GAO: IRS modernization still needs improvement

Business Systems Modernization: Internal Revenue Service’s Fiscal Year 2007 Expenditure Plan [.pdf]

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The Internal Revenue Service has yet to implement some controls and capabilities related to requirements development and management and post-implementation reviews of its Business Systems Modernization program.

The tax agency, however, has put in place many recommendations from the Government Accountability Office to improve BSM management, GAO said. The IRS also has met the Office of Management and Budget’s capital planning and investment control review requirements and complied with federal systems acquisition requirements and management practices as part of its fiscal 2007 expenditure plan.

The IRS still needs to more fully develop a long-term vision and strategy for completing the modernization program, including time frames for consolidating and retiring systems, said David Powner, director of GAO’s information technology management issues, in his review of the agency’s 2007 expenditure plan.

The IRS also could improve its approach to determining whether a BSM project meets expectations for its performance.

“Although IRS’ expenditure plan provides descriptive information on changes in project releases’ scope, it does not provide a quantitative measure of whether project releases delivered planned functionality,” Powner said.

The IRS will develop an interim approach to measure results against expectations by September, said IRS Commissioner Mark Everson, in his response. The agency evaluated options, such as earned value management, to determine the best approach.

GAO expressed confidence in the IRS’ recognition of the significant risks and issues that future BSM projects face in delivering planned functionality within cost and schedule estimates, and mitigation strategies to address them.

The IRS expects to complete by next month 13 high-priority initiatives to assess, prioritize and address challenges in and improve its BSM program. These include establishing requirements development and management processes and guidance, and defining governance structures and processes across all projects.

The IRS made more progress last year in meeting cost and schedule plans within the 10 percent targeted variance for BSM projects, including the Filing and Payment Compliance tax collection case support system.

But two of the project segments related to the Customer Account Data Engine, the modernized taxpayer database, exceeded costs by 15 percent, and the Modernized e-File, the new electronic filing platform, exceeded costs by 36 percent. The IRS said that late-breaking tax legislation or other mandatory filing season changes have an adverse effect on the development and testing schedules.


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