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Treasury Inspector General for Tax Administration

Press Release

July 10, 2013
TIGTA - 2013-24
Contact: David Barnes
(202) 622-3062

The IRS Is Taking Steps to Consolidate Data Centers; More Needs to Be Done

WASHINGTON - The Internal Revenue Service (IRS) is consolidating its data centers to reduce data center space, cut costs, and save energy, but needs a plan to achieve future savings goals, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

In February 2010, the Office of Management and Budget (OMB) instructed Federal agencies to cut costs and save energy by reducing the number of Federal data centers. In response to the OMB mandate, the IRS set a goal of reducing its data center space by 50 percent and reducing the number of data centers from 15 to eight by the end of Fiscal Year 2015.

TIGTA reviewed whether the IRS’s Data Center Consolidation Initiative would effectively reduce data center space and increase energy efficiency.

“Decreasing redundant or unnecessary data centers, as well as reducing operational costs and energy consumption, is an important part of Federal efforts to cut costs and make more efficient use of taxpayer funds,” said J. Russell George, the Treasury Inspector General for Tax Administration.

The IRS exceeded its first two annual goals of reducing data center space and improving energy efficiency by closing two data centers and reducing the size of five other data centers by 76,560 square feet, TIGTA found.

However, the IRS lacks a clear plan to ensure that it meets its future data center space reduction goals, TIGTA found. The IRS has not formalized a project management plan that addresses challenges and details decisions, milestones, and time frames related to how the IRS will meet its data consolidation goals. In addition, the IRS has not identified the optimal footprint for its data centers. TIGTA auditors observed significant empty space at the IRS’s Enterprise Computing Center in Detroit, Michigan. IRS management subsequently informed TIGTA that the lease on the Detroit center expires in April 2015.

TIGTA’s eight recommendations to the IRS included developing a project management plan and consolidating the Detroit Enterprise Computing Center in Detroit into the Martinsburg and Memphis Enterprise Computing Centers.

IRS management agreed with seven of TIGTA’s recommendations. The IRS stated that it would close the Detroit data center and consolidate its operations into an appropriate facility of its choosing.

Read the report.


Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.

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