Office of Audit
IMPROVED CONTROLS ARE NEEDED TO ACCOUNT FOR THE ISSUANCE
AND RETURN OF CONTRACTOR EMPLOYEE LAPTOP COMPUTERS
Final Report issued on August 25, 2016
Highlights of Reference Number: 2016-10-057 to the Internal Revenue Service Chief Procurement Officer and Chief Technology Officer.
IMPACT ON TAXPAYERS
During Fiscal Year (FY) 2014, IRS records showed that more than 7,900 contractor employees terminated their employment on contracts with the IRS. It is important for the IRS to recover Government computers from contractor employees to prevent unauthorized access to computer systems and taxpayer information, and to prevent the loss of Government equipment.
WHY TIGTA DID THE AUDIT
The overall objective of this audit was to determine whether the IRS implemented policies and procedures to provide reasonable assurance that the issuance and return of laptop computers are adequately documented when contractor employees separate from the IRS.
WHAT TIGTA FOUND
Contract administration documentation used to account for the issuance of laptop computers to contractor employees and the return of laptop computers from contractor employees was often incomplete, inaccurate, or not provided for review. Furthermore, separately maintained computer inventory records were not always accurate or did not always match contract administration documentation. Without better recordkeeping practices, the IRS is vulnerable to the loss of laptop computers, which may contain taxpayer information.
The two separately maintained sources used to account for the return of laptop computers from contractor employees did not reconcile. Specifically, contract administration documentation and computer inventory records only matched for 12 of 40 laptop computers associated with contractor employees TIGTA sampled. For the remaining laptop computers, contract administration documentation and computer inventory records differed. For example, IRS officials provided contract administration documentation showing three laptop computers were issued to contractor employees in TIGTA’s sample, but computer inventory records did not show laptop computers were ever assigned to the contractor employees.
These errors were caused by several factors. For example, TIGTA could not identify any guidance for the audit time period regarding how contract administration officials should document the issuance of laptop computers to contractor employees. Contract administration officials also did not always use current forms requiring barcodes to document the return of laptop computers.
After the time period of our sample, the IRS developed a training package that included requirements for contract administration officials to maintain a log of IRS-issued equipment in the contract file, including a description of the equipment issued, the barcode, the serial number, the date issued, and the date returned.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS strengthen management oversight by: 1) updating the appropriate checklist or process and conducting training to provide reasonable assurance that barcodes are documented in contract administration documentation for the issuance of laptop computers to contractor employees and the return of laptop computers from contractor employees and 2) developing a process to review and compare contract administration documentation and computer inventory records.
In its response, the IRS agreed with TIGTA’s recommendations and stated that it plans to update processes and checklists, and provide training. In addition, the IRS plans to implement a process to compare and reconcile contract administration documentation, contractor inventory lists, and computer inventory records.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / https://www.treasury.gov/tigta