IG: Risks overshadow IRS modernization successes

The IRS still wrestles with meeting long-term cost and schedule estimates and with managing its programs, although it successfully deployed business system modernization projects in the past year and met short-term deadlines, according to the Office of the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA today released its annual report on IRS business systems modernization.

Weaknesses continue in critical program management and system development processes, such as requirements and contract management, software testing and security controls. “BSM project accomplishments did not include all intended capabilities, were not delivered on schedule and exceeded proposed costs,” the report said.

The IRS has taken on more responsibilities this year by assuming the role of systems integrator from its prime contractor, Computer Sciences Corp. Many of the program management issues are related to this transition, said TIGTA, which conducted its review from January through May.

“We remain cautious about looking forward based on [fiscal] 2004 results, due to uncertainties related to BSM roles and responsibilities and the challenges facing the IRS that could affect future accomplishments,” said Pamela Gardiner, deputy inspector general for audit.

On the positive side, the IRS has developed the infrastructure to support its modernization projects, including an enterprise architecture that encompasses all IRS business units, processes, programs and operations and provides details to help guide current and future modernization initiatives. It has taken steps to improve program management, such as establishing individual requirements and release management offices, which are developing guidelines and processes to support their components.

The IRS in its response said the schedule delays and cost increases this past year were due to factors beyond its control, such as additional requirements and congressional delays in passing legislation and budget cuts. “We are very confident that we have the management focus and discipline in place to ensure that we are ‘doing things right’ as opposed to ‘doing things fast,’ such as exiting milestones prematurely,” said IRS CIO Todd Grams in a letter to TIGTA.

TIGTA spotlighted the same primary challenges the IRS and its contractors must meet that it has cited the past three fiscal years:
  • Implementing planned improvements in key management processes and committing the necessary resources

  • Managing the increasing complexity and risks of the BSM program

  • Maintaining the continuity of strategic direction with experienced leadership

  • Ensuring contractor performance and accountability are effectively managed.

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