TIGTA Criticises Management OF IRS Modernization Program

by Leroy Baker, Tax-News.com, London

11 June 2004

The Internal Revenue Service's business systems modernization program (BSM) has been given a mixed assessment by the Treasury Inspector General for Tax Administration's office, which has said that more must be done to address the program’s weaknesses.

“While progress is being made, the IRS and its contractors have drawn increased criticism due to continuing schedule delays and cost increases. As a result, pressure has been mounting from various oversight groups to deliver a successful program,” announced the TIGTA report, issued on June 3.

The BSM project aims to completely overhaul the agency’s technological and business processes in a program that is expected to last fifteen years and cost $7 billion.

The program is currently into its sixth year and has received around $1.6 billion in funding. However, individual projects have been dogged by frequent delays and cost overruns which have been blamed on the setting of unachievable timescales for their delivery.

Testifying earlier this year, IRS Commissioner Mark Everson admitted this was the case, stating that "it's no secret that our projects have consistently run late, delivered less functionally than planned, and cost significantly more than targeted."

Noting the conclusions of previous studies of the BSM program, the TIGTA report went on to say that "since many of the prior TIGTA recommendations have resurfaced as part of the recent studies, we conclude that BSM weaknesses continue to exist and that the IRS and its contractors need to complete planned corrective actions to address the root causes identified in the studies."

The report identified four key areas where problems within the project must be overcome including: committing adequate resources to ensure the success of projects; managing the increasing complexity and risks of the BSM program; maintaining the continuity of strategic direction with experienced leadership, and ensuring prime contractor performance and accountability are effectively managed.

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