Recommendation: The IRS Commissioner should direct the appropriate IRS officials to determine the reason(s) why staff did not always comply with IRS's established policies and procedures related to initiating, monitoring, and reviewing the monitoring of manual refunds and, based on this determination, establish a process to better enforce compliance with these requirements.
Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Comments: During fiscal year 2019, we identified instances where staff did not comply with IRS's policies and procedures related to monitoring and reviewing the monitoring of manual refunds. IRS officials stated that the Wage and Investment (W&I) organization determined that a fully automated process to perform monitoring of manual refunds is the optimal solution to address, at an enterprise level, deficiencies associated with reliance on employees to monitor refunds in process and take appropriate action when potential duplicate or erroneous refund conditions are encountered. In addition, IRS officials indicated that the W&I organization will develop business requirements and request programming through the Unified Work Request process; however, limited resources and competing priorities prevent the identification of an implementation date. As a result, IRS will place this recommendation on hold until an implementation date is known.
Recommendation: The IRS Commissioner should direct the appropriate IRS officials to identify the cause of and implement a solution for dealing with the periodic backlogs of ICO inventory that is hampering the performance of quality reviews.
Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Comments: During fiscal year 2019, the Wage and Investment (W&I) organization determined that periodic backlogs of Input Correction Operation (ICO) inventory were caused by a combination of factors, such as systemic issues, fluctuations in projected filings, and hiring challenges. IRS officials stated that the W&I organization has also identified and implemented several strategies to address ICO backlogs and mitigate the impact on the quality review program, including hiring more staff in ICO functions, using seasonal employees, cross-training, overtime, transferring of work, and updating the Internal Revenue Manual. Since IRS provided us with this information near the end of our fiscal year 2019 audit in September 2019, we will evaluate IRS's actions to address this recommendation during our fiscal year 2020 audit.
Recommendation: The IRS Commissioner should direct the appropriate officials to establish and implement monitoring procedures designed to reasonably assure that the key detailed information for tangible capitalized P&E is properly recorded and updated in the KISAM system.
Agency: Department of the Treasury: Internal Revenue Service
Status: Open
Comments: IRS established the Asset Management Program Monitoring and Review procedure, effective October 1, 2016, for performing quarterly sample reviews of Information Technology (IT) assets in the Knowledge, Incident/Problem, Service Asset Management (KISAM) system. In September 2017, IRS also revised the Internal Revenue Manual to require Facilities Management and Security Services territory managers or section chiefs to review KISAM key data elements for non-IT assets to verify that they are correct and updated. However, during our fiscal year 2018 floor-to-book inventory testing, we identified exceptions where (1) a key detailed information element (e.g., building code) for property and equipment (P&E) assets was not properly recorded in KISAM and (2) P&E assets found on the floor did not have asset records in KISAM. We will conduct inventory testing and follow-up to determine the status of this issue during our audit of IRS's fiscal year 2020 financial statements.
