IRS database off the pace

The Internal Revenue Service's plan to modernize its data management system is behind schedule and running over budget, a General Accounting Office report said.

The Customer Account Data Engine project is part of the IRS' business systems modernization initiative. The project will put taxpayer information in a database, replacing an outdated system that has used tape to store tax returns and tax account data since the 1960s.

But GAO said the tax agency was over budget and behind schedule in meeting CADE's target for completion of its preliminary design.

"Moreover, IRS expected these budget and schedule shortfalls to increase, although specific new cost and timeframe commitments have not yet been set," GAO said in a letter dated June 12 to the Senate Appropriations Committee's Treasury and General Government Subcommittee.

The report said the problems occurred because IRS added new requirements for CADE that took extra time and work. The report also said that the IRS has not figured out how to integrate CADE with its enterprise architecture, the blueprint for running the IRS computer systems.

"The IRS has not yet fully employed several critical management controls that are intended to ensure that CADE is aligned with the enterprise architecture and integrated with other modernization projects and existing systems," GAO stated in its report.

IRS Commissioner Charles Rossotti said the agency is taking steps to fix the problem.

"CADE represents the most essential and one of the most difficult aspects of the entire modernization effort," Rossotti said in a letter to GAO.

In addition, Rossotti said the tax agency is conducting an in-depth review of the CADE design to make sure it complies with modernization standards.