IG: IRS needs better plan for updating aging hardware

The Internal Revenue Service estimates it should spend $180 million annually to sufficiently maintain and replace its computer hardware and has several efforts to deal with the risks related to its aging equipment. But the size and effect of the aging hardware issue are not fully known because the information is not comprehensive enough, the Treasury Inspector General for Tax Administration (TIGTA) said in a report released Nov. 6. IRS must depend on the most effective information to know how to prioritize its hardware carefully because permanent program funding is uncertain. The agency has established the Infrastructure Executive Steering Committee governance process to provide an infrastructure road map and improve hardware prioritization. It has also started an end-of-life equipment replacement program for hardware components. IRS needs a more disciplined investment management governance process for all infrastructure activities to know how to better prioritize its hardware needs, TIGTA said. “The aging computer hardware issue is placing an increased burden on business operations,” IRS told a briefing of IRS Oversight Board, TIGTA reported. Hardware problems reported to IRS' help desk increased 13 percent from 2005 to 2006, according to agency figures. IRS said it would reallocate an additional $45 million to its current $45 million spending for aging hardware in each of fiscal 2006 through 2008 from savings achieved through program efficiencies. That would increase funding by $135 million to achieve the $180 million needed to maintain and replace hardware. But IRS was able to reassign only $34 million last year. In June, the agency said it had permanently transferred $11 million from its 2007 Modernization and Information Technology Services organization budget to the hardware budget. TIGTA recommended that IRS Chief Information Officer Arthur Gonzalez improve the inventory data the agency collects about its hardware to provide more complete and accurate management information on the negative effect the aging infrastructure is having on tax administration, TIGTA said. The CIO should periodically update the aged computer hardware estimate. IRS should also improve the integration of asset and inventory management with incident and problem management so problems related to old hardware can be identified easily and used to support the need for new equipment. An activity that includes end-of-life equipment replacement should be included in the Infrastructure Executive Steering Committee governance process. IRS said it will implement the recommendations throughout 2008.