Internal Revenue Service Diversity Demographics Compare Favorably With Other Federal Agencies’ Senior Executive Service Ranks
November 18, 2011
Reference Number: 2012-10-006
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
E-Mail Address | TIGTACommunications@tigta.treas.gov
Website |
http://www.tigta.gov
HIGHLIGHTS
INTERNAL REVENUE SERVICE DIVERSITY DEMOGRAPHICS
COMPARE FAVORABLY WITH OTHER FEDERAL AGENCIES’ SENIOR EXECUTIVE SERVICE RANKS
Highlights
Final
Report issued on November 18, 2011
Highlights of Reference Number: 2012-10-006 to the Internal Revenue Service Deputy Commissioner for Operations Support and Deputy
Commissioner for Services and Enforcement.
IMPACT ON TAXPAYERS
Diversity
and an inclusive work environment in the Federal Government’s leadership ranks
can be a key organizational component for executing agencies’ missions and can
yield greater engagement, productivity, and organizational performance. The IRS’s Senior Executive Service (SES)
diversity demographic statistics compare favorably with other Federal agencies’
SES ranks. When agencies recruit and
retain a representative leadership workforce, one that looks like the public
that it serves and the workforce it leads, they are enabled to better serve the
public.
WHY TIGTA DID THE AUDIT
This
audit was initiated to determine the level of diversity in IRS SES appointments
and whether the IRS has an effective strategy that complies with applicable law
and regulations to achieve diversity within executive positions. This review was included in our Fiscal Year 2009
Annual Audit Plan and addresses the major management challenge of Human Capital.
WHAT TIGTA FOUND
The IRS’s diversity demographic statistics compare
favorably with other Federal agencies’ SES ranks. For example, in Fiscal Year 2009, the IRS SES
level had a higher percentage of diversity in eight of 12 Office of Personnel Management
diversity categories. Also, three of the
other four diversity categories were underrepresented by less than 1 percent.
The
success the IRS has achieved in its SES diversity demographics is the result of
key diversity practices that have been integrated into business processes agency-wide,
as well as top level executive commitment and support, which have established a
culture that respects and values diversity.
However, TIGTA noted that these key practices were
not formally documented in the IRS’s Equity, Diversity, and Inclusion (EDI)
policies and procedures. TIGTA believes
memorializing the IRS’s key diversity practices in formal internal procedures
will help ensure that these practices continue to receive the level of
commitment that currently exists, in spite of retirements, attrition, or other
changes in the IRS’s top leadership ranks. In addition,
the IRS could benefit by expanding its outreach efforts to have a more specific
focus at the SES level by participating with professional executive
organizations.
WHAT TIGTA RECOMMENDED
TIGTA
recommended that the Deputy Commissioner for Operations Support and the Deputy
Commissioner for Services and Enforcement ensure key SES diversity practices are
memorialized within EDI internal guidance (policies and procedures). In addition, they should consider
partnering with Federal professional executive organizations and communicate
the existence of these organizations to employees.
IRS management agreed with our recommendations. The IRS Human Capital Office and the Office
of EDI plan to review existing written policies and revise them, if necessary,
to ensure these documents accurately capture current practices. In addition, the IRS plans to partner with
external executive and professional organizations and communicate this information
to all employees.
November 18, 2011
MEMORANDUM FOR DEPUTY COMMISSIONER FOR OPERATIONS SUPPORT DEPUTY COMMISSIONER FOR SERVICES AND ENFORCEMENT
FROM: Michael R. Phillips /s/ Michael R. Phillips
Deputy Inspector General for Audit
SUBJECT: Final Audit Report – Internal Revenue Service Diversity Demographics Compare Favorably With Other Federal Agencies’ Senior Executive Service Ranks (Audit # 200910003)
This report presents the results of our review to determine the level of diversity in the Internal Revenue Service (IRS) Senior Executive Service appointments and whether the IRS has an effective strategy that complies with applicable laws and regulations to achieve diversity within executive positions. This audit was conducted as a part of our Fiscal Year 2009 Annual Audit Plan and addresses the major management challenge of Human Capital.
Management’s complete response to the draft report is included as Appendix IV.
Copies of this report are also being sent to
the Internal Revenue Service managers affected by the report recommendations. Please contact me at (202) 622-6510 if you
have questions or
Nancy A. Nakamura,
Assistant Inspector General for Audit (Management Services and Exempt
Organizations), at (202) 622-8500.
Appendices
Appendix
I – Detailed Objective, Scope, and Methodology
Appendix
II – Major Contributors to This Report
Appendix
III – Report Distribution List
Appendix
IV – Management’s Response to the Draft Report
Abbreviations
|
CDP |
Candidate Development Program |
|
EDI |
Equity, Diversity and Inclusion |
|
EEO |
Equal Employment Opportunity |
|
ERB |
Executive Resources Board |
|
FY |
Fiscal Year |
|
HCO |
Human Capital Office |
|
IRS |
Internal Revenue Service |
|
MD-715 |
Management Directive 715 |
|
OPM |
Office of Personnel Management |
|
SES |
Senior Executive Service |
The Internal Revenue Service
(IRS), along with the rest of the Federal Government, is facing new and more
complex challenges in the 21st Century because of long-term fiscal
constraints, changing demographics, preparation for an increased number of retirements,
and other factors. Senior Executive
Service (SES)[1] members are critical to providing the strategic leadership
needed to effectively meet these challenges. In Calendar Year 2010, the IRS had more than 250
SES appointments, of which approximately 62 percent are eligible to retire
within the next three fiscal years.[2] Diversity and an
inclusive work environment in the Federal Government’s leadership ranks can be
a key organizational component for executing the agencies’ missions and can
yield greater engagement, productivity, and organizational performance.
Historically, Federal diversity
initiatives have focused on equal employment opportunity (EEO)[3] and affirmative employment.[4] EEO, by law and
statute, exists both in the public and private sectors to ensure that all
persons are afforded equal opportunity in personnel procedures and decisions
affecting them in the workplace.
However, diversity, while not mandated by law and not punishable when
neglected or overlooked, is both desirable and critical if an employer wishes
to benefit from the many skills, life experiences, and unique natures that each
person brings to the workplace.
Diversity now means different things to different Federal agencies,
organizations, and people and can encompass the mindset and climate of an
organization. The IRS defines diversity
as:
The collective mixture of differences and similarities
employees and customers possess.
Generally, the differences we recognize first about each other are race,
gender, and age. Diversity goes beyond
those obvious differences to recognize other differences among us such as
mental/physical abilities, religious beliefs, sexual orientation, thinking
style, geographical location, education, functional area, and personality type,
as well as similarities.
The business case[5] for leveraging diversity has two significant
elements. First, the labor and talent
market has become increasingly competitive.
The IRS must use every available source of potential applicants to
ensure it has the high-quality workforce that it needs to deliver its mission
to the taxpayer. If the IRS fails to
take steps to recruit among the full range of the diverse labor market, it is
missing a strategic opportunity. Second,
the changing demographics of America mean that taxpayers served by the IRS are
also changing. When agencies recruit and
retain a representative workforce, one that looks like the public that it
serves, and when individual differences are respected, appreciated, and valued,
diversity becomes an organizational strength that contributes to achieving
mission performance and results. Diversity
also enables the IRS to better serve the taxpayer by reflecting the customers
and communities it serves.
Federal laws govern
the employment practices of qualified entities in the consideration of
diversity. Title VII of the Civil
Rights Act of 1964[6] generally makes it unlawful
to discriminate in matters of employment based on race, color, national
origin, sex, and religion. Additionally, preferential treatment is not to
be granted due to existing underrepresentation within an organization. The IRS must abide by the requirements of Title
VII in the development and operation of its training and employment practices. In addition, the IRS is required by the EEO
Commission Management Directive 715 (MD-715)[7] to report annually on the status of
activities undertaken pursuant to its EEO program. The annual IRS MD-715 report must also
include a plan that sets forth steps the IRS will take in the future to correct
deficiencies or further improve efforts undertaken pursuant to the
directive.
The Executive Resources
Board (ERB) is responsible for all executive
resources and establishes all IRS policies associated with career appointments
related to SES and Senior-Level[8] positions. ERB members are appointed by the IRS
Commissioner and are accountable to the Commissioner through the ERB
Chairman. The ERB meets monthly and
discusses issues related to identifying interview panels and selecting Candidate
Development Program (CDP)[9] applicants, filling SES vacancies, and monitoring the
mobility of SES appointments. The ERB
collectively makes decisions on the outcome of these events.
To gain
an understanding of the overall IRS organizational posture toward diversity (staff, feeder group,[10] and SES levels),
we met with the Deputy Commissioners for Operations Support and Services and
Enforcement and interviewed some business unit Commissioners (Small
Business/ Self-Employed Division, Wage and Investment Division, and Large
Business and International Division),
the Chief Technology Officer, the IRS Human Capital Officer, the IRS ERB Chairman,
and the Executive Director of the Office of Equity, Diversity, and
Inclusion (EDI).
To determine how the IRS is
currently positioned in terms of a diverse SES cadre, we evaluated the IRS SES
workforce against the 12 diversity demographic categories that the Office of
Personnel Management (OPM) tracks for the Federal Government workforce. We were unable to compare any other diversity
aspects outside of race, gender, and disability because the statistical data
OPM tracks and provided to us did not include any other diversity aspects.
This review was performed at
various program offices in Washington, D.C., within the National Headquarters
of the IRS Human Capital Office (HCO); the Office of Equity, Diversity, and
Inclusion; the Modernization and Information Technology Services organization;
and the Large Business and International, Small Business/Self-Employed, and Wage
and Investment Divisions. In addition,
this review was performed in the Wage and Investment Division program office
located in Atlanta, Georgia. We conducted this performance audit during the
period November 2009 through August 2011 and performed it 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 IRS’s diversity demographic statistics compare favorably with other Federal agencies’ SES ranks. For example, in Fiscal Year (FY) 2009, the IRS SES level had a higher percentage of diversity in eight of 12 Office of Personnel Management diversity categories. Also, three of the other four diversity categories were underrepresented by less than 1 percent. The success the IRS has achieved in its SES diversity demographics is the result of key diversity practices that have been integrated into business processes agency-wide, as well as top level executive commitment and support, which have established a culture that respects and values diversity. However, we noted that the IRS Office of EDI does not have formal policies and procedures that document these practices. Finally, the IRS could benefit by expanding its outreach efforts to have a more specific focus at the SES level by participating with professional executive organizations.
The Internal Revenue Service’s Senior Executive Service Demographics Compare Favorably With Other Federal Agencies
We reviewed OPM data on diversity categories
to compare several demographic factors (workforce categories) to evaluate
diversity at the IRS SES level. Based on
the data in Figure 1 below, the IRS is exceeding the Federal Government as a
whole in placing more females in executive positions at the SES level.
Figure 1: Gender Comparison of Federal SES and IRS SES
Workforce for Fiscal Year 2009
Figure 1 was
removed due to its size. To see Figure 1, please go to the Adobe PDF version of the report
on the TIGTA Public Web Page.
Figure 2 and Figure 3 below show
the demographic comparisons of the Federal SES to the IRS SES levels for FY
2004 and FY 2009, respectively. Looking
at Figure 2 and Figure 3 together, we identified changes that have occurred in
the demographic groups over the six-year period. For example, the IRS SES level has increased
from seven of 12 OPM diversity categories having a higher percentage of
diversity than the Federal SES in FY 2004 to eight of 12 OPM diversity
categories in FY 2009. In addition, three
of the other four diversity categories in FY 2009 were underrepresented by less
than 1 percent in comparison with the other Federal agencies’ SES ranks.
Figure 2: Demographic Comparison of Federal SES
and IRS SES Workforce for Fiscal Year 2004
Figure 2 was removed due to its size. To see Figure 2, please go
to the Adobe PDF version of the report on the TIGTA Public Web Page.
|
FY 2004 |
Total |
WM |
WF |
BM |
BF |
HM |
HF |
AM |
AF |
NM |
NF |
TDM |
TDF |
|
IRS SES Level |
274 |
50.4 |
28.1 |
9.8 |
4.7 |
2.2 |
0.4 |
2.2 |
1.1 |
0.0 |
0.7 |
0.0 |
0.4 |
|
FED SES Level |
7,093 |
63.3 |
21.5 |
4.8 |
3.3 |
2.4 |
0.9 |
1.4 |
0.7 |
0.9 |
0.4 |
0.3 |
0.1 |
|
IRS Above FED
SES |
X |
X |
X |
X |
X |
X |
X |
||||||
|
IRS Below FED
SES |
X |
X |
X |
X |
X |
Source: Federal data – Office of Personnel Management –
FY 2004 Federal Equal Opportunity Recruitment Program. IRS data – IRS Employee
Master Database.
Legend:
WM – White Male, WF – White Female AM
– Asian/Pacific Male, AF – Asian/Pacific Female
BM – Black Male, BF – Black Female NM – Native American Male, NF –
Native American Female
HM – Hispanic Male, HF – Hispanic Female TDM – Targeted Disabled Male, TDF – Targeted
Disabled Female
Figure 3: Demographic Comparison of Federal SES and IRS
SES Workforce for Fiscal Year 2009
Figure 3 was removed due to its size. To see Figure 3, please go
to the Adobe PDF version of the report on the TIGTA Public Web Page.
|
FY 2009 |
Total |
WM |
WF |
BM |
BF |
HM |
HF |
AM |
AF |
NM |
NF |
TDM |
TDF |
|
IRS SES
Level |
252 |
40.8 |
34.1 |
9.1 |
5.6 |
2.8 |
2.0 |
3.2 |
1.6 |
0.0 |
0.4 |
0.0 |
0.4 |
|
FED SES
Level |
7,726 |
58.6 |
24.1 |
5.0 |
4.0 |
2.7 |
1.0 |
1.7 |
1.1 |
0.8 |
0.5 |
0.4 |
0.1 |
|
IRS above
FED SES |
X |
X |
X |
X |
X |
X |
X |
X |
|||||
|
IRS below
FED SES |
X |
X |
X |
X |
Source: Federal data – Office of Personnel Management
– FY 2009 Federal Equal Opportunity Recruitment Program. IRS data – IRS Employee
Master Database.
Comparing Figure 2 with Figure 3,
the demographic group percentages for Native American Male and Targeted
Disabled Male have not improved. In
addition, over the six-year period, the number of IRS SES-level majority
demographic White Male has decreased from 50.4 percent in FY 2004 to 40.8
percent in FY 2009. This represents a
decrease of approximately 10 percent in White Males at the IRS SES level. In contrast, the number of majority
demographic White Males at the Federal SES level decreased from 63.3 percent in
FY 2004 to 58.6 percent in FY 2009. This
represents a decrease of 4.7 percent in White Males at the Federal SES
level. As a result of the significant
decrease in the percentage of White Males at the IRS SES level, there has been
an overall increase in the IRS’s other demographic categories at the SES level
compared with the Federal Government as a whole.
Senior Executive Service Diversity Demographic Achievements Are the Result of the Integration of Diversity Practices Into Business Processes Agency-Wide and Top Level Support
The success the IRS has
achieved in its SES diversity demographics are the result of diversity practices
that have been integrated into business processes agency-wide and top level executive
commitment and support. When viewed
collectively, the IRS has undertaken a broad approach to diversity designed to
achieve a workforce that represents the taxpayers that it serves and to
recognize the importance of diversity in the IRS’s business goals and
objectives.
The IRS
has instituted several key practices that have contributed to the IRS’s
progress in and achievement of higher percentages of SES diversity in many of
the OPM demographic categories and in establishing a culture that respects and
values diversity within the workforce.
These practices include:
·
Cultivating
a diverse workforce. The
IRS believes that in order to accomplish its mission, the IRS must cultivate the
workforce of tomorrow, in part by providing a working environment characterized
by equity, diversity, and inclusion. The
IRS sees the diversity of its workforce as a business imperative that is woven
into the culture and structure of the organization. In addition, the IRS Strategic Plan 2009–2013 includes diversity
as an essential element in building a robust workforce.
·
Diversity
strategic planning. The
IRS believes that a comprehensive diversity strategy must continually examine
and work towards greater diversity at all organizational levels to impact
diversity at the SES level. The IRS
believes that if it strives for diversity at the staff entry level, it should
carry through as the staff progress and reach the feeder group level and should
result in a diverse group of applicants within the IRS from which to select for
executive initiatives. The IRS’s efforts
to achieve a diverse feeder pool[11] for
its various leadership programs[12] and
SES level positions focus on outreach and recruitment to diversify the
applicant pool, maintaining a selection process that ensures equal employment
opportunity by not making demographic-based decisions, and using an objective
methodology for rating, ranking, and interviewing applicants for leadership
programs and developmental assignments.
·
Top level
commitment, involvement, and accountability. The IRS’s diversity strategy has the support
of the IRS Commissioner and business unit executives. For example, the Commissioner’s annual EEO
Policy statement asserts:
I am convinced that the unique attributes of
each employee offer incalculable benefits to our organization. Therefore, I am committed to not only creating
a working environment that is free from discrimination and other barriers to
full participation, but also welcomes people from all backgrounds, and reflects
the taxpaying public we serve. Join me
in these efforts to further our objective to make the IRS the best place to
work in government.
The Office of EDI
oversees the collection and tracking of the IRS’s progress toward diversity at
all grade levels and this information is reported in the annual MD-715
report. Each business unit within IRS
has an EDI business unit director that reports directly to their respective
chief or commissioner. EDI business unit
directors primarily work on EEO and diversity related activities within the
business unit and prepare the annual MD‑715 report submission for their
business unit for inclusion in the IRS MD-715 report.
In addition, the
Office of EDI has established monthly “contributor meetings”[14] among the various EDI and HCO units that perform related work to
increase accountability and to ensure a cohesive, consistent corporate approach
to the IRS’s efforts and activities pertaining to the MD-715. The monthly meetings are used to provide guidance
and coordination, share best practices, and ensure consistent reporting.
Historical view of
diversity initiatives
Prior to FY 2009, the IRS placed more emphasis
on EEO compliance (assuring that discrimination based on race, age, gender, and
disability does not occur) and properly reporting on EEO Commission initiatives
through MD-715 than it placed on achieving a diverse workforce. However, in August 2009, the IRS began its
initiative to address the absence of a diversity strategic plan and committed
resources to its diversity efforts with the selection of a permanent Executive
Director for the Office of EDI and the filling of staff vacancies within that
office. The Office of EDI establishes
the strategic diversity direction for the IRS, including the SES level, and the
Director, EDI, is responsible for ensuring IRS-wide consistency in implementing
the IRS diversity initiatives. The
Office of EDI also develops diversity policy and approaches to attract,
develop, and retain a talented diverse workforce and ensure diversity is
infused within leadership succession, recruitment and retention initiatives,
and leadership development programs.
In early FY 2010, the Office of EDI drafted
the IRS’s first EDI Strategic Plan for FY 2010–2015 with the intention to
parallel the OPM’s Federal Government‑wide Diversity Strategic Plan. However, toward the end of FY 2010, OPM had
not yet issued its plan, so the IRS issued the EDI Strategic Plan on September
16, 2010, which addresses diversity across the IRS. The EDI Strategic Plan was developed
corporately by members of the EDI community, business unit executives, the IRS
HCO, and General Legal Services.[15]
Within the EDI Strategic Plan, the IRS has
outlined several planned strategies at the SES level that align with one of its
corporate priorities, which is to attain diverse representation at the SES
level. For example, within goal one of
the strategic plan, the Office of EDI plans to:
The IRS FY 2009 MD-715 report discussed two
triggers:[16] (1) low participation rates of
persons with targeted disabilities, as compared to the EEO Commission’s Federal
goal of 2 percent, and (2) low participation rates of Hispanic males, as
compared to the civilian labor force. We
evaluated the IRS FY 2009 MD-715 report and, while it addressed the two underrepresented
categories listed above, it included only one action plan that addressed
underrepresentation at the SES level, specifically a plan to eliminate
underrepresentation of Hispanic males. The IRS explained that the balance of its
underrepresented groups (e.g., persons with a targeted disability) would
be met if only one or two employees in this category were hired or promoted to
the SES level, thus the development of action plans within the MD-715 are
focused on the most significant areas of underrepresentation. Therefore, specific actions plans for persons
with targeted disabilities at the SES were not included in the FY 2009 MD-715
report.
Business unit
diversity initiatives
The
business unit Commissioners shared with us their individual perspective,
approach, and commitment to ensure diversity agency‑wide. They also shared some of the ongoing
diversity initiatives they have underway within their business units.
SES
level:
·
The Wage
and Investment Division, Small Business/Self-Employed Division, and
Modernization and Information Technology Services organization have established
individual ERBs that provide a forum to address diversity in the respective
business units.
·
The Wage
and Investment Division performed a diversity assessment in its Senior
Management Readiness program and established an awards program that recognizes
outstanding achievement in EEO and diversity.
·
The Wage
and Investment Division, Small Business/Self-Employed Division, Large Business
and International Division, and Modernization and Information Technology
Services organization include the unit’s EEO and Diversity Director at some or
all of the unit ERB meetings to provide information such as current workforce
demographic data.
Organization
wide:
·
The Large
Business and International Division instituted a diversity council whose goal
is to identify strategic trends and issues related to EEO, diversity, and
inclusion.
·
The Modernization
and Information Technology Services organization had a diversity study
performed by an outside consulting firm.
An assessment of the historical and contemporary working conditions
along with recommendations was made for the entire organization.
·
The Small
Business/Self-Employed Division created a diversity and EEO advisory committee that
identifies issues, trends, and actions to encourage and support an inclusive
and diverse workforce.
The IRS has devoted significant efforts to
develop a culture that embraces diversity at all levels. In addition, since FY 2009, the IRS has been developing
and implementing diversity practices discussed above in order to implement the
EDI strategic plan.[17] We believe memorializing the
IRS’s key diversity practices in formal internal procedures will help ensure they
continue to receive the level of commitment that currently exists, in spite of
retirements, attrition, or other changes in the IRS’s top leadership
ranks. If the level of commitment and
accountability at the top levels were to lessen or to focus on different
issues, the progress on diversity initiatives may experience delays. For example, if a decision was made in the
future to change the quarterly Business Process Review or MD-715 progress
reports to semiannual or annual progress reports, or if the Director, EDI, no
longer reported to the IRS Commissioner or was no longer a voting member on the
various executive boards, the ability of the Office of EDI to drive diversity
efforts across the IRS would be lessened.
Other Federal agencies who may want to adopt some of the IRS’s diversity
practices to improve diversity in their SES or feeder pool levels would need to
ensure they adopted the key elements that support and build on the other
elements. For example, if other agencies
developed an EDI Strategic Plan but did not have quarterly reporting to the Office
of EDI Director on the progress of the various diversity initiatives or did not
have the accountability at the Deputy Commissioner level, they may not achieve
the level of progress that the IRS has achieved in its SES diversity.
Management Actions:
During the conduct of our audit, the IRS
advised us of additional diversity efforts it had begun which address several
of the observations we made. For
example, the IRS’s FY 2010 MD-715 report issued in February 2011 includes an
objective to increase the diversity of the SES so that it is reflective of the
workforce it leads by ensuring that:
·
Transparency
exists in SES selections.
·
The IRS
engages in long-term succession planning that incorporates diversity management
as a guiding principle.
·
The IRS
creates clear benchmarks for diverse outreach and recruitment strategies to
attract a highly qualified candidate pool to the SES and feeder groups.
·
The IRS
creates a comprehensive strategy to recruit and retain persons with targeted
disabilities at all levels of leadership.
·
Factors
such as work-life balance and unconscious bias are not impeding the rise of
qualified women to the executive level.
Recommendation
Recommendation 1: The Deputy Commissioner for Operations Support and the Deputy Commissioner for Services and Enforcement should ensure that the IRS’s key diversity practices are memorialized within EDI internal guidance (policies and procedures).
Management’s Response: The IRS Human Capital
Office and the Office of EDI will partner to review existing written policies
and revise them, if necessary, to ensure these documents accurately capture
current practices.
The Internal Revenue Service Can
Leverage Efforts in Promoting Diversity at the Senior Executive Service Level
by Partnering With Professional Executive Organizations
Partnering with professional executive organizations could help enhance diversity at the SES level within the IRS. The current IRS executive outreach practices with professional organizations have been focused on participating at the Internal Annual Conferences of agency‑wide employee organizations (such as the Association for the Improvement of Minorities, Asian Pacific American IRS Employees, Hispanic IRS Employees, the IRS Deaf
Empowerment and Advocacy Forum, and the Visually Impaired Employees Workforce).[18] These conferences involve all levels of employees and have been used as a platform to promote diversity, help employees address challenges in progressing up their career ladder, and increase the amount of interest of those aspiring to reach the senior management and SES levels. Although the IRS has focused its attention on diversity outreach practices agency-wide, the IRS could benefit by expanding these efforts to have a more specific focus at the SES level by participating with professional executive organizations.
We spoke to representatives of several Federal Government executive organizations[19] to discuss some of the efforts those organizations are making to assist their members in becoming executives, and also to get their perspective on how well the Federal Government is promoting a diverse workforce. These organizations have established partnerships with Federal agencies where their members are invited to agency events to discuss the organization’s progress in establishing relationships with Federal agencies, activities associated with their mentoring program, and diversity issues faced by their members. Representatives of these organizations told us Federal agencies face several challenges in promoting diversity.
First, they were concerned with how Federal agencies define diversity within each agency, stating that Federal agencies need to think more robustly about diversity than in just racial and/or ethnic terms. The results of this audit show that the IRS already thinks of diversity in comprehensive terms.
A second challenge identified by the executive organization representatives is that Federal agencies need to simplify hiring processes by reducing the time it takes to select and bring a new executive on board. A representative stated that in many cases, it has taken up to one year before a qualified candidate is hired. Top-level executive prospects generally will not be able to wait long periods of time when deciding whether to accept a job offer. Further, a concern that these executive organizations have with Federal agencies is the lack of accountability to ensure that diversity efforts are measured and enforced. For example, one representative stated that Federal agencies should ensure that managers are held accountable for promoting diversity and those who encourage diversity efforts should be recognized through performance ratings and bonuses.
The IRS could benefit from expanding its participation with professional executive organizations. Because these are executive-level organizations, they may provide a broader focus and exposure for executive-level applicants. For example, these voluntary organizations offer services from mentoring members who aspire to become executives to hosting conferences and seminars that provide current and future Federal executives with updated skills and information needed for effective and efficient leadership in the Federal Government.
The IRS HCO should take the opportunity to advise employees of the existence of the various professional executive organizations. Interested employees could then determine whether these organizations could assist in their self-development efforts toward the SES level. In addition, if the IRS expanded its relationships with professional executive organizations, it could create opportunities for the IRS to recruit external diverse applicants into the IRS’s executive recruitment initiatives, thereby further expanding its diverse applicant pool. Finally, expanding its relationships with professional executive organizations would allow the IRS to gain additional insight on the diversity issues confronting the executive community.
Recommendations
Recommendation 2: The Deputy Commissioner for Operations Support and the Deputy Commissioner for Services and Enforcement should consider partnering with Federal professional executive organizations to gain additional insight on diversity issues in the Federal executive community, identify mentoring practices, and use these partnerships as a tool to recruit executive applicants.
Management’s Response: The IRS concurs with this
recommendation that partnering with external stakeholders like professional
organizations is a good practice and will continue to foster existing
partnerships and begin new ones with these types of organizations. The IRS stated that on September 27, 2011, it reached out to five
Federal Executive Associations and plans to extend its efforts to an additional
40 executive and professional associations in FY 2012.
Recommendation 3: The IRS Human Capital Office should consider ways to communicate to employees the existence of professional executive organizations that may assist employees in their self-development efforts toward higher level and SES positions.
Management’s Response: The IRS will communicate to all employees about the external organization with which it partners. The communication will include links to various external organizations to promote increased awareness.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to determine the level of diversity in the IRS SES appointments and whether the IRS has an effective strategy that complies with applicable laws and regulations to achieve diversity within executive positions. To accomplish our objective, we:
I. Identified and summarized all applicable guidance, standards, and procedures regarding SES diversity and determined whether the IRS’s strategy was compliant.
A. Identified and summarized all applicable IRS and Government-wide policies, procedures, and requirements the IRS is required to comply with regarding SES diversity.
B. Determined whether the IRS’s strategy is compliant with all applicable guidance and standards.
II. Determined the purpose of the ERB and whether it ensures diversity is achieved at the SES level.
A. Interviewed key representatives of the ERB and:
1. Determined the roles and responsibilities of the ERB.
2. Determined how the board defines diversity and how it is applied in its SES and senior-level recruiting strategy.
3. Determined the recruiting and selection process for CDP and SES appointments.
(a) Determined who on the board is involved with the recruiting process.
(b) Obtained a copy of the recruiting and selection procedures for CDP and SES appointments and determined their impact on diversity.
(c) Determined whether the recruitment and selection processes are compliant with the policy of the IRS Office of Civil Rights, Diversity, and EEO.
(d) Determined the ERB’s outreach efforts to promote and encourage diversity in the CDP.
4. Determined whether the ERB has a strategic plan for SES initiatives.
5. Determined whether there are specific criteria to prioritize diversity issues to be placed on the agenda and discussed at the ERB meetings.
B. Obtained agendas and key decisions made as they relate to diversity and determined how often diversity is discussed and what decisions have been made at the ERB meetings.
C. Identified the number of SES appointments that will be eligible to retire within the next three years.
III. Determined the role of the IRS Human Capital Officer in ensuring diversity at the SES level.
A. Interviewed the IRS Human Capital Officer and determined the HCO’s role and responsibility for assisting the IRS in ensuring diversity at the SES level.
B. Obtained and reviewed policies, guidance, publicity, or other documents issued by the HCO to carry out its role and responsibility.
C. Determined whether the IRS Human Capital Officer provides any input to the annual MD-715 report.
IV. Determined the purpose of the IRS Headquarters Office of EDI and the headquarters EEO and Diversity Director and how they are providing oversight at the SES level to ensure diversity.
A. Interviewed the IRS Executive Director, Headquarters Office of EDI, and determined the process used to solicit information to be included in the annual MD-715 report. We also determined whether the Office of EDI solicits information from the ERB for the annual MD-715 report regarding barriers associated with SES initiatives.
B. Interviewed the headquarters EEO and Diversity Director and determined:
1. The level of involvement with SES initiatives.
2. The interaction between the headquarters EEO and Diversity Director and the embedded business unit EEO and Diversity Directors.
3. The type of outreach conducted to attract potential applicants into the executive development programs (i.e., CDP).
4. Whether the embedded business unit EEO and Diversity Directors’ input to the annual MD-715 report includes identifying barriers related to SES initiatives.
C. Determined the roles and responsibilities of the headquarters EEO and Diversity Director as they relate to ensuring diversity at the SES level.
D. Selected and interviewed three embedded business unit EEO and Diversity Directors (Modernization and Information Technology Services organization, Small Business/Self-Employed Division, and Wage and Investment Division) and determined the level of their involvement with SES initiatives and diversity at the SES level.
V. Determined whether the IRS’s strategy is effective in tracking its progress in achieving SES diversity initiatives.
A. Interviewed key representatives of the ERB and determined whether:
1. The ERB has established a tracking methodology to develop and assess its SES diversity initiatives.
2. The ERB has developed and implemented policies and procedures that are consistent in providing oversight and accountability over its SES initiatives and whether such policies and procedures are consistent with the ERB’s strategy to promote diversity in its SES program.
B. Determined whether the ERB has identified certain benchmarking standards consistent with average statistics related to other Federal agencies by race, gender, age, and targeted disabilities[20] to ensure fair and equal representation in the SES ranks.
C. Contacted the HCO and obtained statistical information from FY 2004 through FY 2009 on the IRS’s SES and feeder groups’ demographic make-up by race, gender, and targeted disabilities. We reviewed these reports and performed a comparative analysis with the United States workforce statistics and determined whether there are any significant trends.
D. Contacted the OPM and obtained statistical information from FY 2004 through FY 2009 on other Federal agencies’ SES demographic make-up by race, gender, and targeted disabilities. We reviewed these reports and performed a comparative analysis with IRS statistics and determined whether there are any significant trends.
VI. Determined the progress of the IRS strategy to eliminate barriers related to diverse underrepresentation in its developmental programs and SES appointments.
A. Interviewed key representatives of the ERB and determined whether the ERB reports on SES initiatives in the annual MD-715 report, the reporting process, and the initiatives that have been reported.
B. Interviewed key representatives of the ERB and determined whether any challenges have occurred related to recruiting and hiring a diverse group of applicants into the executive development programs (i.e., CDP, Executive Readiness) or making SES appointments.
Internal
controls methodology
Internal
controls relate to management’s plans, methods, and procedures used to meet
their mission, goals, and objectives.
Internal controls include the processes and procedures for planning,
organizing, directing, and controlling program operations. They include the systems for measuring,
reporting, and monitoring program performance.
We determined the following internal controls were relevant to our audit
objective: the ERB practices in
executing SES initiatives, the annual MD-715 reporting, and the organizational “control environment” or
“tone at the top” of management’s attitude, awareness, and actions relative to
SES diversity initiatives. We
evaluated these controls by reviewing documentation and interviewing management
executives and staff employees.
Validity and reliability of data from computer-based
systems
We obtained demographic data on IRS employees from the Office of
Program Evaluation and Risk Analysis for the time period FY 2004 through FY
2009. The source of the data was the
Employee Master Database. To verify the
reliability of the data, we performed some queries to test whether the data were
complete. We determined that from a
total of 25,416 records obtained, 15 of the records had no more than two fields
missing. We determined this number was not
material to our data validity and subsequently dropped them from our analysis.
Appendix II
Major Contributors to This Report
Nancy A. Nakamura, Assistant Inspector General for Audit (Management
Services and Exempt Organizations)
Alicia Mrozowski, Director
John Ledford, Audit Manager
Michelle Philpott, Audit Manager
Doris Hynes, Acting Audit Manager
Dave Robben, Acting Audit Manager
Ken Henderson, Lead Auditor
Allen L. Brooks, Senior Auditor
Andrew J. Burns, Senior Auditor
Julia Moore, Senior Auditor
Gary Pressley, Senior Auditor
Evan Close, Audit Evaluator
Appendix III
Commissioner C
Office of the Commissioner – Attn: Chief of Staff C
Commissioner, Large Business and International Division SE:LB
Commissioner, Small Business/Self-Employed Division SE:S
Commissioner, Tax Exempt and Government Entities Division SE:T
Commissioner, Wage and Investment Division SE:W
Chief, Agency-Wide Shared Services OS:A
Chief Technology Officer OS:CTO
IRS Human Capital Officer OS:HC
Executive Director, Equity, Diversity and Inclusion EEO
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, Large Business and International Division SE:LB
Commissioner, Small Business/Self-Employed Division SE:S
Commissioner, Wage and Investment Division SE:W
Director, Communications and Liaison, Tax Exempt and Government Entities Division
SE:T:CL
Chief, Agency-Wide Shared Services OS:A
Chief Technology Officer OS:CTO
IRS Human Capital Officer OS:HC
Appendix IV
Management’s Response to the Draft Report
DEPARTMENT OFTHE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
HUMAN CAPITAL OFFICE
October 24, 2011
MEMORANDUM
FOR TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
ATTENTION: DEPUTY INSPECTOR GENERAL
FOR AUDIT
FROM: Debra Chew // Debra Chew
IRS Human Capital Officer
SUBECT: Response to Draft
Audit Report - The Internal Revenue Service Diversity Demographics Compare
Favorably with other Federal Agencies' Senior Executive Service Ranks (Audit #
200910003)
We have
reviewed the subject draft report and appreciate your recognition of the successes
the IRS has achieved in our Senior Executive Service (SES) diversity demographics
and the steps we have taken to integrate diversity practices into our business
processes.
The IRS
commitment to diversity begins at the top and is something of which we are very
proud. In 2010, the Commissioner stated, "I am convinced that the unique attributes
of each employee offer incalculable benefits to our organization. Therefore, I am
committed to not only creating a working environment that is free from
discrimination and other barriers to full participation, but also welcomes
people from all backgrounds, and reflects the taxpaying public we serve."
Our IRS Strategic Plan, which flows to all levels of the Service, emphasizes
the importance of diversity as a critical business imperative aimed at building
a strong workforce.
Attached is a
detailed response to address your recommendations. If you have any questions
regarding this information, please contact Debra Chew, IRS Human Capital Officer
at (202) 622-7676 or Kim Barczak, Acting Director,
Executive Services Division at (202) 622-6320.
Attachment
Attachment
Recommendation 1: The
Deputy Commissioner for Operations Support and the Deputy Commissioner for
Services and Enforcement should ensure that the IRS's key diversity practices
are memorialized within EDI internal guidance (policies and procedures).
Comments:
As TIGTA
found, the bedrock of IRS's successful diversity strategy is top level
executive commitment and support coupled with sound diversity management
principles where diversity and inclusion is woven into the business and human
capital processes. Essentially, the best written policies, processes, and strategies
are not enough without the support and actions that reflect commitment from the
top.
CORRECTIVE ACTION(S): The
IRS recognizes that documentation can only supplement and strengthen its
diversity and inclusion efforts. In fact, prior to the issuance of this report,
the Office of Equity, Diversity and Inclusion (EDI) has already made
significant efforts to memorialize the diversity and inclusion policies and
strategies with documents such as the EDI Strategic Plan and draft documents
such as the Diversity and Inclusion Internal Revenue Manual, Diversity and
Inclusion Philosophy, and Business Case for Diversity.
Though TIGTA
recommends that polices be documented within EDI internal guidelines, IRS knows
that EDI does not act alone in ensuring diversity and inclusion exist within the
SES and across the Service. Other IRS divisions, in particular those within the
Human Capital Office, such as Executive Services and Leadership, Education and Delivery
Services, as well as the Executive Resources Board are also key players.
The goal is
to create a transparent process for all IRS employees who strive to reach the
SES ranks. HCO and EDI will partner to review existing written policies and
revise, if necessary, to ensure these documents accurately capture current
practices.
IMPLEMENTATION DATE: February
29, 2012
RESPONSIBLE OFFICIAL(S): IRS
Human Capital Officer (Lead)
Executive Director, Equity, Diversity
and Inclusion
Recommendation 2: The
Deputy Commissioner for Operations Support and the Deputy Commissioner for
Services and Enforcement should consider partnering with Federal professional
executive organizations to gain additional insight on diversity issues in the
Federal executive community, identify mentoring practices, and use these partnerships
as a tool to recruit executive applicants.
Comments:
The SES
Candidate Development Program (CDP) is the principal means through which the
IRS seeks to identify and hire our career executive corps. The IRS has
advertised and promoted diversity awareness to the CDP by recruiting for this
program in multiple external publications and on websites such as: Association
for Latino Professionals in Finance/Accounting, National Association of Blacks
in Government, National Association of Black Accountants, and American Society
of Women Accountants. In addition to those previously named, the IRS is
currently partnering with National Society of Hispanic MBAs, League of United
Latin American Citizens, Federally Employed Women, National Association of
Asian American Professionals, National Organization on Disability, American
Association of People with Disabilities, and National Council on Disability.
CORRECTIVE
ACTION(S):
The IRS
concurs that partnering with external stakeholders, like professional organizations,
is a good practice and we will continue to foster existing partnerships and begin
new ones with these types of organizations. On September 27 of this year, the IRS
reached out to five Federal Executive Associations. Outreach efforts to an additional
40 executive and professional associations are planned for FY 2012.
IMPLEMENTATION
DATE: September 30, 2012
RESPONSIBLE
OFFICIAL: IRS Human Capital Officer
Recommendation
3: The IRS HCO should consider ways to
communicate to employees the existence of professional executive organizations
that may assist employees in their self-development efforts toward higher level
and SES positions.
Comments:
Currently the
IRS collaborates with internal organizations, such as the Asian Pacific Internal
Revenue Employees, Association for the Improvement of Minorities, Federal Employed
Women, Hispanic Internal Revenue Employees and other similar employee organizations,
dedicated to recruiting and promoting better opportunities for minorities in the
workplace. Additionally, we communicate to all employees about career development,
job announcements and other growth opportunities via the IRWeb
Intranet webpage, Leader's Alert, All Employees emails, Spotlight and our
Career Opportunities List. The IRS agrees to continue to reach out to employee
organizations and communicate to employees about these professional
organizations and their services.
The IRS also
currently partners with a significant number of minority facing organizations,
a few of which were named in Recommendation 2, and will continue to do so.
CORRECTIVE
ACTION(S): The IRS will communicate to all employees
about the external organization with which it partners. The communication will
include links to various external organizations to promote increased awareness.
IMPLEMENTATION
DATE: December 31, 2012
RESPONSIBLE OFFICIAL: IRS Human Capital Officer
[1] The SES is comprised of the men and women charged with leading the continuing transformation of the Federal Government. This dedicated corps of executives shares a commitment to public service and a set of democratic values grounded in the fundamental ideals of the Constitution. As the leaders of our Federal civilian workforce, Senior Executives strive each day to create a more citizen-centered, results-oriented Federal Government.
[2] A 12-consecutive-month period ending on the last day of any month, except December. The Federal Government’s fiscal year begins on October 1 and ends on September 30.
[3] EEO embodies the principle of fair treatment in Federal
employment and personnel matters without regard to race, color, sex, religion,
national origin, age, or physical or mental disability.
[4] Affirmative employment was first established by the Federal Government in 1965. This legal mandate consists of special actions in recruitment, hiring, and other areas designed to eliminate the effects of past discrimination.
[5] A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured, written document, but may also sometimes come in the form of a short verbal argument or presentation.
[6] Pub. L. No. 88-352, Title VII.
[7] This Directive provides policy guidance and standards for establishing and maintaining effective affirmative programs of EEO under Section 717 of Title VII (PART A) and effective affirmative action programs under Section 501 of the Rehabilitation Act (PART B). The Directive also sets forth general reporting requirements (PART C).
[8] Senior-Level positions are classified above GS-15. The work of the position does not meet SES criteria nor does it involve the fundamental research and development responsibilities that are characteristic of Scientific and Professional positions.
[9] The SES CDP is the principal means through which the IRS seeks to identify and hire career executives. The CDP provides selected applicants the opportunity to work with a diverse, knowledgeable, and highly skilled workforce. The Program consists of formal training and developmental assignments. Its purpose is to identify outstanding persons with demonstrated leadership competencies and to prepare them for SES positions.
[10] The feeder group is comprised of GS-13, GS-14, and GS-15 grade levels and provides advancement opportunities not only to the next grade level but also potentially to career SES appointments.
[11] The IRS has an intentional outreach and recruitment plan that is linked to the workforce data to ensure it is targeting areas of underrepresentation. This recruitment plan is formulated annually and adjusted to the shifting workforce demographics. The Office of EDI collaborates with the IRS Recruitment Office to develop a workforce data-driven Annual Diversity Recruitment Plan and a corresponding Annual Media Plan.
[12] Examples of IRS various leadership programs would include the Frontline Leadership Readiness Program, Department Manager Readiness Program, Senior Manager Readiness Program, Executive Readiness Program, and Candidate Development Program.
[13] The Small Business/Self-Employed and Wage and Investment Divisions have reported in their Business Performance Reports actions taken and progress made on their diversity initiatives.
[14] Contributor’s Meetings provide guidance and coordination, share best practices, and ensure consistent reporting in the MD-715 among representatives from the various HCO and EDI units who participate in these monthly meetings.
[15] The EDI Strategic Plan was also shared IRS-wide and the Office of EDI has plans to prepare an annual report on the progress toward achieving the plan’s goals and objectives.
[16] A trigger is information that alerts the agency to a possible barrier. Triggers require additional investigation or scrutiny to determine if a barrier exists. Triggers are commonly referred to as “red flags.”
[17] In addition to the EDI Strategic Plan, Corporate Priorities, and the annual MD-715 reports, the IRS advised us it has developed several other approaches for addressing diversity at all levels of the IRS, including the SES level. Some of these practices are documented in the Federal EEO Recruitment Plan; the IRS Recruitment Office Strategic Recruitment Plan; the IRS Plan for Recruitment, Hiring, and Retention of Individuals With Disabilities/Targeted Disabilities; and the IRS Recruitment Office Communication Strategy.
[18] The Association for the Improvement of Minorities educates and develops members to their fullest career and personal potential free from negative influence and discriminatory policies and practices; Asian Pacific American IRS Employees helps to foster opportunities for professional development and personal growth for members; Hispanic IRS Employees prepares its members for the future; Deaf Empowerment and Advocacy Forum strives for a fully integrated, accessible workforce for the deaf and hard of hearing; and the Visually Impaired Employees Workforce improves the quality of visually impaired employees’ daily workplace experience and environment.
[19] These professional organizations include the National Association of Hispanic Federal Executive, the African American Federal Executive Association, the Senior Executive Association, and the Asian American Government Executive Network. In general, the purpose of these organizations is to sponsor programs that enhance opportunities for members to serve our Nation in senior-level Government positions.