Modernization Vision and Strategy costing model developed by the Enterprise Data Management Office. This process will only address new Modernization Vision and Strategy projects, as existing and non-Modernization Vision and Strategy projects are not subject to the costing model. For Modernization Vision and Strategy projects that already exist, the Data Strategy Implementation Program Office will quantify and extract the benefits from its budget.
A Method to Include Systems and Data Assets in the Data Strategy Should Be Developed
By
establishing criteria, the MITS organization can effectively prioritize which
IRS systems and data assets should be included in the Data Strategy and when to
retire systems and data assets no longer needed because of the Data Strategy.
The IRS has developed an Information Technology Modernization Vision and
Strategy, a 5-year plan that is updated annually and includes descriptions of projects
planned for development, but it does not assign a priority for scheduling
development and implementation. As of
August 2008, the MITS organization had not established criteria to
prioritize which IRS systems and data assets should be included in the Data
Strategy and a schedule of when the systems and assets will be incorporated
into IRS operations. In addition, it
had not established criteria to prioritize when systems and data assets can be retired when
they are no longer needed because of the Data Strategy.
When the Data Strategy was initiated, seven projects were identified for inclusion
in the Integrated Production Model portfolio. The MITS organization had determined that
these 7 projects used almost 90 percent of the types of taxpayer account data
managed throughout the IRS.
Since including the initial seven projects, the Data Strategy team has used
an approach of letting the project needs drive the Data Strategy. Also, managers wanted their projects to
become part of the Integrated Production Model portfolio as the source of their
data because the projects did not have funding to develop specific data sources. Criteria to prioritize and accept projects
into the Integrated Production Model portfolio have not yet been developed.
The Data Strategy effort is currently in the process
of streamlining data access as part of the Integrated Production Model. The Data Strategy team advised us that when
this initial effort is completed, it will have a better understanding of what
is involved in adding projects and will be able to develop a method to advance
the Data Strategy.
The
Clinger-Cohen Act directs executive agency heads to apply criteria when
considering whether to undertake a particular investment in information
systems, including the net, risk-adjusted return on investment and specific
quantitative and qualitative criteria for comparing and prioritizing
alternative information systems investment projects. The Control
Objectives for Information and related Technology provides that a framework needs
to be established and maintained to manage information technology-enabled
investment programs and to encompass cost, benefits, prioritization within
budget, a formal budgeting process, and management against the budget.
The Department of Defense Net Centric Data Strategy recognized the need to
prioritize the ordering of systems and data assets as part of its Data
Strategy. The prioritized list of data
assets provides a focus for near-term efforts to create and advertise metadata
and ensures that the data are available in shared space.
Without a method to prioritize IRS systems and data assets to become part
of the Data Strategy, the MITS organization might not sufficiently plan the
implementation of the Data Strategy. This
could lead to an ineffective and inefficient transition of the Data
Strategy. In addition, without a plan
for retiring IRS current production environment systems and data assets, the
IRS cannot fully realize the benefits of the Data Strategy. These benefits could be shown as a potential
cost savings that would further support obtaining funding for the Data
Strategy.
Recommendation
Recommendation 3: The Chief Technology Officer should develop a method to determine the
priority for IRS systems and data assets to begin following the Data Strategy and
when systems and data assets can be retired due to the Data Strategy.
Management’s Response: The IRS agreed with this recommendation. The Data Strategy Implementation Division within the Applications Development Division will analyze IRS systems and data assets to develop a plan for determining a prioritization methodology for these systems and assets to be incorporated into the Data Strategy.
Detailed Objective, Scope, and Methodology
The overall objective of this review was to determine whether the IRS Data Strategy includes adequate management and internal controls for its program and project plans. To accomplish our objective, we reviewed the two programs that drive the IRS’ Data Strategy–the Enterprise Data Access Program and the Data Strategy Implementation Program. In performing our review, we interviewed personnel in the MITS organization Enterprise Services and Applications Development Divisions and in the Small Business/Self-Employed Division working on the Data Strategy. Specifically, we:
I.
Determined whether
development and implementation of the Data Strategy included adequate planning
and coordination.
A.
Determined whether the Data Strategy being developed and
implemented is meeting the organizational goals and objectives.
1.
Reviewed the Information
Technology Modernization Vision and Strategy[4] to determine the intent of the completed Data Strategy.
2.
Reviewed the Exhibit
300 documents for the Enterprise Data Access Program and Data Strategy Implementation
Program to determine the planned Data Strategy.
B.
Determined whether best practices or lessons learned from
other IRS projects, government agencies, or private corporations were used to
help in the development of the IRS Data Strategy.
C. Determined whether the IRS Data Strategy effort included participation and commitment from the MITS organization and the business operating divisions to achieve an integrated Data Strategy.
II.
Determined the
adequacy of efforts to develop, share, and maintain the Metadata Repository by
reviewing the Metadata Project Plan to determine whether it included adequate
details for development of the Metadata Repository.
III. Determined whether the Integrated Production Model team followed established project management processes and activities to help ensure successful project development, deployment, and implementation. We determined whether the Integrated Production Model had adequate:
A. Justification.
B. Funding.
C. Identification and management of risks.
D. Identification and management of requirements.
E. Configuration management.
F. Project quality and performance tracking and reporting activities.
Appendix II
Major Contributors to This Report
Margaret E. Begg, Acting Assistant Inspector General for Audit (Security and Information Technology Services)
Scott A. Macfarlane, Director
Edward A. Neuwirth, Audit Manager
Beverly K. Tamanaha, Senior Auditor
Louis V. Zullo, Senior Auditor
Charlene L. Elliston, Auditor
Appendix III
Commissioner C
Office of the
Commissioner – Attn: Chief of Staff C
Deputy Commissioner for Operations Support OS
Deputy Commissioner for Services and Enforcement SE
Chief, Agency-Wide Shared Services OS:A
Chief Information Officer OS:CIO
Commissioner, Small Business/Self-Employed Division SE:S
Associate Chief Information Officer, Applications Development OS:CIO:AD
Associate Chief Information
Officer,
Director, Procurement OS:A:P
Director, Stakeholder Management OS:CIO:SM
Deputy Associate Chief Information Officer, Applications Development OS:CIO:AD
Deputy Associate Chief Information Officer, Business Integration OS:CIO:ES:BI
Deputy Associate Chief Information Officer, Systems Integration OS:CIO:ES:SI
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 Internal
Control OS:CFO:CPIC:IC
Audit Liaisons:
Commissioner, Small Business/Self-Employed Division SE:S
Associate Chief Information Officer, Applications Development OS:CIO:AD
Director,
Procurement OS:A:P
Director,
Program Oversight OS:CIO:SM:PO
Appendix IV
Integrated Production Model Releases
· Release 1 was implemented in September 2007 and contained data from the:
- Business Master File database and repository containing Business Master File entities, tax modules, entity transactions, tax return transactions, and tax return statuses.
- Business Returns Transaction File, which is a repository of the transcribed portion of the business returns.
- Combined Annual Wage Reporting file, which is a repository of wage-related documents received from the Social Security Administration.
· Release 1.1 loaded data from several files and sources in August 2008. These included Business Master File delinquency records, Employee Plans Master File delinquency records, Audit Information Management System data, zip code data, and aggregated Information Returns Master File data.
· Release 2.0 was cancelled by the IRS and the business customers; the Data and Other Common Services Executive Steering Committee approved this decision. The IRS no longer needs this Release because it is moving all project servers into the MITS organization’s operations, which resolved the need to control the servers.
· Release 3.0 was cancelled by the IRS, and the Tax Exempt and Government Entities Business Systems Planning Officer and the Data and Other Common Services Executive Steering Committee approved this decision. The intent of this Release was to prevent the Tax Exempt and Government Entities Division from having to create a duplicate database.
· Release 4.0 will add at least two new data sources, including the Individual Master File and the Individual Returns Transaction File. User requirements for this Release have been completed, and the Release is in the logical/physical design stage. Deployment is scheduled for December 2008.
· Release 5.0 will provide access to additional Individual Master File and Individual Returns Transaction File sources. Deployment is scheduled for December 2009.
· Release 6.0 will provide access to additional Business Master File and Business Returns Transaction File sources. Deployment is scheduled for December 2010.
Appendix V
Internal Revenue Service Data Consistency and Efficiency
Efforts
The following are the data consistency and efficiency efforts begun by the IRS since the Modernization Program[5] began in 1999 through Fiscal Year 2008.
|
Fiscal Year |
Effort Name |
Effort |
Cost |
Current Status of Effort |
|
2001 |
|
An enterprise-wide data warehouse of detailed data and data marts
designed to meet predictable strategic and tactical information needs. |
$96.2 million |
Was transformed into and renamed the Integrated Production Model in
Fiscal Year 2007. See Integrated
Production Model description below. |
|
2003 |
Modernized Data Access |
Software providing a single integrated approach for accessing current
processing environment data throughout the organization, with key data
infrastructure components that all modernization projects could share. This software would eliminate the need for
projects to develop their own databases
and contend with current processing environment complexities. |
$3 million |
Proof-of-concept prototype was completed in June 2003. |
|
2003 |
Treasury Inspector General for Tax
Administration Report, Adhering to Established Development Guidelines Will
Help to Ensure the Customer Account Data Engine Meets Expectations (Reference Number |
We recommended that the IRS ensure the development of job and file
naming standards to facilitate project development and limit additional costs
on future Customer Account Data Engine releases and other IRS modernization
projects. The
Chief Information Officer agreed with the recommendation to develop naming
standards. Key naming standards were
planned to be published and available for use by the current processing and
modernization environments by August 1, 2003. |
$35,000 |
Corrective
action completed October 1, 2003. |
|
2005 |
Submission and Settlement Harvesting
Project |
An initiative to identify business process redesign opportunities for
the submission and settlement aspects of electronic tax return processing,
allocate high-level business rules sets to modernized systems such as the
Customer Account Data Engine, and identify architectural alternatives such as
potential reuse of the current processing environment. |
Unknown |
Completed
December 14, 2005. |
|
2005 |
Modernized |
A project to allow returns electronically filed by large corporations
and tax-exempt organizations to be easily accessible to IRS staff and to fulfill
the IRS Commissioner’s commitment to use these electronic data in compliance
operations. |
$1.2 Million |
Completed its project capabilities in Fiscal
Year 2006. Planned capabilities to
view, print, and analyze electronically filed tax returns not delivered. |
|
2006 |
Extensible Markup Language Relational Database |
An initiative that provides customers in the Tax Exempt and
Government Entities Division with the electronically filed business returns in a relational format. |
$9.2 million |
Became operational in Fiscal
Year 2006. |
|
2006 |
Enterprise Return Retrieval |
A project to provide authorized IRS employees with the ability to
view and print images of electronically filed returns from their workstations
and to provide the Extensible Markup Language raw data for decision analytics
and |
$3.6 million |
Transformed from the Modernized |
|
2007 |
Integrated Production Model |
A consolidated
database of tax return and account data. |
$17.1 million |
Transformed from the |
|
2009 |
Metadata Repository |
Being developed to classify
and categorize IRS metadata independent of workflow and organizational
boundaries. It will be the
authoritative source for information about data. |
$358,000 |
In process. |
Source: MITS organization Enterprise Data Management and
Data Strategy Implementation offices.
Appendix VI
|
Term |
Definition |
|
Account
Management Services |
A project to
modernize the ability to collect, view, retrieve, and manage taxpayer
information. |
|
Audit
Information Management System |
A computer
system used by the Small Business/Self-Employed Division Examination Operations function and others to control
returns, input assessments/adjustments to the Master File, and provide
management reports. |
|
Business
Master File |
The IRS
database that consists of Federal tax-related transactions and accounts for
businesses. These include employment
taxes, income taxes on businesses, and excise taxes. |
|
Control Objectives for Information and related Technology |
A set of best practices (framework) for information technology management created by the Information Systems Audit and Control Association and the Information Technology Governance Institute in 1992. It provides managers, auditors, and information technology users with a set of generally accepted measures, indicators, processes, and best practices to assist them in maximizing the benefits derived through the use of information technology and in developing appropriate information technology governance and control in a company. |
|
Customer Account
Data Engine |
Consists of
databases and related applications that will replace the IRS’ official
repository of taxpayer information (the Master File) and provide the
foundation for managing taxpayer accounts to achieve the IRS modernization
vision. |
|
Data Mart |
Contains
customized and summarized data from the data warehouse and is tailored to
support the specific analytical requirements of a business unit or function. |
|
Employee Plans
Master File |
A file consisting of various types of pension, profit sharing, and tax-sheltered annuity plans. |
|
|
Addresses the key principles that affect the way that
projects create and use data. It
includes: data storage and management;
data modeling, categorization, and relevant subject areas; data access
standards and strategies; authoritative data definitions and guidelines; data
resources and technologies, including metadata and extensible markup
language; and data stewardship. |
|
|
A strategy to develop integrated data solutions and retire duplicate systems while maintaining the business functionality. |
|
|
A project intended to provide the abilities to view, print, and analyze electronically filed tax returns. |
|
Executive Steering
Committee |
Oversees
investments, including validating major investment business requirements and
ensuring that enabling technologies are defined, developed, and implemented. |
|
Exhibit 300 |
A
Capital Asset Plan and business case required by the Office of Management and
Budget. |
|
Extensible Markup
Language |
The universal format for structured
documents and data on the Internet. |
|
Individual
Master File |
The IRS database that maintains
transactions or records of individual tax accounts. |
|
Individual Returns Transaction File |
Contains
fields currently transcribed from U.S.
Individual Income Tax Return (Form 1040 and Form 1040A)
or Income Tax Return for Single and
Joint Filers With No Dependents (Form 1040EZ), and their accompanying
forms and schedules. The information
is obtained from the tax return as originally filed by the taxpayer, but can
reflect math error corrections. The
information is not updated to reflect amended returns or subsequent
adjustments. |
|
Information
Returns Master File |
A master file of current tax
year information returns and access to 6 prior years. |
|
Information Technology
Modernization Vision and Strategy |
Establishes a
5-year plan that drives investment decisions; addresses the priorities around
modernizing front-line tax administration and supporting technical
capabilities; and leverages existing systems (where possible) and new
development (where necessary) to optimize capacity, manage program costs, and
deliver business value on a more incremental and frequent basis. |
|
Infrastructure |
The fundamental structure of a system or organization. It is the basic, fundamental architecture of any system (electronic, mechanical, social, political, etc.) that determines how it functions and how flexible it is to meet future requirements. |
|
Integrated Production Model |
A consolidated
source of core taxpayer data (e.g., tax account, tax return, and third-party
data) and business application data to be used by a wide range of business
applications to support case identification, selection, prioritization, and
delivery. |
|
Metadata
Repository |
The
authoritative source for information about data. It serves as a centralized hub for
accessing metadata across the enterprise, providing a consistent and complete
view. |
|
Modernization
Program |
A program, which began in 1999, that is a complex
effort to modernize the IRS technology and related business processes. |
|
Modernized e-File |
A project that
develops the modernized, web-based platform for filing approximately 330 IRS
forms electronically, beginning with 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). The project serves to
streamline filing processes and reduce the costs associated with a
paper-based process. |
|
Net Centric |
The realization of a networked environment. |
|
Relational Database |
A database that captures data using common attributes found in the data set. |
|
Release |
A specific edition of software. |
|
Tax Gap |
The estimated difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. |
Appendix VII
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.
[1] See Appendix VI for a glossary of terms.
[2] See Appendix VI for a glossary of terms.
[3] Pub. L. No. 104-106, 110 Stat. 642 (codified in scattered sections of 5 U.S.C., 5 U.S.C. app., 10 U.S.C., 15 U.S.C., 16 U.S.C., 18 U.S.C., 22 U.S.C., 28 U.S.C., 29 U.S.C., 31 U.S.C., 38 U.S.C., 40 U.S.C., 41 U.S.C., 42 U.S.C., 44 U.S.C., 49 U.S.C., 50 U.S.C.).
[4] See Appendix VI for a glossary of terms.
[5] See Appendix VI for a glossary of terms.