Summary

The Internal Revenue Service (IRS) is moving forward with its new business review process, which should help chart its progress in meeting agency objectives. Senior management appears strongly committed to making the process work, the process has been structured to include various essential elements that GAO outlined in an earlier report (GAO/GGD-89-1), and the process has continued to improve from year to year. IRS can further improve the process by (1) compiling review results in an overall assessment of its progress in implementing long-term strategies and meeting long-term objectives, (2) doing business reviews of its National Office, (3) ensuring that the number of performance factors being measured is appropriate, and (4) expanding communications about the business review process within the agency. An important step IRS can take to enhance the business reviews is to improve its performance measures. IRS is trying to develop better performance measures and is addressing many of the opportunities GAO identified.

GAO found that: (1) IRS developed the business review process as part of the Strategic Business Plan (SBP) to measure its field offices' contributions toward meeting SBP objectives; (2) IRS top management supports the business review process; (3) the business review process generally meets effective evaluation criteria and has improved since its inception; (4) the review process can be further improved by converting its results into a bottom-line assessment of overall performance, by including IRS headquarters, by ensuring that the factors measured by the reviews are appropriate, and by improving performance measures and communications about the process within IRS; and (5) IRS is developing new performance measures and guidelines to improve communications.