Managing IRS:

Important Strides Forward Since 1988 but More Needs to Be Done

GGD-91-74: Published: Apr 29, 1991. Publicly Released: Apr 29, 1991.

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Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) efforts to improve its efficiency and managerial accountability, and the quality of its services, focusing on steps IRS took after a 1988 GAO management review of IRS.

GAO found that: (1) IRS has taken steps to establish a leadership framework that will enable it to improve its management direction and oversight; (2) IRS established the positions of Chief Financial Officer (CFO), Controller, and Chief Information Officer (CIO), and established a business review process; (3) the establishment of the CFO and Controller positions provided IRS the leadership to meet long-standing financial management challenges; (4) the CIO position provided IRS the leadership to guide it through major information systems modernization efforts; (5) business reviews will be effective in helping IRS measure personnel performance and in holding managers accountable for meeting IRS-wide goals; (6) IRS identified actions that it needed to take, such as holding financial leadership responsible for all IRS financial matters, enhancing its senior managers' and executives' technical expertise, and developing measurable performance goals; and (7) IRS did not expect to finish its redefinition of occupations and skills needed to carry out its mission until September 1994, which would postpone its implementation of recruiting, training, and retention initiatives.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to IRS, development of an automated contract system has become unnecessary for the management of contract obligations and payments because the required information is now available in IRS' Automated Financial System. That system is checked either manually or by other automated systems prior to approving contract obligations and payments.

    Recommendation: The Commissioner of Internal Revenue should ensure that the Assistant Commissioner for Procurement Services adopts as one of his initial priorities the development of software to manage contract obligations.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: IRS has developed an Executive and Management Technical Expertise Strategy which, according to IRS, includes an assessment of the technical skills of executives and managers. IRS also established a new Training Branch to assist information systems functions in designing and developing training programs and addressing technical training issues.

    Recommendation: The Commissioner of Internal Revenue should ensure that IRS develops and implements, as a priority, a strategy for providing additional technical expertise at senior decisionmaking levels. This strategy should include an assessment of IRS needs for additional technical experience and a program to satisfy those needs as part of the human resource planning process.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: IRS asked its regions to update the information on productivity projects, and IRS stated that subsequent review of that information showed significant improvement over the situation at the time of the GAO review. IRS stated it will continue to monitor.

    Recommendation: The Commissioner of Internal Revenue should ensure that IRS more aggressively monitors the regional offices to ensure that they are providing complete information on the status of productivity projects so that project benefits can be transferred agencywide.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: IRS stated that a methodology for calculating the cost of poor quality has been developed, as has an associated training course. All training of representatives from IRS quality councils is to be completed by December 31, 1991.

    Recommendation: The Commissioner of Internal Revenue should ensure that IRS enhances the reliability of savings information in its Quality Improvement Information System by developing a methodology for calculating the cost of poor quality.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  5. Status: Closed - Implemented

    Comments: In an internal status report that was revised after issuance of the report, IRS changed the status of three GAO 1988 recommendations to show that it would be September 1994 before a human resource management plan is developed.

    Recommendation: The Commissioner of Internal Revenue should ensure that IRS revises its internal reports on the status of GAO 1988 recommendations to accurately reflect its lack of progress in developing a human resource management plan.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  6. Status: Closed - Implemented

    Comments: IRS reconsidered its milestones and felt they were still appropriate. IRS stated that the 1994 milestone is just the last stop along the line and that things will be happening all along the way.

    Recommendation: The Commissioner of Internal Revenue should ensure that IRS reconsiders the milestones it has established for the human resource related strategies in its Strategic Business Plan with a view toward bringing a greater sense of urgency to that effort.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  7. Status: Closed - Implemented

    Comments: In lieu of adopting the GAO recommendation, IRS established and staffed an accounts receivable executive position reporting directly to the CFO. This person, per IRS, will focus on establishing better management information, and will implement strategies to limit the growth of uncollectibles and develop an allowance for doubtful accounts.

    Recommendation: To better ensure appropriate attention to IRS revenue accounting activities, the Commissioner of Internal Revenue should transfer responsibility for those activities to CFO and the Assistant Commissioner of Finance/Controller.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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