IRS makes progress implementing IT plan

The Internal Revenue Service generally has been successful in implementing a five-year plan that governs information technology decisions, though cost estimates and performance measurement could improve, according to an audit report released on Thursday.

Comment on this article in The Forum.Agency officials have updated the Modernization Vision and Strategy Program annually to reflect changing business conditions and to incorporate new strategic objectives and requirements, the inspector general report stated. They also have established stronger alliances, both internally and with outside organizations, the auditors noted. For example, portfolio planning, estimation and delivery services staff now collaborate, and Modernization and Information Technology Services employees work more closely with financial offices.

The IG also noted that Mitre Corp. conducted lessons-learned sessions on the 2009 investment planning process and found that it "had improved from that in the prior year."

The five-year strategic plan -- established in 2006 to guide investment priorities -- marked a shift from previous goals of replacing existing technology within 15 years. The IRS has seen greater success focusing on smaller, more frequent delivery of IT projects. In a previous program assessment, the IG found that "the IRS and its contractors were performing better against cost and schedule estimates as a result of breaking releases down into smaller, more manageable pieces."

Despite progress, the IRS needs to improve its processes for establishing total cost estimates, according to the report. Internal guidance doesn't require any comparison of actual investment costs to original estimates, auditors stated. The IG reviewed cost estimates for four of the 23 IT projects in the approved investment portfolio, and found them to be reasonable. But auditors concluded that failure to validate the estimates could increase the risk that "future investment proposal cost estimates will not be reliable," which in turn could jeopardize funding.

The report also cited problems meeting the requirements of the 1993 Government Performance and Results Act, which asks agencies to set goals, measure performance and report on their accomplishments.

"MVS program performance measures are being collected, but there is no standardized procedure for compiling and reporting these measures," the IG said. "Determining performance goals for [IT] investments is a critical factor for requesting funding in the budget formulation and submission process, [and] performance measures are necessary to support the establishment of a sound strategic direction."

In a written response, IRS Chief Information Officer Arthur Gonzalez noted plans to implement standard procedures for comparison of actual project costs with initial estimates, and guidelines for performance measurement and reporting.