Patient Protection and Affordable Care Act:

IRS Should Expand Its Strategic Approach to Implementation

GAO-11-719: Published: Jun 29, 2011. Publicly Released: Jun 29, 2011.

Additional Materials:

Contact:

James R. White
(202) 512-5594
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

This report discusses the briefing we gave on June 8, 2011, as well as subsequent comments from the Internal Revenue Service (IRS). We gave this briefing in response to Congressional request that we assess IRS's planning to implement its responsibilities under the Patient Protection and Affordable Care Act (PPACA). The report (1) describes IRS's PPACA responsibilities and effective dates and (2) assesses the extent to which IRS, in planning PPACA implementation, is following leading practices in four areas--developing an overall management structure (including goals and performance measures), estimating and tracking costs, assuring compliance with the new law while minimizing burden, and managing risk.

In summary, IRS has responsibilities in the implementation of 47 PPACA provisions with effective dates through 2018. In planning to implement these provisions, IRS has generally followed leading practices. Top leadership has been involved; cost estimates for information technology projects have specified ground rules and assumptions, data sources, and supporting calculations; work has started on compliance controls; and risks are being identified and analyzed at the individual project level. However, IRS could improve aspects of its planning, particularly at an agencywide or strategic level. IRS defines strategic-level goals and project plans in multiple documents without integrating the goals or plans, IRS has no timeline for developing performance measures and collecting associated data, a cost estimate for all of the PPACA program has not been provided, and the risk management framework does not assure that all risks, especially strategic-level risks, are identified and analyzed. While implementation for some provisions is years away, making improvements to the planning process now would reduce risks and might minimize future problems. Hence, we are recommending that the Commissioner of Internal Revenue take the following four actions: (1) define program goals and develop a project plan in one document that effectively integrates all aspects of the program; (2) document a schedule for developing performance measures that link to program goals; (3) develop a more complete cost estimate that is consistent with the GAO Cost Estimating Guide; and (4) modify and document IRS's risk management approach to have more assurance that all risks, including strategic-level risks for the program, are identified and analyzed, and that mitigation options are assessed.

Recommendations for Executive Action

  1. Status: Open

    Comments: IRS did not update its cost estimate for PPACA since our report last year. IRS planned to let a contract in May 2012 for a revised cost estimate that adheres to the four criteria in GAO's cost estimating guide. IRS anticipates that the work will take at least 3 months. Update 6/20/13 - IRS delivered a revised estimate to OMB for review in the Fall of 2012. OMB granted IRS permission to share the revised estimate to GAO for review in June 2013. We have begun reviewing the estimate to determine the agency's progress in implementing our recommendation.

    Recommendation: IRS should document a more complete cost estimate that is consistent with the GAO Cost Estimating Guide.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: IRS documented a schedule for developing performance measures that are to link to program goals. IRS anticipates developing the performance measures by July 1, 2012.

    Recommendation: IRS should document a schedule for developing performance measures that link to program goals.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Open

    Comments: IRS defines program goals and objectives in a PPACA Governance Plan issued by the PPACA Executive Steering Committee. The goals link to agency objectives and apply to the entire IRS PPACA effort. IRS maintains separate project plans for Services & Enforcement (S&E) and Modernization, Information Technology Systems Services (MITS). An effort is made to integrate the plan manually on a weekly basis, but the lack of automatic links between the two plans raises concerns about effectiveness to the extent that the manual efforts will not detect delays in progress. IRS is considering ways to electronically integrate the two plans but has not made any decisions on a cost effective way. Update 6/20/13 - A meeting with IRS officials in April 2013 confirmed that the agency has not electronically integrated the two plans. It remains uncertain whether the agency will do it. With almost all of PPACA's provisions taking effect by 2014, it could be that IRS will not electronically integrate the plans in time to impact its implementation of the law.

    Recommendation: IRS should define program goals and develop a project plan in one document that effectively integrates all aspects of the program.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: IRS modified its risk management plan on February 24, 2012. The revised plan calls for Executive involvement in identifying risks, addressing the need to identify strategic-level risks. The section on evaluating alternative risk mitigation strategies did not change. On May 3, 2013, IRS provided a revised risk management plan to clarify which parties are responsible for analyzing and reviewing mitigation alternatives and to clarify how these alternatives are to be selected and decisions about them are to be documented.

    Recommendation: IRS should modify and document its risk management approach in order to have assurance that all risks, including strategic-level risks for the program, are identified and analyzed and that mitigation options are assessed.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

Explore the full database of GAO's Open Recommendations »

Sep 18, 2014

Aug 11, 2014

Jul 29, 2014

Jul 22, 2014

Jul 18, 2014

Jul 7, 2014

Jul 2, 2014

Jun 13, 2014

May 30, 2014

May 20, 2014

Looking for more? Browse all our products here