IRS upgrade scrutinized

"The Internal Revenue Service Should Ensure the Root Causes of Business Systems Modernization Performance Problems Are Successfully Addressed"

The second of two Treasury Inspector General for Tax Administration reports released within the past two weeks questions whether the Internal Revenue Service officials' rescue plan for the agency's troubled modernization project has been suitably implemented.

When tax agency officials created the Business Systems Modernization Challenges Plan in 2003, they left out ways of measuring successful execution, auditors state in the new report. Modernization officials fashioned the plan by collating recommendations from four 2003 studies of the decade-long project to replace the tax agency's Kennedy-era tax-processing technology. However, IRS officials generated their list of action items in a somewhat random manner, auditors said. In addition, several items were subsequently closed before significant activities were completed, the report says.

For example, auditors found some compliance with the plan's requirement for following enterprise life cycle methodology -- which ensures that business processes are matched to work needs -- but nothing exists to make sure officials strictly follow the process.

In all, 10 of the actions listed as accomplished still had significant work activities to be completed, auditors state.

Although Richard Spires, modernization chief, reviewed the plan and the list of closed-out items in May and decided to reopen and update the action item list, the work on his updated list is not being tracked in an internal database meant to keep tabs on IRS activities, auditors said.

"There is a lot of work ahead of us to continue to mature the [modernization] program," wrote W. Todd Grams, the IRS' chief information officer, in a written response to auditors.

Some steps the audit calls for are already being implemented, he said. Ways of measuring success are being implementing during the beginning of fiscal 2005, and items from the updated plan have been entered into the IRS tracking database, he wrote.