Treasury Inspector General for Tax Administration Inspections and Evaluations Highlights Highlights of Report Number: 2011-IE-R007 to the Internal Revenue Service Deputy Commissioner for Operations Support. WHY TIGTA DID THIS STUDY This project inspected the Internal Revenue Service’s (IRS’s) compliance with the Office of Management and Budget’s Implementing Guidance for the American Recovery and Reinvestment Act (Recovery Act) of 2009. WHAT TIGTA RECOMMENDED TIGTA made no recommendations following this inspection.

Issued on September 6, 2011 THE IRS’S ACCOUNTING FOR THE AMERCIAN RECOVERY AND REINVESTMENT ACT FUND EXPENDITURES DURING THE PERIOD OCTOBER 1, 2009, THROUGH MARCH 31, 2010 WHAT TIGTA FOUND The IRS was in substantial compliance with the Office of Management and Budget’s Implementing Guidance during the period October 1, 2009, through March 31, 2010. For the Recovery Act expenditures, the IRS executed adequate internal controls to ensure timely and accurate reporting; however; due to an oversight by the preparer, the IRS incorrectly reported amounts totaling approximately $4 million on two of the 26 weekly reports. IRS officials corrected these errors on later reports. During the period October 1, 2009, through March 31, 2010, the IRS initiated procurement actions purchasing goods and services totaling over $22 million. The IRS spent almost $19 million on the Health Insurance Tax Credit Administration and $3.5 million in Recovery Act administrative costs. Further, the IRS appropriately obtained 100 percent of the more than $185,000 available for discounts on Recovery Act related procurements. The IRS submitted timely financial reports fulfilling the Office of Management and Budget’s requirement to transmit weekly reports showing cumulative obligations and gross outlay activities. This process assisted in ensuring that the public has unprecedented transparency into the IRS’s use of Recovery Act funds. READ THE FULL REPORT To view the report, including the scope, methodology, and full IRS response, go to: http://www.treas.gov/tigta/iereports/2011reports/2011ier007fr.html Email Address: TIGTACommunications@tigta.treas.gov Phone Number: 202-622-6500 Web Site: http://www.tigta.gov