Last-minute spending hurts IRS, IG says

The Internal Revenue Service’s end-of-year spending increased dramatically in the past five fiscal years, according to a new report.

The agency spent more than $131 million in September of fiscal 2006, compared with $17 million in September 2002, the Treasury Inspector General for Tax Administration (TIGTA) found. In addition, the number of purchases in September jumped about 29 percent in 2006 compared with 2002, to 1,529.

The overload of work coming at the last minute caused problems in acquisitions. On 15 percent of 92 purchases in August and September 2006, TIGTA found that IRS violated appropriations regulations on four acquisitions, and contracting officers may have skipped steps in the procurement process on 10 others, the report states.

IRS generally sends its purchases through the Office of Procurement, which is responsible for researching and selecting contractors, purchasing the items, and approving the invoices for payment. At the same time, the contracting officers must adhere to governmentwide acquisition regulations and policies in addition those the IRS and Treasury Department issue.

TIGTA says repercussions could continue to strike the agency if this trend continues. The IRS may put too much pressure on its procurement officers to handle the 11th-hour workload, the report states. In such a situation, contracting officers likely mismanage and waste money. The officers also may fail because of the time crunch to meet the requirements for what a manager needs, the report states.

IRS procurement officials told TIGTA that the agency could save money if they had more time to define requirements and negotiate with contractors. In addition, officials said IRS offices submit incomplete requisitions because of the rush, the report states. The last-minute spending spree kept the contracting officers from doing their job thoroughly, according to the report.

The IG suggested, among other things, that IRS officials involve the acquisition officers in early procurement planning stages and when making important budgetary decisions. IRS agreed with the recommendations.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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