Audit: Progress on IRS financial system improves

Report: "The Integrated Financial System Project Team Needs to Resolve Transition Planning and Testing Issues to Increase the Chances of a Successful Deployment"

Good but not perfect could be an informal summary of how an inspector general views the Internal Revenue Service's progress on the agency's Integrated Financial System.

The project is one of a half-dozen active IRS Business Systems Modernization efforts, which have been plagued by significant cost overruns and delays. The IFS, an accounting system that will upgrade the processes used to generate the tax agency's annual statements, is $50 million over its original budget estimate and 13 months behind schedule.

However, IFS was the first modernization project to complete a transition management plan, and significant integration testing is now under way. The plan and testing reduce the risk that officials would be unable to operate the system, according to the audit released Aug. 19 by the Treasury Department's inspector general for tax administration

Members of the inspector general's office conducted most of their fieldwork investigation in February, about one month after the IRS and its lead Prime Alliance contractor, Computer Sciences Corp., delayed the project again.

At the time, auditors offered eight recommendations. The agency has begun or completed seven, according to the report. Agency officials rejected a suggestion to include "trusted recovery" in the security test and evaluation plan. They also rejected a proposal to extend "object reuse" testing to all computer platforms.

IRS officials said testing of trusted recovery