This is the accessible text file for GAO report number GAO-06-360 
entitled 'Business Systems Modernization: Internal Revenue Service's 
Fiscal Year 2006 Expenditure Plan' which was released on February 21, 
2006. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Report to Congressional Committees: 

February 2006: 

Business Systems Modernization: 

Internal Revenue Service's Fiscal Year 2006 Expenditure Plan: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-360]: 

GAO Highlights: 

Highlights of GAO-06-360, a report to congressional committees: 

Why GAO Did This Study: 

The Internal Revenue Serviceís (IRS) Business Systems Modernization 
(BSM) program is a multibillion-dollar, high-risk, highly complex 
effort that involves the development and delivery of a number of 
modernized information systems intended to replace the agencyís aging 
business and tax processing systems. As required by law, IRS submitted 
its fiscal year 2006 expenditure plan, in October 2005, to 
congressional appropriations committees, requesting $199 million from 
the BSM account. 

GAOís objectives in reviewing the plan were to (1) determine whether it 
satisfied the conditions specified in the law and (2) provide any other 
observations about the plan and IRSís BSM program. 

What GAO Found: 

IRSís fiscal year 2006 expenditure plan satisfies the conditions 
specified in the law. These conditions include meeting the Office of 
Management and Budgetís capital planning and investment control review 
requirements and complying with federal systems acquisition 
requirements and management practices. 

GAOís observations on the expenditure plan and BSM program include the 
following: 

* During 2005, IRS made further progress in implementing BSM, but some 
projects did not meet short-term cost and schedule commitments. IRS 
deployed additional releases of several modernized systems, including 
the Customer Account Data Engine (the new taxpayer information 
database), e-Services (a new Web portal and electronic services for tax 
practitioners), and Modernized e-File (a new electronic filing system). 
While three project releases were delivered within the cost and/or 
schedule commitments presented in the fiscal year 2005 expenditure 
plan, others experienced cost increases or schedule delays. 

* IRS has identified significant risks and issues that confront future 
planned system deliveries. The agency recognizes the potential impact 
of these project risks and issues on its ability to deliver planned 
functionality within cost and schedule estimates, and, to its credit, 
has developed mitigation strategies to address them. 

* IRS has made additional progress in addressing high-priority BSM 
program improvement initiatives. Its program improvement process 
appears to be an effective means of assessing, prioritizing, and 
addressing BSM issues and challenges. However, much more work remains 
for IRS to fully address these issues and challenges. 

* In response to GAOís prior recommendation, IRS is developing a new 
Modernization Vision and Strategy to address BSM program changes and 
provide a modernization roadmap. IRS expects to complete a high-level 
Vision and Strategy, as well as a more detailed 5-year plan for the 
modernization program, by mid-March 2006. 

* The expenditure plan submitted to the Congress contains outdated 
program status information and omits key details concerning deferred 
BSM functionality. IRSís fiscal year 2006 plan is substantially based 
on information describing the status of BSM projects and program 
management initiatives as of April 2005, and, therefore, in key areas 
did not adequately describe progress or provide information consistent 
with the programís status at the time the plan was submitted to the 
Congress in October 2005. Without current and complete information, 
effective congressional oversight of BSM progress and accountability is 
impaired. 

What GAO Recommends: 

GAO recommends that the Commissioner of Internal Revenue ensure that 
future expenditure plans submitted to the congressional appropriations 
subcommittees provide current and complete program status information 
and report any changes to prior commitments concerning the delivery of 
BSM project functionality. In providing comments on a draft of this 
report, the Commissioner agreed with GAOís findings and described the 
actions that IRS is taking to address GAOís recommendation. 

www.gao.gov/cgi-bin/getrpt?GAO-06-360. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact David A. Powner at (202) 
512-9286 or pownerd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Recommendation for Executive Action: 

Agency Comments: 

Appendixes: 

Appendix I: Briefing Slides from the November 30, 2005, Briefing to the 
Senate and House Appropriations Subcommittee Staffs: 

Appendix II: Comments from the Internal Revenue Service: 

Appendix III: GAO Contact and Staff Acknowledgments: 

BSM: Business Systems Modernization: 

IRS: Internal Revenue Service: 

OMB: Office of Management and Budget: 

Letter February 21, 2006: 

The Honorable Christopher S. Bond: 
Chairman: 
The Honorable Patty Murray: 
Ranking Member: 
Subcommittee on Transportation, Treasury, the Judiciary, Housing and 
Urban Development, and Related Agencies: 
Committee on Appropriations: 
United States Senate: 

The Honorable Joe Knollenberg: 
Chairman: 
The Honorable John W. Olver: 
Ranking Member: 
Subcommittee on the Departments of Transportation, 
Treasury, and Housing and Urban Development, the Judiciary, District of 
Columbia, and Independent Agencies: 
Committee on Appropriations House of Representatives: 

As required by law, the Internal Revenue Service (IRS) submitted its 
fiscal year 2006 expenditure plan, in October 2005, to the 
congressional appropriations committees, requesting $199 million from 
the Business Systems Modernization (BSM) account. Our objectives in 
reviewing the plan were to (1) determine whether the plan satisfied the 
conditions specified in the law[Footnote 1] and (2) provide any other 
observations about the plan and IRS's BSM program. 

On November 30, 2005, we briefed your respective offices on the results 
of our review. This report transmits the materials we used at the 
briefing and provides the recommendation that we made to the 
Commissioner of Internal Revenue. The full briefing materials, 
including our scope and methodology, are reprinted as appendix I. 

In summary, we made the following major points: 

* IRS's fiscal year 2006 plan satisfies each of the six legislative 
conditions. 

* IRS has made further progress in implementing BSM, but some projects 
did not meet short-term cost and schedule commitments. During 2005, IRS 
deployed additional releases of several systems, including the Customer 
Account Data Engine (the new taxpayer information database), e-Services 
(a new Web portal and electronic services for tax practitioners), and 
Modernized e-File (a new electronic filing system). While three project 
releases were delivered within the cost and/or schedule commitments 
presented in the fiscal year 2005 expenditure plan, others experienced 
cost increases or schedule delays. For example, our analysis shows that 
Release 1.3.1 of the Customer Account Data Engine was delivered at the 
estimated cost and that the e-Services upgrade was completed on time 
and within the estimated project cost. However, two project segments-- 
Integrated Financial System Release 1, Milestone 5, and Modernized e- 
File Release 3.2, Milestone 4--experienced cost increases of 93 percent 
and 29 percent, respectively. 

* Future BSM project deliveries face significant risks and issues, 
which IRS is addressing. IRS has identified significant risks and 
issues with its future planned system deliveries. For example, 
according to IRS, schedule delays associated with Release 1.3.1 of the 
Customer Account Data Engine, as well as contention for key resources 
between Releases 1.3.1 and 1.3.2, necessitated the deferral of some 
functionality to later releases. These requirements deferrals may 
negatively impact cost and schedule for Releases 2.1 and 2.2, which are 
currently scheduled to be deployed in August 2006 and December 2006, 
respectively. The agency, however, recognizes the potential impact of 
these project risks and issues on its ability to deliver planned 
functionality within cost and schedule estimates, and, to its credit, 
has developed mitigation strategies to address them. 

* IRS has made additional progress in addressing high-priority BSM 
program improvement initiatives. Its high-priority improvement 
initiatives appear to be an effective means of assessing, prioritizing, 
and addressing BSM issues and challenges. However, much more work 
remains for the agency to fully address these issues and challenges. 
IRS is currently focusing on 22 high-priority initiatives, which it 
plans to have completed by the end of March 2006. These initiatives 
include establishing requirements management standards and executing 
the implementation plan for integrated schedule and baseline 
management. 

* In response to our prior recommendation, IRS reports having efforts 
under way to develop a new Modernization Vision and Strategy to address 
BSM changes and provide a modernization roadmap. IRS anticipates having 
an approved high-level Vision and Strategy in place in early fiscal 
year 2006, and expects to complete a more detailed 5-year plan for the 
modernization program by mid-March 2006.[Footnote 2] We believe these 
actions represent good steps toward addressing our prior recommendation 
to fully revisit the vision and strategy for the BSM program and 
develop a new set of long-term goals, strategies, and plans consistent 
with the budgetary outlook and with IRS's management capabilities. 

* The expenditure plan submitted to the Congress contains outdated 
program status information and omits key details concerning deferred 
BSM functionality. IRS's fiscal year 2006 expenditure plan is 
substantially based on information describing the status of BSM 
projects and program management initiatives as of April 2005, and, 
therefore, in key areas did not adequately describe progress or provide 
information consistent with the program's status at the time the plan 
was submitted to the Congress in October 2005. Specifically, the plan 
(1) does not disclose that planned functionality for two BSM project 
releases has been deferred to future releases and (2) contains a number 
of inconsistencies between project cost and schedule data shown 
throughout the document. Without current and complete information, 
effective congressional oversight of BSM progress and accountability is 
impaired. 

Recommendation for Executive Action: 

To allow for effective congressional oversight of the BSM program, we 
recommend that the Commissioner of Internal Revenue direct the Chief 
Information Officer to take the following action: 

* ensure that future expenditure plans submitted to the congressional 
appropriations subcommittees provide current and complete program 
status information and report any changes to prior commitments 
concerning the delivery of BSM project functionality. 

Agency Comments: 

In providing written comments on a draft of this report, the 
Commissioner of Internal Revenue agreed with our findings and stated 
that the report fairly represents BSM accomplishments as well as future 
risks. The Commissioner also described the actions that IRS is taking 
to implement our recommendation, including formulating a policy and 
initiating dialogue with the Department of the Treasury and the Office 
of Management and Budget to resolve expenditure plan development and 
review process issues. The Commissioner's written comments are 
reprinted in appendix II. 

We are sending copies of this report to the Chairmen and Ranking 
Members of other Senate and House committees and subcommittees that 
have appropriation, authorization, and oversight responsibilities for 
the Internal Revenue Service. We are also sending copies to the 
Commissioner of Internal Revenue, the Secretary of the Treasury, the 
Chairman of the IRS Oversight Board, and the Director of the Office of 
Management and Budget. Copies are also available at no charge on the 
GAO Web site at [Hyperlink, http://www.gao.gov]. 

Should you or your offices have questions on matters discussed in this 
report, please contact me at (202) 512-9286 or [Hyperlink, 
pownerd@gao.gov]. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. GAO staff who made major contributions to this report are 
listed in appendix III. 

Signed by: 

David A. Powner: 
Director, Information Technology Management Issues: 

[End of section] 

Appendixes: 

Appendix I: Briefing Slides from the November 30, 2005, Briefing to the 
Senate and House Appropriations Subcommittee Staffs: 

Review of IRS's Fiscal Year 2006 Business Systems Modernization 
Expenditure Plan: 

Briefing for the staffs of the Subcommittee on Transportation, 
Treasury, the Judiciary, Housing and Urban Development, and Related 
Agencies: 
Senate Committee on Appropriations and 
Subcommittee on the Departments of Transportation, Treasury, and 
Housing and Urban Development, the Judiciary, District of Columbia, and 
Independent Agencies: 
House Committee on Appropriations: 

November 30, 2005: 

Briefing Contents: 

* Introduction and Objectives: 

* Results in Brief: 

* Background: 

* Scope and Methodology: 

* Results: 

* Conclusions: 

* Recommendation for Executive Action: 

* Agency Comments: 

* Appendixes: 

- I: Description of Business Systems Modernization (BSM) Projects and 
Program-Level Initiatives: 
- II: Additional Detail on IRS's Fiscal Year 2006 BSM Expenditure Plan: 
- III: IRS Reported Project Cost/Schedule Changes: 

Introduction and Objectives: 

The Internal Revenue Service (IRS) has long relied on obsolete 
automated systems for key operational and financial management 
functions, and its attempts to modernize these computer systems span 
several decades. IRS's multibillion-dollar Business Systems 
Modernization (BSM) program, initiated in fiscal year 1999, is the 
agency's latest attempt to modernize its systems. IRS contracted with 
Computer Sciences Corporation (CSC) as the prime systems integration 
support (PRIME) contractor to assist with designing, developing, and 
integrating a new set of information systems that are intended to 
replace IRS's aging business and tax processing systems. BSM is a high- 
risk, highly complex program that involves the development and delivery 
of a number of modernized tax administration, internal management, and 
core infrastructure projects that are intended to provide improved and 
expanded service to taxpayers as well as IRS internal business 
efficiencies. 

As mandated by IRS's fiscal year 2005 appropriations act, [NOTE 1] BSM 
funds are not available until IRS submits a modernization expenditure 
plan for approval to the congressional appropriations committees. This 
plan must: 

* meet the capital planning and investment control review requirements 
established by the Office of Management and Budget (OMB); 

* comply with IRS's enterprise architecture; [NOTE 2] 

* conform with IRS's enterprise life cycle methodology; [NOTE 3] 

* comply with federal acquisition rules, requirements, guidelines, and 
systems acquisition management practices; 

* be approved by IRS, Treasury, and OMB; and be reviewed by GAO. 

NOTES: 

[1] Pub. Law 108-447, Div. H, Title II, Dec. 8, 2004. Currently, IRS's 
fiscal year 2006 funding is provided under a Current Resolution, Pub. 
Law 109-77, Sept. 30, 2005, as amended by H.J. Res. 72, Nov. 19, 2005, 
which continues BSIVI's funding subject to the "authority and 
conditions" provided in the fiscal year 2005 appropriations act. 

[2] An enterprise architecture (EA) is an institutional blueprint 
defining how an enterprise operates today, in both business and 
technology terms, and intends to operate in the future. An EA also 
includes a roadmap for transitioning between these environments. 

[3] IRS refers to its life cycle management program as the enterprise 
life cycle (ELC). 

Since mid-1999, IRS has submitted a series of expenditure or "spending" 
plans requesting release of BSM appropriated funds. To date, about $1.9 
billion has been appropriated and released for BSM. 

On October 12, 2005, IRS submitted its fiscal year 2006 expenditure 
plan to the relevant House and Senate appropriations subcommittees, 
seeking release of $199 million from the BSM account. 

As agreed with IRS's appropriations subcommittees, our objectives were 
to: 

* determine whether IRS's fiscal year 2006 expenditure plan satisfies 
the legislative conditions specified in IRS's appropriations act and: 

* provide any other observations about the plan and IRS's BSM program. 

Results in Brief: 

IRS's fiscal year 2006 plan satisfies each of the six legislative 
conditions. 

We have five observations related to the BSM program and fiscal year 
2006 expenditure plan: 

* IRS Has Made Further Progress in Implementing BSM, but Some Projects 
Did Not Meet Short-Term Cost and Schedule Commitments. During 2005, IRS 
deployed additional releases of several systems, including the Customer 
Account Data Engine (the new taxpayer information database), e-Services 
(a new Web portal and electronic services for tax practitioners), and 
Modernized e-File (a new electronic filing system). While three project 
releases were delivered within the cost and/or schedule commitments 
presented in the fiscal year 2005 expenditure plan, others experienced 
cost increases or schedule delays. 

* Future BSM Project Deliveries Face Significant Risks and Issues, 
which IRS is Addressing. IRS has identified significant risks and 
issues with its future planned system deliveries. The agency, however, 
recognizes the potential impact of these project risks and issues on 
its ability to deliver planned functionality within cost and schedule 
estimates, and, to its credit, has developed mitigation strategies to 
address them. 

* IRS Has Made Additional Progress in Addressing High-Priority BSM 
Program Improvement Initiatives. IRS's high priority improvement 
initiatives appear to be an effective means of assessing, prioritizing, 
and addressing BSM issues and challenges. However, much more work 
remains for IRS to fully address these issues and challenges. 

* IRS is Developing a New Modernization Vision and Strategy. In 
response to our prior recommendation, IRS reports having efforts 
underway to develop a new Modernization Vision and Strategy. IRS 
anticipates having an approved high-level Vision and Strategy in place 
in early fiscal year 2006, and expects to complete a more detailed 5-
year plan for the modernization program by mid-March 2006. 

* The Expenditure Plan Submitted to the Congress Contains Outdated 
Program Status Information and Omits Key Details Concerning Deferred 
BSM Project Functionality. IRS's fiscal year 2006 expenditure plan is 
substantially based on information describing the status of BSM 
projects and program management initiatives as of April 2005, and, 
therefore, in key areas did not adequately describe progress or provide 
information consistent with the program's status at the time the plan 
was submitted to the Congress in October 2005. Specifically, the plan 
(1) does not disclose that planned functionality for two BSM project 
releases has been deferred to future releases and (2) contains a number 
of inconsistencies between project cost and schedule data shown 
throughout the document. Without current and complete information, 
effective congressional oversight of BSM progress and accountability is 
impaired. 

To allow for effective congressional oversight of the BSM program, we 
are recommending that the Commissioner of Internal Revenue direct the 
Chief Information Officer (CIO) to ensure that future expenditure plans 
submitted to IRS's appropriations subcommittees provide current and 
complete program status information and report any changes to prior 
commitments concerning the delivery of BSM project functionality. 

In commenting on a draft of this briefing, the Associate CIO for BSM 
stated that he appreciated the reasoned and balanced work of the GAO 
and believed that the briefing fairly represents BSM accomplishments as 
well as future risks. He also agreed with the recommendation and 
provided technical comments. 

To date, we have reviewed and reported on 12 requests for BSM funding 
releases: 

Since mid-1999, we have reported [NOTE 4] on the risks associated with 
IRS's approach of building systems while concurrently developing and 
implementing program management capabilities-for example, having a 
fully operational program management office and implementing its 
enterprise life cycle (ELC) methodology. IRS's ELC is a structured 
method for managing system modernization program and project 
investments throughout their life cycles. We reported that attempting 
to acquire modernized systems before having the requisite management 
capability increases the risk that systems will experience cost, 
schedule, and performance shortfalls. In addition, we have noted 
numerous modernization management control deficiencies and made 
recommendations to correct them. 

We have also reported [NOTE 5] that the risk of cost increases and 
schedule delays associated with building systems without the requisite 
management controls is not as severe early in projects' life cycles 
when they are being planned (project definition and preliminary system 
design), but escalates as projects are built (detailed design and 
development) and implemented (deployment). In the case of IRS and its 
ELC, a key point of risk escalation is milestone 3, at the end of the 
system architecture phase. From this point through design and 
development (milestone 4) to system deployment (milestone 5), risk will 
increase significantly if requisite controls are not in place. In 
February 2002, we reported that as IRS moved forward with its BSM 
program, it faced increasing risks that it would be unable to deliver 
promised system capabilities on time and within budget. To address the 
escalating risks facing IRS, we recommended that the agency reconsider 
the planned scope and pace of the BSM program with the goal of better 
balancing the number of system acquisition projects underway and 
planned with IRS's capacity to manage the workload. 

* In our June 2003 report, [NOTE 6] we identified key IRS projects that 
were approaching or had passed milestone 4 that were experiencing cost, 
schedule, and performance shortfalls, and concluded that program risks 
were heightened. In our November 2004 report, [NOTE 7] we stated that 
key agency projects were continuing to incur significant cost increases 
and schedule delays, and that independent assessments of the BSM 
program had identified significant weaknesses and risks, consistent 
with our prior reviews. 

* In our July 2005 report, [NOTE 8] we noted that IRS had made progress 
in implementing our prior recommendations to improve its modernization 
management controls and capabilities; however, certain controls and 
capabilities related to configuration management, human capital 
management, cost and schedule estimating, contract management, and post-
implementation reviews had not yet been fully implemented or 
institutionalized. In addition, we noted that IRS had made progress 
toward addressing issues raised in independent BSM assessments and 
implementing program improvement initiatives, but significant 
challenges and high-priority risks remained. 

We also reported that although IRS had deployed the initial phases of 
several modernized systems and met short-term cost and schedule 
estimates, much more work remained to be done to complete the 
modernization, and challenges confronted the agency in meeting its 
longer-term cost and schedule estimates. In addition, we reported that 
in response to its assessment of the PRIME contractor's performance and 
budget reductions, IRS (1) was shifting significant BSM program 
responsibilities from the contractor to the agency, and (2) had made 
adjustments to project funding allocations and future delivery 
schedules, including suspending work on the Custodial Accounting 
Project and postponing future releases of the Integrated Financial 
System indefinitely. Finally, we concluded that the BSM vision and 
strategy was no longer current given project delays, and recommended 
that the agency fully revisit it and develop a new set of long-term 
program goals, strategies, and plans that is consistent with the 
budgetary outlook and IRS's management capabilities. 

IRS's fiscal year 2006 expenditure plan describes the agency's efforts 
to 

* continue ongoing program-level initiatives (e.g., Architecture & 
Integration, Program Management) through the first week of November 
2006 and core infrastructure projects (e.g., Infrastructure Shared 
Services) through the end of November 2006, 

* continue five tax administration project releases (Filing and Payment 
Compliance Release 1.1, Modernized e-File Releases 3.2 and 4, and 
Customer Account Data Engine - Individual Master File Releases 1.3.2 
and 2) to their next milestones, and: 

* begin three new tax administration project releases (Filing and 
Payment Compliance Release 1.2 and Customer Account Data Engine - 
Individual Master File Releases 2.1 and 2.2). 

Table 1 shows a financial summary of the plan. 

Table 1: Summary of IRS's Fiscal Year 2006 BSIVI Expenditure Plan (in 
thousands of dollars)[A]: 

[See PDF for image] 

Source: IRS. 

[A] See appendix I for a description of each BSM project and program- 
level initiative. See appendix II for additional detail on the plan. 

[B] The two categories under this heading include seven separate 
projects or project releases. 

[End of table] 

NOTES: 

[4] For example, see GAO, Business Systems Modernization: Results of 
Review of IRS' March 2001 Expenditure Plan, GAO-01-716 (Washington, 
D.C.: June 29, 2001) and Internal Revenue Service: Progress Continues 
But Serious Management Challenges Remain, GAO-01-562T (Washington, 
D.C.: April 2, 2001). 

[5] For example, see GAO, Tax Systems Modernization: Results of Review 
of IRS' Third Expenditure Plan, GAO-01-227 (Washington, D.C.: January 
22, 2001) and Business Systems Modernization: IRS Needs to Better 
Balance Management Capacity with Systems Acquisition Workload, GAO-02-
356 (Washington, D.C.: February 28, 2002). 

[6] GAO, Business Systems Modernization: IRS Has Made Significant 
Progress in Improving Its Management Controls, but Risks Remain, GAO-03-
768 (Washington, D.C.: June 27, 2003). 

[7] GAO, Business Systems Modernization: IRS's Fiscal Year 2004 
Expenditure Plan, GAO-05-46 (Washington, D.C.: November 17, 2004). 

[8] GAO, Business Systems Modernization: Internal Revenue Service's 
Fiscal Year 2005 Expenditure Plan, GAO-05-774 (Washington, D.C.: July 
22, 2005). 

Scope and Methodology: 

To accomplish our objectives, we: 

* reviewed the fiscal year 2006 expenditure plan submitted by IRS in 
October 2005; 

* analyzed the plan against the legislative conditions to identify any 
variances; 

* interviewed IRS program and project management officials to 
corroborate our understanding of the plan and other BSIVI activities; 

* reviewed and analyzed modernization program review and project 
management reports, briefings, and related documentation to assess 
program/project status and associated issues and risks; and: 

* reviewed program management reports, briefings, and related 
documentation to assess the progress IRS has made in completing actions 
and implementing program management improvements related to the BSIVI 
Highest Priority Initiatives. 

We did not assess IRS's progress in implementing our prior 
recommendations to improve its modernization management controls and 
capabilities (i.e., configuration management, human capital management, 
cost and schedule estimation, contract management, and post-
implementation reviews) as a part of this review, since we recently 
reported on the status of IRS's ongoing actions to address them. [NOTE 
9] 

To assess the reliability of the cost and schedule information 
contained in this expenditure plan, we interviewed IRS officials in 
order to gain an understanding of the data and discuss our use of the 
data. In addition, we checked that information in the plan was 
consistent with information contained in IRS internal briefings. 

We performed our work from October through November 2005, in 
Washington, D.C., in accordance with generally accepted government 
auditing standards. 

NOTE: 

[9] See GAO-05-774 for details. 

Results: 

Objective 1: The plan satisfies the conditions in IRS's Fiscal Year 
2006 appropriations act. 

Table 2: Fiscal Year 2006 Expenditure Plan Provisions for Satisfying 
Legislative Conditions: 

[See PDF for image] 

Source: IRS's fiscal year 2005 appropriations act (Pub. Law 108-447), 
fiscal year 2006 Current Resolution (Pub. Law 109-77), and GAO 
analysis. 

[A] These are acquisition planning, solicitation, requirements 
development and management, project management, contract tracking and 
oversight, evaluation, and transition to support. 

[End of table] 

Objective 2: Observations about IRS's BSM Program and Expenditure Plan: 

Observation 1: IRS Has Made Further Progress in Implementing BSM, but 
Some Projects Did Not Meet Short-Term Cost and Schedule Commitments: 

During 2005, IRS's BSM program has deployed additional releases of 
several modernized systems that have delivered benefits to taxpayers 
and the agency, including the following: 

* Customer Account Data Engine (CADE) - Individual Master File [NOTE 
10] Release 1. [NOTE 11] CADE is intended to replace IRS's antiquated 
system that contains the repository of taxpayer information and, 
therefore, is the BSM program's linchpin and highest priority project. 
In January and September 2005, IRS implemented Releases 1.2 and 1.3.1 
of CADE, respectively, which have been used to process filing year 2005 
1040EZ returns for single taxpayers with refund or even-balance tax 
returns. According to IRS, CADE has processed over 1.4 million tax 
returns and generated over $426 million in refunds so far this filing 
season (as of August 26, 2005), and has significantly reduced the cycle 
time for processing and issuing refunds for 1040EZs filed 
electronically. 

* e-Services. This project created a Web portal and provided other 
electronic services to promote the goal of conducting most IRS 
transactions with taxpayers and tax practitioners electronically. In 
August 2005, IRS deployed an upgrade to the e-Services PeopleSoft 
software platform and approved the project's transition to operations 
and maintenance. According to IRS, as of early November 2005, over 
93,000 users have registered with this Web portal, and the use of on-
line services by practitioners has resulted in IRS operational 
efficiencies estimated at nearly $1.8 million. 

* Modernized e-File (MeF). This project is intended to provide 
electronic filing for large corporations, small businesses, and tax- 
exempt organizations. In March 2005, IRS completed MeF Release 3.1, 
which allows for the electronic filing of Form 7004 (Application for 
Automatic Extension of Time to File Corporation Income Tax Return) and 
Form 990PF (Return of Private Foundation). IRS reported that, during 
the 2005 filing season, over 220,000 return submissions have been 
accepted using MeF. 

In addition to these system deliveries, in March 2005, IRS launched the 
Submission and Settlement Harvesting Project, which is the agency's 
first business rules harvesting [NOTE 12] initiative. This project was 
chartered to reengineer the submission and settlement process and to 
harvest business rules sets in support of CADE Release 3. According to 
IRS, the effort has harvested over 1000 business rules sets and 
identified several improvement opportunities to streamline the 
submission process and increase efficiency. This activity was completed 
in November 2005. 

While IRS made progress in meeting cost and schedule commitments for 
completed and ongoing project releases during 2005, some projects 
experienced significant cost increases and schedule delays. For 
example, our comparison of IRS's reported costs and ELC milestone 
completion dates presented in the fiscal year 2005 (April 2005) and 
fiscal year 2006 (October 2005) expenditure plans shows that CADE 
Release 1.3.1 was delivered at the estimated cost and that the e- 
Services upgrade and Milestone 5 exit were completed on time and within 
the estimated project costs. However, two project segments-Integrated 
Financial System Release 1, Milestone 5 and MeF Release 3.2, Milestone 
4-experienced significant cost increases of 93% and 29%, respectively, 
against commitments shown in the fiscal year 2005 plan. In addition, 
CADE Release 1.3.1 took 24% longer to complete than expected. Appendix 
III provides the complete list of BSM project cost and schedule changes 
reported by IRS. 

In July 2005, we reported [NOTE 13] that the BSM program has had a 
history of cost increases and schedule delays that have been due, at 
least in part, to deficiencies in various management controls and 
capabilities that have not yet been fully corrected. As noted earlier 
in this briefing, IRS is currently addressing our prior recommendations 
to correct these deficiencies. 

Observation 2: Future BSM Project Deliveries Face Significant Risks and 
Issues, which IRS is Addressing. 

IRS has reported that significant challenges and risks confront future 
planned system deliveries. For example, 

* Customer Account Data Engine - Individual Master File Release 1.3.2. 
IRS has reported that unanticipated tax law changes, including 2005 
disaster-related legislation, could impact the development and testing 
schedules for Release 1.3.2, which is expected to be delivered in 
January 2006. 

* Customer Account Data Engine - Individual Master File Release 2. 
According to IRS, schedule slippages associated with Release 1.3.1 as 
well as contention for key resources between Releases 1.3.1 and 1.3.2 
necessitated the deferral of some Release 1.3.2 functionality to later 
releases. These requirements deferrals may negatively impact cost and 
schedule for Releases 2.1 and 2.2, which are currently scheduled to be 
deployed in August 2006 and December 2006, respectively. Also, IRS has 
indicated that contention for key development resources currently 
working on Release 1.3.2 may impact Release 2.1 development activities. 

* Filing and Payment Compliance Release 1.1. As a result of a court- 
ordered delay in procuring private collection agencies (PCAs), IRS is 
implementing a two-phase approach for delivering Release 1.1. This 
consists of delivering (1) a Partial Production Environment in January 
2006 (system software delivery) and (2) a Full Production Environment 
in July 2006 (PCAs begin collection efforts). The targeted delivery 
date for the Full Production Environment hinges on the timely award of 
the PCA contract. IRS reports that schedule delays could occur if (1) 
PCA evaluation, selection, and contract award is delayed and/or (2) PCA 
background investigations are not completed in a timely manner. 

* Filing and Payment Compliance Release 1.2. IRS reports that Release 
1.2, which is scheduled to be deployed in January 2007, faces a number 
of risks. For example, requirements for Release 1.2 are being developed 
using a new methodology/process that has not previously been utilized 
within the IRS modernization environment, thereby creating a risk to 
project schedule and cost should false starts be encountered during the 
refinement of this methodology. 

* Modernized e-File Release 3.2. Release 3.2, which is scheduled for 
deployment in March 2006, also faces high priority issues and critical 
risks, including project staff resources, the system's ability to 
handle the projected volume for filing season 2006, and timely 
completion of transition/training activities. 

IRS recognizes the potential impact of these project risks and issues 
on its ability to deliver planned functionality within cost and 
schedule estimates, and, to its credit, has developed mitigation 
strategies to address them. 

Observation 3: IRS Has Made Additional Progress in Addressing High- 
Priority BSM Program Improvement Initiatives. 

As a result of continued cost overruns and schedule delays in the BSM 
program, during the summer of 2003, IRS and the PRIME contractor, CSC, 
initiated three external independent studies and one IRS internal 
analysis to assess the effectiveness of the BSM program and to review 
the CADE project. 

During 2004, after assessing various aspects of the BSM program and 
reviewing the four BSM studies as well as prior GAO and TIGTA reports, 
the Associate CIO for BSM identified key barriers to success in the BSM 
program and created a plan to address these barriers. 

The Associate CIO established the following seven key focus areas for 
improving IRS's capability to design, develop, and deliver modernized 
IT systems: 

* Staffing and Skill Sets, 
* Contractor Management, 
* Requirements and Demand Management, 
* Systems Engineering, 
* Project Management Disciplines, 
* Communication and Collaboration, and 
* Empowerment/Accountability. 

He then mapped (1) GAO/TIGTA recommended corrective actions for 
improving modernization management controls and processes, and (2) 
several additional IRS-defined improvement initiatives to these key 
focus areas to form a BSM program improvement framework. 

In August 2004, the Associate CIO identified 16 "highest priority 
initiatives" from the program improvement framework that were to be 
completed by the end of January 2005. In March 2005, IRS reported that 
12 of the 16 initial highest priority initiatives had been completed 
and closed. The remaining 4 initiatives were carried forward with 13 
newly selected highest priority improvement initiatives for a total of 
17, which were planned to be completed by early September 2005. 

In October 2005, IRS reported that 15 of the 17 highest priority 
initiatives had been completed and closed, including several 
initiatives related to the shift in the role of systems integrator from 
the PRIME contractor to IRS as well as efforts to complete a human 
capital strategy and recruiting plan, strengthen IRS's systems 
engineering capability, hire a technical lead for the BSM program, and 
establish the requirements management and business rules management 
[NOTE 14] operations. The remaining 2 ongoing initiatives related to 
(1) ensuring that BSM staff are trained in required project management 
skills (e.g., schedule analysis, earned value, testing monitoring) and 
(2) revising the change request process to reflect IRS's role as 
systems integrator have been carried over to the next 6-month cycle. 

In addition to the 2 initiatives carried forward, IRS is currently 
focusing on 20 newly selected highest priority improvement initiatives 
for a total of 22, which are planned to be completed by the end of 
March 2006. These initiatives include: 

* building on the current effort to develop a new Modernization Vision 
and Strategy, 

* establishing requirements management standards, 

* upgrading the enterprise life cycle methodology to provide more 
guidance to projects, 

* executing the implementation plan for integrated master schedule and 
baseline management, and 

* awarding a contract to acquire a business rules management 
repository. 

This program improvement process appears to be a reasonable means of 
regularly assessing and prioritizing and, hopefully, addressing BSM 
issues and challenges. It should be noted, however, that it is an 
incremental approach and that it can take several iterations of 
initiatives to fully address issues within the key focus areas for 
program improvement established by the Associate CIO for BSM. For 
example, as noted above, IRS reported that it recently completed and 
closed an initiative to establish a Requirements Management Office, and 
is currently focusing on a follow-on initiative to further develop its 
requirements management capabilities. 

Observation 4: IRS is Developing a New Modernization Vision and 
Strategy. 

In July 2005, we reported [NOTE 15] that the significant delays and 
other substantive changes that the BSM program had experienced since 
the development of the initial BSM vision and strategy in 2000 and 2001 
indicated a need for IRS to revisit its long-term goals, strategies, 
and plans for the modernization program. To address the many changes 
associated with the BSM and clearly describe what the modernization 
program is intended to accomplish, when it will be completed, and at 
what cost, we recommended that IRS fully revisit the vision and 
strategy for the BSM program and develop a new set of long-term goals, 
strategies, and plans consistent with the budgetary outlook and IRS's 
management capabilities. 

In commenting on a draft of our report, IRS agreed with our 
recommendation and indicated that it had begun a planning effort to 
revise its IT modernization strategy and approach. The agency also 
stated that it would be updating the Enterprise Transition Strategy and 
Release Architecture portions of the IRS Enterprise Architecture as a 
part of this effort. At that time, IRS intended to have the high-level 
strategy, goals, and plans in place by the end of fiscal year 2005, and 
to complete a more detailed engineering analysis and sequencing 
strategies during the first quarter of fiscal year 2006. 

As of October 2005, IRS reported that it had (1) developed a set of IT 
modernization goals for the year 2010 that align with and support the 
agency's strategic plan, and (2) formed a multi-disciplinary team of IT 
and business specialists to develop a modernization roadmap to guide 
the agency toward meeting its goals incrementally, while providing near-
term business value. IRS stated that this roadmap will consider the 
current state of IRS's IT infrastructure and take a realistic view of 
the IT funding profile through 2010. Once approved, this plan is 
intended to enable IRS to move forward with a set of well-coordinated 
modernization initiatives, and will serve as the framework for 
approving new IT projects. 

According to the Associate CIO for BSM, IRS's new Modernization Vision 
and Strategy focuses on promoting investments that provide value in 
smaller, incremental releases that are delivered more frequently, with 
the goal of increasing business value while investing in solutions that 
reduce complexity and costs. It is organized and prioritized around 
"domains" that represent a functional, rather than organizational, view 
of the business. The domain priorities have been established to focus 
on front-line tax administration, emphasizing enforcement and customer 
service needs. 

IRS's new Vision and Strategy is intended to include a 5-year plan that 
will establish a technical strategy and identify investment priorities 
and a timeline for implementation. According to IRS, the business focus 
areas for modernization in the next five years include: 

* addressing the tax gap; 

* expanding electronic filing; 

* increasing accuracy, maintaining service levels, and reducing 
customer service costs; and: 

* enabling IRS systems to change quickly in response to business needs. 

From an IT perspective, the plan will focus on using existing systems 
to deliver business functions and capabilities, including: 

* decision analytics; 

* tools and data management capabilities to manage cases; 

* applications that allow taxpayer self-service and communications with 
IRS via the Internet; and: 

* standard, reusable tools to access and update tax administration 
data. 

IRS anticipates having an approved high-level Vision and Strategy in 
place in early fiscal year 2006, and expects to complete its more 
detailed 5-year plan for the modernization program by mid-March 2006. 
We believe these actions represent good steps towards addressing our 
prior recommendation to fully revisit the vision and strategy for the 
BSM program and develop a new set of long-term goals, strategies, and 
plans consistent with the budgetary outlook and IRS's management 
capabilities. 

Observation 5: The Expenditure Plan Submitted to the Congress Contains 
Outdated Program Status Information and Omits Key Details Concerning 
Deferred BSM Project Functionality. 

As we have previously reported, [NOTE 16] to permit meaningful 
congressional oversight, it is important that expenditure plans 
describe how well the BSM program is progressing against the 
commitments made in prior expenditure plans. However, IRS's fiscal year 
2006 expenditure plan is substantially based on information describing 
the status of BSM projects and program management initiatives as of 
April 2005, and, therefore, in key areas did not adequately describe 
progress or provide information consistent with the program's status at 
the time the plan was submitted to the Congress in October 2005. In 
particular, the fiscal year 2006 expenditure plan: 

* does not disclose that planned functionality for two major BSM 
project releases-CADE Release 1.3.2 and Modernized e-File Release 4-has 
been deferred to future releases, thereby postponing the delivery of 
taxpayer benefits. 

* contains a number of inconsistencies between project cost and 
schedule data shown throughout the document. For example, the 
information provided in a program results summary table in the 
Executive Summary does not match the cost and schedule data provided in 
the plan's detailed project profiles for the Filing and Payment 
Compliance and Modernized e-File projects, respectively. In addition, 
changes to cost estimates for the Integrated Financial System and 
Custodial Accounting Project noted in a summary table at the end of the 
plan are not reflected in the respective project profiles. 

IRS officials acknowledged the weaknesses we identified with their 
expenditure plan and subsequently revised the plan to include updated 
information, clarifications, and corrections where appropriate. 
However, they did not provide the updated plan to the Congress. IRS 
also acknowledged the importance of providing timely data and has 
initiated efforts to establish and implement a policy and process to 
allow for near real-time updating of the expenditure plan while it is 
being reviewed by both internal and external stakeholders. They did 
not, however, identify specific timeframes for putting this policy and 
process in place. Without current and complete program status 
information, meaningful congressional oversight of BSM progress and 
accountability is impaired. 

NOTES: 

[10] CADE will include the modernized database foundation to replace 
the current master files processing systems, which are the agency's 
repository of taxpayer information. There are master files for 
individuals, businesses, and employer retirement plans. CADE is 
expected to facilitate faster refund processing and more timely 
response to taxpayer inquiries. 

[11] Release 1 includes five segments. Release 1.0, the base release of 
1040 EZ functionality, was deployed in July 2004. Release 1.1, also 
deployed in July 2004 (concurrent with Release 1.0), contained filing 
season 2003 and 2004 tax law changes. Release 1.2, deployed in January 
2005, included filing season 2005 changes. Release 1.3.1, deployed in 
September 2005, included new functionality to improve performance, 
allow address changes on tax returns, and implement initial filing 
season 2006 tax law changes. Release 1.3.2, scheduled to be deployed in 
January 2006, will include the remaining filing season 2006 tax law 
changes and some additional functionality such as processing basic 1040 
returns with no Schedules. 

[12] Business rules harvesting refers to the process of extracting, 
defining, and documenting tax processing criteria (e.g., income tax 
refunds of $x or more are held for administrative review) from a 
variety of sources, including IRS subject matter experts, legacy system 
source code, the tax code, and various other paper documents. 

[13] GAO-05-774. 

[14] In conjunction with the business rules management initiative, IRS 
completed a Business Rules End-to-End Prototype project. The objectives 
of this effort were to (1) validate the business rules development and 
management methodology and (2) assess when a business rules engine is 
an appropriate solution for CADE and when other programming languages 
(e.g., C++) should be used. A business rules engine translates business 
rules or processing criteria into executable computer code that 
processes transactions related to a tax form, and selects and executes 
correct rules based on the tax year and tax form. The prototype project 
determined that applying the full business rules management methodology 
for harvesting business rules would significantly challenge IRS's 
capacity, costs, and timelines to complete the CADE project (e.g., an 
estimated 100 staff years are required to do full harvesting and create 
the full set of models for the estimated 25,000 business rules embedded 
in the current individual master file), and recommended using a 
streamlined approach whenever possible to capture and document existing 
business rules. This effort also determined that business rules can be 
implemented effectively without a business rules engine, and 
recommended that a business rules engine not be used for any CADE 
applications, except for possibly implementing the fraud detection 
rules. 

[15] GAO-05-774. 

[16] See GAO, Tax Systems Modernization: Results of Review of IRS' 
Initial Expenditure Plan, GAO/AIMD-99-206 (Washington, D.C.: June 15, 
1999), GAO-01-227, and GAO-02-356. 

Conclusions: 

IRS's fiscal year 2006 plan satisfies the legislative conditions. 

IRS has made further progress in implementing BSM during 2005, but some 
projects did not meet short-term cost and schedule commitments. Future 
project deliveries face significant risks and issues, which the agency 
is actively working to mitigate. In addition, IRS has significant 
program challenges and issues that it must resolve, and has established 
an incremental program improvement process to assess, prioritize, and 
address them. The new vision and strategy that IRS is currently 
developing represents a good step towards developing information for 
the Congress on future plans for the modernization program. However, 
key information provided in the fiscal year 2006 expenditure plan 
submitted to the Congress is outdated and incomplete, which inhibits 
effective congressional oversight of BSM progress. 

Recommendation for Executive Action: 

To allow for effective congressional oversight of the BSM program, we 
recommend that the Commissioner of Internal Revenue direct the CIO to 
take the following action: 

* ensure that future expenditure plans submitted to IRS's 
appropriations subcommittees provide current and complete program 
status information and report any changes to prior commitments 
concerning the delivery of BSM project functionality. 

Agency Comments: 

In providing oral comments on a draft of this briefing, the Associate 
CIO for BSM stated that he appreciated the reasoned and balanced work 
of the GAO and believed that the briefing fairly represents BSM 
accomplishments as well as future risks. He agreed with the 
recommendation addressing the timeliness and completeness of the 
expenditure plan data and the importance of timely data for meaningful 
oversight. He stated that IRS plans to propose a new policy to increase 
the visibility and timeliness of changes to the plan and expedite its 
review process. He also provided specific technical comments that we 
have incorporated into the briefing, as appropriate. 

Appendix I: Description of Business Systems Modernization (BSM) 
Projects and Program-Level Initiatives: 

[See PDF for image] 

Source: IRS. 

[End of table] 

[End of section] 

Appendix II: Additional Detail on IRS's Fiscal Year 2006 BSM 
Expenditure Plan (in thousands of dollars): 

[See PDF for image] 

Source: IRS. 

[End of table] 

[End of section] 

Appendix III: IRS Reported Project Cost/Schedule Changes: 

[See PDF for image] 

Source: IRS. 

[End of table] 

[End of section] 

Appendix II: Comments from the Internal Revenue Service: 

DEPARTMENT OF THE TREASURY: 
INTERNAL REVENUE SERVICE: 
COMMISSIONER: 
WASHINGTON, D.C. 20224: 

February 2, 2006: 

Mr. David Powner: 

Director, Information Technology Management Issues: 
United States Government Accountability Office: 
441 G Street, N.W.: 
Washington, DC 20548: 

Dear Mr. Powner: 

I have reviewed the Government Accountability Office (GAO) draft report 
titled "Review of Internal Revenue Service (IRS) Fiscal Year 2006 
Business Systems Modernization Expenditure Plan" (GAO-03-360, 2006). We 
are pleased the GAO: 

* Validated that we satisfied the six legislative conditions as 
specified in Congressional appropriations; 

* Acknowledged the progress that the IRS has made in areas such as: 

- Implementing our Business Systems Modernization (BSM) program, 

- Mitigating risks, 

- Managing high priority initiatives, and: 

- Developing a new modernization vision and strategy. 

We continue to appreciate the sound and balanced work of the GAO and 
believe that this draft report fairly represents BSM accomplishments as 
well as future risks. We are in particular agreement with your 
recognition of the IRS' improved performance in meeting cost and 
schedule commitments on several of our modernized systems; your 
acknowledgement of the taxpayer and agency value our systems have begun 
to add; your affirmation of the effectiveness of our program 
improvement process; and your endorsement of the steps we have taken to 
develop a Modernization Vision and Strategy (MVS) for the BSM program. 

It is worth noting that since the Expenditure Plan (EP) was submitted, 
we expect the Integrated Financial Systems (IFS) project to return 
between $4 and $5 million to the BSM management reserve. Therefore, the 
93 percent reported overrun in the last EP will be reduced. This 
further demonstrates the noted improvement we have made in working to 
control costs within the BSM program. 

We also agree with your observation that although we have in place an 
effective means of assessing, prioritizing, and addressing the BSM 
issues, risks and challenges, continued improvements are needed to 
fully address them. 

I would like to briefly comment on your report's recommendation: "To 
allow for effective Congressional oversight for the BSM program, we 
recommend that the Commissioner of the Internal Revenue Service direct 
the CIO to take the following action: Ensure that future Expenditure 
Plans submitted to IRS's appropriations subcommittees provide current 
and complete program status information and report any changes to prior 
commitments concerning the delivery of BSM project functionality." 

The IRS agrees that timely data is important to meaningful oversight. 
In response to GAO's concerns, we provided GAO with an EP that all 
stakeholders, both internal and external to the IRS, had reviewed and 
approved. We also provided additional information in response to all of 
the questions raised by GAO during their review of the EP. This 
included providing documentation, clarifications, and corrections where 
appropriate. 

Nevertheless, to ensure that near real-time updates are made to future 
EPs during the development and review process, we are formulating a 
policy to raise the visibility of changes to EP data, and requiring 
prompt notification that such changes are in process. Additionally, on 
January 24, 2006, the Committee on Appropriations directed the IRS to 
work with the Department of Treasury and Office of Management and 
Budget (OMB) on issues concerning EP timelines and processes. We have 
already initiated dialogue with Treasury and OMB on how we can 
proactively resolve timeline and process issues. We believe these steps 
will address your recommendation. 

We appreciate your continued support and the assistance and guidance 
from your staff. If you have any questions, or if you would like to 
discuss our response in more detail, please contact W. Todd Grams, 
Chief Information Officer, at (202) 622-6800. 

Sincerely, 

Signed by: 

Mark W. Everson: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David A. Powner, (202) 512-9286: 

Staff Acknowledgments: 

In addition to the contact named above, Timothy D. Hopkins and Sabine 
R. Paul made key contributions to this report. 

(310809): 

FOOTNOTES 

[1] BSM funds are unavailable until IRS submits to congressional 
appropriations committees for approval a modernization expenditure plan 
that (1) meets the Office of Management and Budget's (OMB) capital 
planning and investment control review requirements; (2) complies with 
IRS's enterprise architecture; (3) conforms with IRS's enterprise life- 
cycle methodology; (4) complies with federal acquisition rules, 
requirements, guidelines, and systems acquisition management practices; 
(5) is approved by IRS, the Department of the Treasury, and OMB; and 
(6) is reviewed by GAO. See Pub. Law No. 109-115, Div. A, Title II, 
November 30, 2005, for fiscal year 2006 funding. 

[2] According to IRS, the high-level Vision and Strategy and the 5-year 
modernization plan are now both expected to be completed by mid-March 
2006. 

GAO's Mission: 

The Government Accountability Office, the investigative arm of 
Congress, exists to support Congress in meeting its constitutional 
responsibilities and to help improve the performance and accountability 
of the federal government for the American people. GAO examines the use 
of public funds; evaluates federal programs and policies; and provides 
analyses, recommendations, and other assistance to help Congress make 
informed oversight, policy, and funding decisions. GAO's commitment to 
good government is reflected in its core values of accountability, 
integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains 
abstracts and full-text files of current reports and testimony and an 
expanding archive of older products. The Web site features a search 
engine to help you locate documents using key words and phrases. You 
can print these documents in their entirety, including charts and other 
graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 
correspondence. GAO posts this list, known as "Today's Reports," on its 
Web site daily. The list contains links to the full-text document 
files. To have GAO e-mail this list to you every afternoon, go to 
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order 
GAO Products" heading. 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548: 

To order by Phone: 

Voice: (202) 512-6000: 

TDD: (202) 512-2537: 

Fax: (202) 512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov 

Automated answering system: (800) 424-5454 or (202) 512-7470: 

Public Affairs: 

Jeff Nelligan, managing director, 

NelliganJ@gao.gov 

(202) 512-4800 

U.S. Government Accountability Office, 

441 G Street NW, Room 7149 

Washington, D.C. 20548: