GAO says costs, schedule hamper IRS modernization

The pace and scope of IRS modernization is moving faster than the agency's managers can keep up with, a government auditor said.

Despite some progress, the IRS still falls short in managing modernization cost and schedule estimates, said Greg Wilshusen, assistant director for the General Accounting Office's IT team. 'And the scope and complexity of the program is growing, and the number of projects is increasing,' he said.

'The IRS' capacity to manage modernization is still maturing,' he said. The agency does not yet have sufficient knowledgeable staff, experience at estimating costs and the ability to use performance-based contract methods, he said, echoing comments in a GAO report released last month.

Numbers don't add up

The IRS has improved its management controls for software acquisition, he said. 'But the imbalance between program pace and management capacity adds risk to deliver these systems on cost and on schedule,' Wilshusen said.

The GAO report said 75 percent of IRS initiatives and acquisition milestones were 10 percent over cost or behind schedule in the revised fiscal 2003 expenditure plan. Delivery of the first phase of the project to replace the decades-old Master File system has been delayed 13 months.

The Customer Account Data Engine, intended to replace the mainframe Master File, will have the capability for daily updates so the IRS can deliver refunds faster and better manage unpaid taxes. The agency will deploy the first release of CADE next year to handle the easiest returns, those from Form 1040EZ filers.

'We expect the easiest returns to be running through the CADE environment during the 2003 filing season,' said John Dalrymple, deputy commissioner for operations support.

IRS commissioner Mark Everson agreed with GAO's findings and recommendations. The agency is working with Prime contractor Computer Sciences Corp. to develop best practices to validate cost and schedule estimates. One of Dalrymple's tasks is to attract and retain experienced staff to advance modernization.

The IRS will make management changes to improve its use of performance-based contracts, Dalrymple said. 'It requires more experienced people, plus experience in how we manage our contracts,' he said.

To view an Adobe Portable Document Format of the GAO report, Business Systems Modernization: IRS Has Made Significant Progress in Improving Its Management Controls, but Risks Remain, go to and enter 132 in the box.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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