TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION
EFFORTS TO UPDATE AGING COMPUTER
HARDWARE ARE UNDERWAY, BUT PROGRAM IMPROVEMENTS ARE NEEDED TO MINIMIZE RISKS
Issued on November 6, 2007
Highlights
Highlights of
Report Number: 2008-20-002 to the
Internal Revenue Service Chief Information Officer.
IMPACT ON TAXPAYERS
The Internal Revenue Service (IRS)
estimates it should spend $180 million
annually to adequately maintain and replenish its computer hardware and has initiated several actions to address the risks
associated with the aging computer hardware. However, the
information used to estimate the size and effect of the aging computer hardware
could be improved. The IRS
established a goal to obtain increased resources to address the aging computer
hardware as one of its highest priorities, but permanent program funding
remains uncertain and a disciplined investment management governance process is
needed for all infrastructure initiatives/activities. As a result, the IRS may not fund the highest
priority projects to ensure investment decisions result in the most efficient
use of available resources on behalf of taxpayers.
WHY TIGTA DID THE AUDIT
This
audit was initiated to determine whether the IRS implemented effective controls
to identify and replace aging equipment components that could adversely affect its
ability to meet its mission if the equipment components were to fail.
The IRS continues to emphasize that the core of tax
administration processing relies heavily on critical systems designed in the
1960s, thereby hindering its ability to accomplish its mission and provide
better service to taxpayers due to the inherent limitations of these
systems. The IRS also reports the risk
to tax administration is significant because critical business systems are
currently operating on aged computer hardware (i.e., hardware that has exceeded
its useful life). At the
beginning of Fiscal Year 2006, the aged hardware was estimated to be valued at
$276 million, with an additional $161 million in hardware becoming aged during
Fiscal Year 2006.
WHAT TIGTA FOUND
The information used to estimate the size and effect of the aging
computer hardware issue could be improved. For example, the estimated cost to
maintain and replenish the computer hardware needs to be updated, and reported
information technology problems and reduced enforcement revenue could not be
linked to aged computer hardware. Also,
because the IRS
considered the effect of the SASSER worm attack
on IRS computer systems to be related to aged hardware and
software, it reported unreliable information supporting the Fiscal Year 2007 budget request to the
Office of Management and Budget.
Because permanent program funding
remains uncertain, the IRS’ ability to adequately maintain and replenish its old
computer hardware will remain uncertain. In addition, a disciplined investment
management governance process is needed for all infrastructure
initiatives/activities, and performance measures are needed to assess the
success of efforts to address the aging computer hardware issue.
WHAT TIGTA RECOMMENDED
The Chief Information Officer should implement procedures to
improve the accuracy and completeness of the inventory data and periodically
prepare an updated aged computer hardware estimate,
improve the integration of asset/inventory management with incident and problem
management, permanently allocate necessary funds to maintain and replenish the
aging hardware, ensure the End of Life Replacement activity is included in the
governance process, and establish a process for monitoring and reporting
Sustaining Infrastructure Program accomplishments to address the aging computer
hardware issue.
In
their response to the report, IRS
officials agreed with four of the five recommendations and stated they plan to take appropriate
corrective actions. The Chief Information Officer did not agree to
permanently allocate the necessary funds within his organization’s budget to
maintain and replenish the aging computer hardware but agreed to realign the
base budget whenever appropriate, subject to availability. TIGTA disagrees with the IRS and believes the Chief
Information Officer should honor the commitment made to the IRS
Oversight Board that the current $45 million being spent on infrastructure would
be augmented by reallocating an additional $45 million from program
efficiencies in Fiscal Years 2006 through 2008.
READ THE FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go to:
http://www.treas.gov/tigta/auditreports/2008reports/200820002fr.html.
Email Address: inquiries@tigta.treas.gov
Phone Number: 202-622-6500
Web Site:
http://www.tigta.gov