TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

EMPLOYEE CONDUCT ISSUES ARE NOT CONSIDERED WHEN PRIORITIZING
OVERDUE BACKGROUND REINVESTIGATIONS

Final Report issued on November 6, 2019

Highlights of Reference Number:  2020-10-002 to the Commissioner of Internal Revenue.

IMPACT ON TAXPAYERS

Federal regulations require Government employees in positions designated as moderate risk to have their background reinvestigated at least once every five years.  As of Fiscal Year 2018, the IRS determined that it had 42,250 employees in moderate‑risk positions.  Due to the sensitivity of taxpayer data handled by IRS employees, the IRS must be particularly cognizant of continuing to employ only those individuals who are suitable for Federal employment.

WHY TIGTA DID THE AUDIT

The overall objective of this audit was to assess the potential risks associated with overdue moderate‑risk background reinvestigations at the IRS.

WHAT TIGTA FOUND

As of the beginning of Fiscal Year 2018, 25,520 moderate‑risk employees were overdue for a background reinvestigation.  According to IRS Personnel Security office management, this large backlog resulted from multiple factors, including changes in Federal guidance and budget and staffing constraints.

Based on a review of publicly available records, TIGTA believes this backlog presents a high risk to the IRS.  TIGTA reviewed external public records and identified more than 1,000 employees with possible suitability issues, including more than 100 employees with serious criminal issues, e.g., sexual misconduct, fraud, and theft.

IRS leadership recognizes the importance of the requirement to investigate individuals in moderate‑risk positions at least once every five years.  In May 2018, the IRS began initiating moderate‑risk background reinvestigations and stated that, as of April 30, 2019, it had forwarded approximately 13,000 reinvestigations to the Office of Personnel Management at a cost of approximately $4.7 million.  By September 12, 2019, the IRS reported that the number of reinvestigations forwarded to the Office of Personnel Management had increased to more than 21,000.

However, the IRS does not use internal employee conduct information to prioritize which reinvestigations to initiate from its backlog.  By not considering conduct information, the IRS may be focusing its limited resources on employees who present a lesser risk to the integrity of the IRS.

For example, TIGTA’s review of the IRS’s internal employee conduct records found that approximately 3,000 employees with overdue background reinvestigations had serious misconduct issues since their last background check was completed.  Examples of the misconduct identified include violent behavior, sexual misconduct, drug use, and driving while intoxicated.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the Human Capital Officer work with the Office of Personnel Management to develop a risk-based method to prioritize the backlog of background reinvestigations.  In its response, IRS management agreed with the recommendation and stated that the Office of Personnel Management is willing to evaluate the remaining backlogged inventory submitted by the IRS and consult with the IRS to determine prioritization of the most serious investigation cases.

 

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2020reports/202010002fr.pdf.

 

Phone Number   /  202-622-6500

E-mail Address  /  TIGTACommunications@tigta.treas.gov

Website             /  https://www.treasury.gov/tigta