This audit was performed as part of the Treasury Inspector General for Tax Administration’s overall strategy to assess the reliability of the Internal Revenue Service’s (IRS) customer satisfaction performance measures as they relate to the Government Performance and Results Act of 1993 (GPRA). The GPRA is intended to improve agency performance and to provide objective information to congressional and executive branch decision-makers to assist them in appropriating and allocating federal funds. The law requires executive agencies to prepare multi-year strategic plans, annual performance plans, and performance reports on prior year accomplishments.

Balanced performance measures were established to support achievement of the IRS’ strategic goals: provide quality service to each taxpayer, serve all taxpayers, and be productive through a quality work environment. Achievement of these goals is measured through customer satisfaction, employee satisfaction, and business results. Customer satisfaction surveys are used to develop performance measures that balance customer needs with IRS operational needs. Taxpayers who receive specific kinds of services from the IRS are asked to rate the service. These survey results are summarized by a vendor and will be used by the IRS to evaluate the overall satisfaction with the IRS’ service.

The survey results will also be used to set goals and expectations for IRS operational needs and for the GPRA. The intent of the GPRA is that the Congress will use the performance measurement results to help evaluate the IRS budget appropriation. Therefore, it is essential that the IRS accurately measures its success in meeting the performance goals.

The overall objective of this review was to evaluate the reliability of the information used to measure customer satisfaction at the Walk-In offices. Walk-In offices offer personal tax assistance and services to taxpayers. The Walk-In Customer Satisfaction Survey is conducted every fifth week and should be offered to all taxpayers who receive assistance at Walk-In offices during a scheduled Survey week.

The present results of the Walk-In Customer Satisfaction Survey should not be used to satisfy the requirements of the GPRA unless qualified. IRS executives have not established an adequate management process to ensure the Survey is conducted appropriately to measure the level of satisfaction customers receive from interactions with Walk-In offices. There is little accountability over the Survey, and few management controls are in place to ensure the Survey results are accurate, reliable, and statistically valid and can be verified and validated for all customer interactions. Without reliable information, the IRS cannot provide a basis for comparing program results with the established performance goals and will not achieve the benefits of the GPRA as intended by the Congress.

We conducted testing in the National Office and the 4 IRS regions, including 13 districts and 34 Walk-In offices. We discussed the GPRA measurements and requirements with IRS employees and management. We posed as taxpayers and asked for tax assistance at selected Walk-In offices nationwide during scheduled Survey weeks. We conducted follow-up interviews with Walk-In personnel in selected Walk-In offices visited, obtained documentation on current procedures, and reviewed controls over the Survey process.

In addition to our testing, we consulted an expert statistician to solicit an independent opinion regarding the results of the Survey. We asked the statistician to focus on whether the procedures and practices used to conduct the Survey produce a statistically valid sample suitable for projecting an overall customer satisfaction rate with Walk-In services.

The current management control process is not adequate to ensure the Walk-In Customer Satisfaction Survey is administered properly. Specifically:

• More accountability is needed for the Walk-In Customer Satisfaction Survey results. Three different IRS functions currently provide oversight for the Survey, but none of them appear to be accountable for the Survey results.
• More management controls are needed to ensure the integrity or reliability of the Survey results. The IRS has issued guidelines for conducting the Survey, but there are no controls to prevent tampering with the Survey responses. Also, the IRS has not established controls to ensure all Walk-In offices participate in the Survey.
• Survey forms are not offered to all taxpayers. During our visits to selected Walk-In offices, we were offered a Survey form in only 5 out of 61 visits (8 percent). Only 2 of the 34 offices visited had signs or other advertisement to let taxpayers know a Customer Satisfaction Survey was being conducted.

We believe that, without reliable Survey results, the IRS cannot meet the GPRA requirements of establishing measurable performance goals and reporting accurate results.

To ensure that the IRS accurately measures the level of satisfaction customers receive from interactions with Walk-In offices, additional actions are needed. We recommend that the Director, Office of Strategic Planning and Budgeting improve the process for overseeing the Walk-In Customer Satisfaction Survey to ensure the Survey is properly administered and the results are accurate, valid, and reliable.

Management’s Response: Management’s response was due on May 1, 2000. As of May 11, 2000, management had not responded to this draft report.