Tax Administration:

Opportunities to Further Improve IRS' Business Review Process

GGD-92-125: Published: Aug 13, 1992. Publicly Released: Aug 13, 1992.

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GAO evaluated the Internal Revenue Service's (IRS) annual business reviews, focusing on whether the reviews were a useful mechanism for measuring IRS performance toward meeting its business objectives.

GAO found that: (1) IRS developed the business review process as part of the Strategic Business Plan (SBP) to measure its field offices' contributions toward meeting SBP objectives; (2) IRS top management supports the business review process; (3) the business review process generally meets effective evaluation criteria and has improved since its inception; (4) the review process can be further improved by converting its results into a bottom-line assessment of overall performance, by including IRS headquarters, by ensuring that the factors measured by the reviews are appropriate, and by improving performance measures and communications about the process within IRS; and (5) IRS is developing new performance measures and guidelines to improve communications.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: IRS has developed measures to assess its progress in achieving overall agency objectives. IRS has established an office in the Planning Division that has developed and is continuing to upgrade Servicewide measures of voluntary compliance, taxpayer burden, customer service, and productivity. GAO expects that the corporate measures will be used in the business review process for fiscal year 1994.

    Recommendation: IRS should incorporate appropriate measures into the business review process to better ensure that the reviews generate results-oriented information that will be most helpful to IRS senior managers.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: IRS agreed that there have been too many critical success factors. In FY 1992, each function had its own annual business plan, with a total of about 200 critical success factors. In FY 1993, IRS has an agencywide strategic business plan and three crossfunctional annual plans with a total of about 40 critical success factors.

    Recommendation: IRS should address concerns raised by many officials and executives about the number of critical success factors.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: IRS' business reviews for 1993 included a review of the National Office.

    Recommendation: IRS should do business reviews of the National Office.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  4. Status: Closed - Implemented

    Comments: IRS provided GAO with a copy of its FY 1995 Annual Performance Plan Report, which, upon quick review, appears to provide the kind of bottom-line assessment anticipated in the recommendation. The report was prepared as a result of the 1995 regional office business reviews and focuses on the seven performance goals included in IRS' Business Master Plan. It also includes summaries of IRS' efforts to advance TSM, implement customer service standards, implement NPR recommendations, and comply with GPRA requirements.

    Recommendation: IRS should incorporate business review results into a bottom-line assessment of IRS overall progress in implementing long-term strategies and achieving long-term objectives.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  5. Status: Closed - Implemented

    Comments: IRS agreed that communications need improvement. Toward that end, every employee was given a pocket version of the Strategic Business Plan. Also, IRS issed new business review guidance that it said will ensure improved communications between headquarters and the field and will better define roles and responsibilities.

    Recommendation: IRS should look for opportunities to improve communications about the business review process. As discussed in this report, one such opportunity would seem to be in the area of critical success factors.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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