Business Systems Modernization

IRS Needs to Better Balance Management Capacity with System Acquisition Workload Gao ID: GAO-02-356 February 28, 2002

GAO reviewed the Internal Revenue Service's (IRS) fifth expenditure plan requesting $391 million from its Business Systems Modernization (BSM) fund. Although IRS's November 2001 expenditure plan satisfied the conditions specified in the appropriations act, IRS must still fully implement the controls and capabilities described in the plan. Since GAO's June 2001 report, IRS has made important progress in implementing modernization management controls and capabilities and addressing GAO's past recommendations. However, IRS's modernization management capacity is still not where it needs to be. Examples of modernization management controls and capabilities that are not yet fully implemented include software acquisition management, configuration management, quality assurance, risk management, enterprise architecture implementation, human capital management, integrated program scheduling, and cost and schedule estimating. The increased risk of IRS's proceeding without these controls and capabilities has contributed to project cost, schedule, and performance shortfalls. IRS acknowledges that it needs to strengthen its modernization management controls. IRS recognizes that these controls become more critical as the size and complexity of the BSM program continue to increase. Although IRS has actions underway to fully implement these controls, IRS plans to compensate for their immaturity by applying experienced human capital. Reliance on a combination of existing immature processes and individual expertise and heroic efforts is a short-term solution to a long-term need. Because the immaturity of these controls has already led to project cost, schedule, and performance shortfalls, IRS needs a better strategy to mitigate the risks associated with its fifth expenditure plan.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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