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Treasury Inspector General for Tax Administration

Press Release

August 23, 2010
TIGTA - 2010-44
Contact: Karen Kraushaar
(202) 622-6500

TIGTA Report Raises Concerns Regarding the IRS's Oversight of Recovery Act Funding

WASHINGTON - Procurements that are both awarded and planned by the Internal Revenue Service (IRS) as part of the American Recovery and Reinvestment Act of 2009 (Recovery Act) may be at risk due to inadequate oversight, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The IRS received $203 million as part of the Recovery Act to reprogram its computer systems and to update tax forms, publications and customer services. As of April 2010, the IRS had initiated or was in the process of initiating 26 procurement actions on Recovery Act program initiatives with a total contract value of $81.9 million.

Despite the influx of Recovery Act money, the IRS has not completed steps to improve contract oversight by its Contracting Officers' Technical Representatives (COTRs), who administer the technical aspects of government contracts following their award, TIGTA found.

"IRS management has implemented some of the corrective actions they planned as a result of our previous findings," said J. Russell George, the Treasury Inspector General for Tax Administration. "However, IRS Recovery Act procurements are still at risk that goods and services received are not in compliance with the terms and conditions of the contracts or within the cost and schedule requirements."

In a 2009 audit, TIGTA found that IRS COTRs were not always performing all of their oversight duties. Instead, they limited their involvement to administrative functions and relied on program office employees who lacked delegated authority and training required to determine whether the goods or services provided by the contractor were acceptable. Additionally, COTRs were not requesting and retaining sufficient receipts to verify contractors' invoiced charges, including labor hours. After TIGTA's 2009 audit, the IRS took several actions, including issuing a memo on the importance of the COTR's role in contract administration and procurement monitoring, and updated its COTR policies.

Although TIGTA made no recommendations in this report, IRS management reviewed and agreed with the facts and conclusions presented.


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