Summaries of Tax-Related Products Issued ADP and Information Technology Tax Systems GAO/IMTEC-92-30, 03/02/92; GAO/T-IMTEC-92-10, 03/10/92; During 1992, GAO continued to monitor IRS' Tax Systems Modernization development and integration of a vision of how IRS intends to do business in the future using the new technology; completion of key planning components; implementation of a project tracking mechanism; ⚫ development of a strategy for dealing with technological readiness risks; improvement of the procurement process; better management of the systems development process; implementation of a strategy for hiring, training, and retaining managerial and technical staff; and paying greater attention to security and privacy issues. GAO had previously testified that these factors were not being fully addressed. In fiscal year 1992, GAO testified that IRS had made significant progress in addressing some of these critical success factors. For example, IRS had developed a business vision and published a Design Master Plan for the modernization. It was also making progress toward implementing a project-tracking mechanism. IRS was developing a strategy for hiring, training, and retaining the staff needed for carrying out the modernization and was giving priority attention to ensuring that security and privacy issues were appropriately addressed. Summaries of Tax-Related Products Issued in Fiscal Year 1992 by Subject Matter Recommendation(s) GAO remained concerned about IRS' planning, technological readiness, and procurement and systems development processes. In the planning area, for example, a transition plan describing how business functions of IRS would change from the currently slow, largely manual way of operating to the modernization's more rapid electronic methods is still not developed. Although IRS recognized that such a transition plan is needed, the agency had no timetable for its development and implementation. IRS' plans to use "leading edge” technology as part of its modernized While improvements had been made in the management of procurement Finally, while IRS had made progress in addressing GAO concerns about security and privacy aspects of the program, GAO remained concerned with the independence among security administrators and software developers and the need to clearly delineate responsibility for protecting the privacy of taxpayer information. GAO made recommendations for four of the eight critical success factors: planning, technological readiness, procurement, and security and privacy. To fully address these critical factors, the Commissioner of Internal Revenue should (1) complete by the end of calendar year 1992 the integration strategy and business transition plan that are prerequisites for moving forward with the modernization and (2) take the following steps to ensure that IRS strategy for input processing is analytically sound before committing to its implementation. Summaries of Tax-Related Products Issued IRS should conduct a comprehensive analysis to determine the costs and benefits of alternative input-processing strategies. This analysis should, at a minimum, take into consideration anticipated technological advances; identify the different types of taxpayers and how they file returns; assess the current and projected filing media that would be suitable for each type; and determine the potential impact of various electronic filing incentives on the requirements for imaging and optical character recognition. This analysis should be updated periodically. • On the basis of this analysis, IRS should structure its input processing strategy around the alternative, or mix of alternatives, that is determined to be most advantageous to the government. • IRS should reexamine the functional requirements for two systems, the Document Processing System and Service Center Recognition/Image Processing System, and determine whether both systems will be needed and, if so, which system will be used for what so as to eliminate any potential overlap. In addition, the Commissioner should (1) improve the procurement process by amending the Service's contracting procedures to require that all future solicitations clearly indicate that the software documentation requirements apply to all software for which IRS expects to assume maintenance responsibility, including preexisting and off-the-shelf software; (2) further improve the procurement process by developing guidelines including appropriate methodologies and criteria-to be used in making price/technical tradeoff analyses and require that these guidelines be made an integral part of the planning documents for all such procurements; (3) separate the security administrators' and software developers' roles and designate responsibility for protecting the privacy of taxpayer information; and (4) establish a deadline for resolving these issues. Action(s) Taken And/or IRS generally agreed with our recommendations to better address the critical success factors. IRS intends to complete its technical integration strategy and to develop its business transition plan after completing three ongoing reviews of its business operations. To better define its input processing strategy, IRS is examining the different alternatives for filing taxpayer returns and is performing an economic analysis of two input processing initiatives for meeting its tax processing needs. On the basis of these analyses, IRS may need to modify ongoing acquisitions. Summaries of Tax-Related Products Issued Related GAO Product(s) IRS is also developing policies and procedures for making price/technical tradeoff analyses an integral part of the procurement process, and intends to require that its software documentation requirements be included in all future solicitations. Finally, IRS has agreed to ensure that the security and privacy responsibilities for the Tax System Modernization program are clearly specified and are independent of the systems development process. GAO/T-IMTEC-91-8, 06/25/91 and GAO/T-IMTEC-91-18, 07/09/91 Summaries of Tax-Related Products Issued Allegations GAO/GGD-92-14R, 05/28/92 In response to a request from Congressman William E. Dannemeyer concerning several allegations made by a constituent, GAO provided information on IRS' negotiation and administration of certain contracts for ADP support services. GAO examined whether proper safeguards were implemented against contract abuse and the waste of tax dollars. The contracts in question provided IRS and other Treasury bureaus with needed ADP support services. These services included requirements definition, systems analysis and design, software development, testing, maintenance, and program and project management. The constituent alleged that (1) IRS contract administration practices did not ensure that the contractor's estimates of labor hours and skill levels required were reasonable and (2) IRS did not have the experienced staff to adequately review the contractor's task proposals even though the negotiation of proposals demanded that IRS have very technically qualified people to review them. IRS' Internal Audit staff identified similar weaknesses in the negotiation of task orders. In response, IRS managers revised procedures and increased the number of staff assigned to administer the contract, including the negotiation of task orders. GAO interviewed IRS procurement staff who said that although much had been done to strengthen IRS administration of ADP support services contracts, further actions were needed. For example, (1) guidelines for acquiring ADP support services had been revised and (2) additional personnel had been assigned to administer the contract. However, one major remaining step was to acquire additional personnel with the necessary technical expertise to evaluate the number of labor hours and skill mixes required to perform a task. Although potential weaknesses were alleged in certain related subcontracts, GAO did not review these subcontracts because IRS was making continuous changes in its procedures to negotiate task orders and related subcontracts. |