Report: IRS should keep better records for research projects

Internal Revenue Service computer databases are missing information critical to ensuring research projects remain on schedule and within budget, according to a new inspector general report.

The IRS has not implemented effective processes for managing research projects and analyzing results to determine whether the efforts met objectives, according to the report, released on Thursday. The agency spent more than $93.2 million on research in fiscal 2008.

"Key information should be captured on an information system to track and monitor research efforts," the Treasury Inspector General for Tax Administration concluded. "This will enable IRS management to more effectively monitor whether research is completed within established time/budget standards and assess its impact on improving taxpayer service, enhancing enforcement of the tax laws and modernizing the IRS."

Managers of some IRS research programs don't maintain project databases; others don't use them to track progress, or they enter incomplete and inconsistent information, the report said. Key information that sometimes is omitted includes project numbers; objectives of the research; customers and requestors of the study; and start, milestone and completion dates.

Additionally, establishing a uniform definition of research programs could help IRS officials draw more accurate comparisons among programs, the IG found.

"Various factors can cause differences in productivity between research programs," including the complexity of certain research projects or the need for more gradual, long-term analysis, the report said. But, "Inconsistency in how each research program defines what constitutes a 'research project' makes it difficult to accurately assess and compare performance across the IRS. Managers need access to reliable and timely operational data to meet their responsibility of ensuring the effective use of resources."

According to the report, managers of IRS research programs were allowed to develop their own database standards and best practices, with no central oversight to ensure that basic research information was properly captured and monitored.

In addition to creating an agencywide definition of research, the IG recommended that the IRS develop standard guidance on what information should be collected to support key decisions and achieve desired results, and the basic research data officials should capture to measure progress toward strategic goals and objectives.

"Tracking systems currently exist in some research units," wrote Mark Mazur, director of research, analysis and statistics at IRS, in response to the report. "Some of these tracking systems are being redesigned and will...capture project documentation and time and resource expenditures, and monitor research projects." Mazur estimated that by July 15, 2010, the systems would comply with the standards the IG recommended.