Business Systems Modernization: Internal Revenue Service's Fiscal Year 2006 Expenditure Plan

GAO-06-360 Published: Feb 21, 2006. Publicly Released: Feb 21, 2006.
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Highlights

The Internal Revenue Service's (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 agency's 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. GAO's 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 IRS's BSM program.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service To allow for effective congressional oversight of the BSM program, the Commissioner of Internal Revenue should direct the Chief Information Officer to 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.
Closed - Implemented
In response to this recommendation, IRS initiated discussions in February 2006 with the Department of the Treasury and the Office of Management and Budget to address issues concerning the Business Systems Modernization (BSM) expenditure plan development and review processes. This coordination resulted in the formulation and implementation of a revised timeline and process to effect more timely review and submission of future expenditure plans. In addition, in April 2006 IRS issued a directive that established a process to ensure prompt notification and centralized recording of all proposed and approved changes to BSM projects and program-level initiatives and support improved responsiveness to oversight requirements. IRS's implementation of this new policy facilitated near real-time updates to program and project status information contained in the FY 2007 BSM Expenditure Plan throughout the development and review process.

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