Tax Systems Modernization:

Blueprint Is a Good Start But Not Yet Sufficiently Complete to Build or Acquire Systems

AIMD/GGD-98-54: Published: Feb 24, 1998. Publicly Released: Feb 24, 1998.

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Pursuant to a congressional request, GAO reviewed the modernization blueprint that the Internal Revenue Service (IRS) prepared pursuant to the conference report accompanying the fiscal year 1997 Omnibus Consolidated Appropriations Act.

GAO noted that: (1) IRS' May 15, 1997, modernization blueprint is a good first step and provides a solid foundation from which to determine precise business requirements, a complete target architecture, and a discipline set of processes and detailed plans for validating, implementing, and enforcing the architecture; (2) similarly, the blueprint's business requirements specify needed improvements in such areas as financial management, and the architecture and sequencing plan include several positive attributes, including traceability between business requirements and systems and high-level descriptions of data and security subarchitectures; (3) however, the blueprint is not yet complete and does not provide sufficient detail and precision for building or acquiring new systems; (4) in particular, IRS' systems life cycle (SLC) does not define in sufficient detail any of the SLC processes needed to manage technology investments; (5) as a result, IRS does not yet know: (a) how systems will actually be designed, developed, tested, or acquired; (b) how compliance with standards will be assessed and ensured; (c) how progress on projects will be determined; or (d) how key SLC products will be validated; (6) additionally, IRS plans for each of the three remaining blueprint components--business requirements, architecture, and sequencing plan--to include four levels of progressively greater detail; (7) as of May 15, 1997, IRS had completed the first two levels; (8) as a result, information that is critical to effective and efficient systems modernization is not yet known, essential decisions have not yet been made, and needed actions have not yet been taken; (9) IRS' Chief Information Officer (CIO) has acknowledged that essential elements are missing from the May 15, 1997, blueprint, and stated that he has begun addressing these voids; (10) however, even though IRS has given the CIO increased responsibility and accountability for managing and controlling systems development, acquisition, and maintenance, neither the CIO nor any other IRS organizational entity has budgetary and organizational authority over all IRS systems activities; and (11) as a result, it is unlikely that IRS will be able to institutionally implement and enforce its modernization blueprint once it is completed.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In March 2000, IRS initiated efforts to complete its enterprise architecture (EA). These efforts included (1) updating business requirements via vision and strategy working groups established to restructure and reengineer IRS business areas, and (2) integrating vision and strategy results with efforts to specify the technology framework within which to modernize the systems to support IRS business areas. IRS planned to develop and issue the EA in 3 releases (1.0, 1,1, and 2.0). Each release was intended to provide incrementally more architectural definition and utility. IRS issued EA 1.0 and 1.1 in January 2001 and June 2001, respectively.

    Recommendation: To ensure that IRS develops a complete blueprint for modernizing its information systems, the Commissioner of Internal Revenue should require the IRS CIO to, for each phase of the modernization, define business requirements and complete the architecture with sufficient detail and precision to build or acquire systems.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: In conjunction with its efforts to develop versions 1.0 and 1.1 of its Enterprise Architecture (EA), IRS developed a revised modernization sequencing plan--referred to as a release plan by IRS--for deploying modernized systems and retiring existing capabilities. The revised release plan currently defines the timing, costs, and benefits of future near-term modernization projects planned to be deployed by fiscal year 2003. As part of its efforts to develop EA 2.0, IRS plans to update the release plan by the end of calendar year 2001, to include a plan to address the enterprise transition strategy for fiscal years 2004 through 2006, as well as a long-term plan for fiscal year 2007 and beyond. The release plan is to be incrementally updated in future expenditure plans with more specific cost and benefit information as projects are initiated and business case justifications are developed.

    Recommendation: To ensure that IRS develops a complete blueprint for modernizing its information systems, the Commissioner of Internal Revenue should require the IRS CIO to formulate a sequencing plan that specifies: (1) phase and release cost and schedule estimates; (2) projects that constitute the phases and releases; (3) project cost and schedule estimates; (4) project interdependencies; (5) the evolution of architectural subfunctions; and (6) the projects that replace legacy systems that are eliminated.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: In response to this recommendation, IRS (1) developed processes for validating Enterprise Architecture (EA) releases, and (2) incorporated this process guidance in its ELC methodology. The processes include circulating the EA to affected IRS business owners for review and comment. The guidance also specifies engaging IRS' Federally Funded Research and Development Center contractor (MITRE) to assess the completeness and adequacy using specified process and quality standards. IRS reports that it followed these validation processes during the development of EA releases 1.0 and 1.1 and plans to do the same during the development of EA 2.0.

    Recommendation: To ensure that IRS develops a complete blueprint for modernizing its information systems, the Commissioner of Internal Revenue should require the IRS CIO to validate the business requirements, architecture, and sequencing plan using the completed and implemented SLC processes.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: According to IRS, the CIO is responsible for developing, implementing, and enforcing life-cycle management processes and products across IRS. IRS plans to have the ELC methodology implemented on all modernization projects by mid-2002. Once the ELC is fully implemented, the CIO will be able to enforce ELC policies and processes on all IRS systems development and maintenance efforts.

    Recommendation: To ensure that the modernization blueprint is implemented and enforced agencywide, the Commissioner of Internal Revenue should give the CIO responsibility for developing, implementing, and enforcing SLC processes and products across IRS.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  5. Status: Closed - Implemented

    Comments: Effective October 1, 1998, the Commissioner designated IRS' CIO as the official responsible for managing and controlling all Information Systems (IS) budgetary resources, including those allocated to the Regional and Service Center IS organizations. According to IRS officials, the agency provided the CIO complete organizational authority over all IS components via a Delegation of Authority order dated November 17, 1999.

    Recommendation: To ensure that the modernization blueprint is implemented and enforced agencywide, the Commissioner of Internal Revenue should give the CIO requisite budgetary and organizational authority over all IRS systems development, research and development, and maintenance activities.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  6. Status: Closed - Implemented

    Comments: In June 2002, IRS completed the implementation of mature systems life-cycle processes via its Enterprise Life Cycle. From 1998 to 2002, GAO reviewed IRS's annual information technology budget requests and found that IRS had limited them to cost-effective efforts that support ongoing operations and maintenance.

    Recommendation: Until mature SLC processes for developing and acquiring systems have been implemented across IRS, the Commissioner of Internal Revenue should limit requests for future appropriations for information technology to only cost-effective efforts that support ongoing operations and maintenance, including all efforts to make IRS systems year 2000 compliant.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  7. Status: Closed - Implemented

    Comments: In June 2002, IRS completed the implementation of mature systems life-cycle processes via its Enterprise Life Cycle. From 1998 to 2002, GAO reviewed IRS's annual information technology budget requests and found that IRS had limited them to cost-effective efforts that support ongoing IRS efforts to instill requisite system life cycle management discipline, including completing and enforcing the architecture, institutionalizing disciplined software development and acquisition processes, and improving technology investment management.

    Recommendation: Until mature SLC processes for developing and acquiring systems have been implemented across IRS, the Commissioner of Internal Revenue should limit requests for future appropriations for information technology to only cost-effective efforts that support ongoing IRS efforts to instill requisite SLC discipline, including completing and enforcing the architecture, institutionalizing disciplined software development and acquisition processes, and improving its information technology investment management.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  8. Status: Closed - Implemented

    Comments: In June 2002, IRS completed the implementation of mature systems life-cycle processes via its Enterprise Life Cycle. From 1998 to 2002, GAO reviewed IRS's annual information technology budget requests and found that IRS had limited them to cost-effective efforts that are small, represent low technical risk, and can be delivered in a relatively short time frame.

    Recommendation: Until mature SLC processes for developing and acquiring systems have been implemented across IRS, the Commissioner of Internal Revenue should limit requests for future appropriations for information technology to only cost-effective efforts that are small, represent low technical risk, and can be delivered in a relatively short time frame.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  9. Status: Closed - Implemented

    Comments: To define and implement its System Life Cycle, IRS adopted and tailored a commercially available life-cycle management methodology for use in IRS's environment. IRS refers to the tailored methodology as its Enterprise Life Cycle (ELC). The ELC is to provide IRS with a disciplined and institutional approach for managing its information technology investments throughout their life cycle--from conception, development, and deployment through maintenance and operation. IRS completed the definition of the ELC in April 2001, and subsequently completed ELC implementation in June 2002.

    Recommendation: To ensure that IRS develops a complete blueprint for modernizing its information systems, the Commissioner of Internal Revenue should require the IRS CIO to complete the definition and implementation of all SLC processes, including processes for ensuring disciplined software development and acquisition and for validating SLC products.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  10. Status: Closed - Implemented

    Comments: In June 2002, IRS completed the implementation of mature systems life-cycle processes via its Enterprise Life Cycle. From 1998 to 2002, GAO reviewed IRS's annual information technology budget requests and found that IRS had limited them to cost-effective efforts that involve deploying already developed systems.

    Recommendation: Until mature SLC processes for developing and acquiring systems have been implemented across IRS, the Commissioner of Internal Revenue should limit requests for future appropriations for information technology to only cost-effective efforts that involve deploying already developed systems, only if these systems have been fully tested, are not premature given the lack of a completed architecture, and produce a proven, verifiable business value.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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