IG praises IRS division

The arm of the Internal Revenue Service that manages contractor labor and related costs is working well, according to an internal inspector general report. The IG made no recommendations in the report.

The IRS’ “Business Systems Development organization is effectively monitoring its contractors’ performance and verifying related costs,” states the IG’s most recent audit report, dated March 31. The 18 invoices reviewed were appropriately funded, according to the report.

The organization is responsible for the upkeep of the IRS’ integrated information application systems. The report states that to accomplish its charge, the organization relies heavily on contractor support. In fiscal 2005, BSD was budgeted $144 million for contractor support, or about 39 percent of its total $370 million budget.

In contacting IRS systems users, the IG determined that the contractors’ goods and services adequately met business needs and were completed in a timely fashion.

BSD “is committed to using the most effective controls to manage its contract labor and related costs,” IRS Chief Information Officer W. Todd Grams wrote in a March 17 response letter to the agency’s IG.

The report states that users reported problems with one part of BSD, however: the Integrated Submission and Remittance Processing program’s Training On-Line Grader. The program is used for training and testing potential employees. Users said upgrades in 2005 and 2006 did not perform as intended, and the problems cost the IRS about $10,798 in overtime pay, the report found. The “BSD organization management explained [that] the IRS received late legislative changes affecting the tax processing year,” the report states. Problems were corrected by Jan. 13.

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