The Effectiveness of the Kiosk Program Cannot Be Determined
August 2004
Reference Number: 2004-40-151
This report has cleared the Treasury Inspector General
for Tax Administration disclosure review process and information determined to
be restricted from public release has been redacted from this document.
August
26, 2004
\MEMORANDUM
FOR COMMISSIONER, WAGE AND INVESTMENT DIVISION
FROM: (for) Gordon C. Milbourn III /s/ Daniel R.
Devlin
Acting Deputy Inspector General
for Audit
SUBJECT: Final Audit Report - The Effectiveness of
the Kiosk Program Cannot Be Determined (Audit # 200440022)
This
report presents the results of our review of the Internal Revenue Service’s (IRS)
Kiosk Program. The overall objective of
this review was to determine whether the Kiosk Program provides effective
customer service to taxpayers.
The IRS
introduced the Kiosk Program in 1998 with seven kiosks located in three
states. The Program has since expanded
to 38 kiosks located in 20 states.
Locations of the kiosks include Taxpayer Assistance Centers (TAC), post
offices, Federal and state offices, libraries, and a mini-mall. The
Kiosk Program is part of the IRS’ efforts to broaden its use of electronic
interactions by providing more education and assistance through convenient,
easy to use self-assistance channels.
The current goal of the
Kiosk Program is to provide taxpayers with an alternative method of obtaining Federal and state tax forms and answers to
frequently asked tax questions in English and Spanish. The IRS’ vision for the future of the
Kiosk Program is to provide taxpayers with the ability to self-sufficiently
resolve their own tax needs and decrease the need for taxpayers to seek live
assistance from the IRS at TACs. This
would allow the IRS to refocus resources from the traditional prefiling work of
assisting taxpayers at the TACs to providing face-to-face assistance to
taxpayers with compliance issues.
The IRS cannot determine
whether the Kiosk Program provides effective customer service or is
cost-effective because of insufficient internal controls and management
oversight. Although the Kiosk Program
has been in place since 1998, the IRS has yet to develop guidelines or processes
to efficiently and effectively monitor the Program. For example, internal controls to ensure the Program is operating
as intended have not been developed. In
addition, processes have not been developed to:
·
Measure whether the Kiosk Program is meeting its
goal of providing taxpayers with the ability to self‑sufficiently resolve
tax issues.
·
Ensure
information provided on kiosks is current, accurate, and consistent.
·
Ensure kiosks
are placed in the most optimal locations.
·
Educate
taxpayers on the benefits and location of the kiosks.
The
Kiosk Program plays an integral role in the IRS’ future concept of
self-assistance customer service. To date, the IRS has spent approximately $685,900 to
purchase, update, and maintain kiosks without the ability to ensure taxpayers
or the IRS have benefited from these expenditures. During the review, results were shared with
IRS management. In response, management
initiated discussions with responsible kiosk vendors and internal stakeholders
to begin to address the concerns raised and to obtain suggestions for improving
and enhancing the Program.
However,
additional actions are needed to ensure the Kiosk Program provides effective
customer service. We recommended the
Commissioner, Wage and Investment Division, develop guidelines and strategies to enable the efficient and effective
monitoring of the Kiosk Program.
Processes need to be developed to monitor taxpayer usage and
satisfaction; ensure information is current, accurate, and consistent; monitor
kiosk functionality; optimally place kiosks; and educate taxpayers on the
benefits and locations of kiosks.
Management’s Response: IRS
management is pleased we acknowledged the critical role the Kiosk Program plays
in the IRS’ future concept of self-assistance customer service. They recognize improvements are needed in the
Program and agree with our recommendations.
Corrective actions will include:
·
Developing
guidelines for analyzing kiosk information to identify trends, issues, and
areas needing improvement.
·
Installing the
Customer Satisfaction Survey on all kiosks and using survey results to identify
additional services or information needed.
·
Requiring annual
certification that the information on the kiosks is current and accurate.
·
Using the
Service Delivery Model (SDM) to determine the optimal location of kiosks.
·
Developing a
communication plan to educate taxpayers on the benefits and locations of
kiosks.
Management’s complete response to the draft report is included as Appendix VI.
Copies of this
report are also being sent to the IRS managers affected by the report
recommendations. Please contact me at
(202) 622-6510 if you have questions or Michael R. Phillips, Assistant
Inspector General for Audit (Wage and Investment Income Programs), at (202) 927-0597.
Controls or Processes to Efficiently and Effectively Monitor the Program Have Not Been Developed
Appendix I – Detailed Objective,
Scope, and Methodology
Appendix
II – Major Contributors to This Report
Appendix
III – Report Distribution List
Appendix IV
– Outcome Measures
Appendix V –
Kiosk Locations by State
Appendix VI
– Management’s Response to the Draft Report
The Internal Revenue Service (IRS)
introduced the Kiosk Program in 1998 with seven kiosks located in three
states. The Program has since expanded
to 38 kiosks located in 20 states. (See
Appendix V for the specific states where kiosks are located.) Locations of the kiosks include Taxpayer
Assistance Centers (TAC), post offices, Federal and state offices, libraries,
and a mini-mall.
The Kiosk Program is part of the IRS’ efforts to broaden its use of electronic interactions by providing more education and assistance through convenient, easy to use self-assistance channels. The current goal of the Kiosk Program is to provide taxpayers with an alternative method of obtaining Federal and state tax forms and answers to frequently asked tax questions. This assistance is also to be provided in Spanish. The IRS’ vision for the future of the Kiosk Program is to provide taxpayers with the ability to self-sufficiently resolve their own tax needs and decrease the need for taxpayers to seek live assistance from the IRS at TACs. This is to be accomplished by providing more kiosk locations in both staffed and virtual TACs, as well as storefronts. Providing taxpayers with the ability to self-sufficiently resolve their own tax needs will then allow the IRS to refocus resources from the traditional prefiling work of assisting taxpayers at the TACs to providing face‑to-face assistance to taxpayers with compliance issues.
The IRS has contracts with outside vendors to purchase the
kiosks, including the computer hardware and software that run the kiosks. Once the kiosks are purchased and placed, the
vendors assist the IRS in performing informational updates and capturing data
on usage and maintenance.
This review was performed at the IRS Customer Assistance, Relationships, and Education function in the Wage and Investment Division Headquarters in Atlanta, Georgia, with visits to the following sites where kiosks are located: El Segundo, California; Hartford and Waterbury, Connecticut; Edison, New Jersey; and Columbus, Ohio, during the period February through May 2004. The audit was conducted in accordance with Government Auditing Standards. Detailed information on our audit objective, scope, and methodology is presented in Appendix I. Major contributors to the report are listed in Appendix II.
The IRS cannot determine whether the Kiosk Program provides effective customer service or is cost-effective because of insufficient internal controls and management oversight. Although the Kiosk Program has been in place since 1998, the IRS has yet to develop guidelines or processes to efficiently and effectively monitor the Program.
No system of internal controls exists to ensure the Kiosk
Program is operating as intended and meeting its goals and objectives
There are no documented internal controls, guidelines, policies, or procedures for the Kiosk Program to measure and monitor whether the Program is meeting its goal of providing effective customer service. For example, balanced measures and performance goals have not been established, an analysis has not been performed to determine if the costs expended equate to the customer service benefit provided to taxpayers, and a strategy has not been developed outlining long-term goals as well as the measures to be used to determine whether the goals are being met.
No process exists to monitor kiosk usage and taxpayer
satisfaction
Although kiosks have the ability to capture data on both taxpayer usage and taxpayer satisfaction, the IRS does not currently analyze these data to identify trends or areas for improvement. Each kiosk has software provided by the vendor that tabulates usage characteristics including language, tax form viewed, and Frequently Asked Questions (FAQ) viewed or printed. In addition, some but not all kiosks contain a survey to capture information on the taxpayers’ experiences using the kiosks. The IRS was aware of this capability but has not used the data to monitor the Program.
No process exists to ensure information provided on
kiosks is current, accurate, or consistent
Visits to the five kiosks sampled identified that the information provided on them was not current or accurate. In addition, the information was not consistent from kiosk to kiosk. For example:
· One kiosk inaccurately stated the Federal tax return filing deadline as April 17, 2004, instead of April 15, 2004.
· One kiosk provided FAQs only in English, even though the IRS is required to provide them in Spanish. Based on discussions with the vendor, this condition exists on 22 (58 percent) of the 38 kiosks nationwide. Executive Order 13166, Improving Access to Services for Persons With Limited English Proficiency (LEP), was put in place to ensure the programs and activities that Federal Government agencies normally provide in English are accessible to the LEP population. However, the IRS has not ensured all kiosks provide information in languages to meet the needs of the LEP population.
· One kiosk had outdated FAQs. The FAQs available related to tax law for Tax Year 2001 rather than for the current Tax Year 2003. Based on discussions with the vendor, this condition exists on 22 (58 percent) of the 38 kiosks nationwide.
Because the kiosks are stand-alone and not networked or connected to the Internet, manual updates are required. IRS management stated that the vendors responsible for maintaining the kiosks were also responsible for performing these updates. However, there is no guidance on performing updates or controls for the IRS to ensure the kiosks are being timely updated with the same accurate information.
In addition, one kiosk sampled was found not to be operating. Management was unaware the kiosk was not functioning. There was no internal process to monitor kiosk functionality or an external process for taxpayers to report problems with a kiosk.
No process exists to ensure kiosks are placed in the most optimal locations
Since the establishment of the Kiosk Program, placement has been based on criteria established at the time the kiosks were purchased. Some kiosks are located in areas that no longer meet current coverage goals. For example:
· From 1998 to 1999, kiosks were placed in the TACs to reduce wait times. Thirteen kiosks are currently colocated with TACs or an IRS field office.
· From 2001 to 2003, kiosks were placed in locations based on recommendations of the IRS’ design teams. The design teams recommended 49 kiosks be placed in 21 states.
· Current placement of kiosks is based on a model that targets geographic areas in an attempt to provide 85 percent of taxpayers that file a tax return within a geographic area with the ability to obtain customer assistance within a 45-minute commute. Several kiosks are placed in areas where the service delivery exceeds 85 percent and may no longer be necessary.
Additionally, placement of kiosks has not involved internal stakeholders such as the Multilingual Initiative Project and the Stakeholder Partnerships, Education, and Communication Offices, both of which are instrumental in delivering customer service to underserved segments of the taxpaying public. One kiosk the IRS purchased has been in a warehouse since January 2004 because a determination has yet to be made on its placement.
Further, the IRS has not developed a strategy to identify locations for future placement of kiosks. No budgetary commitments have been made outlining anticipated growth in the Program. Instead, kiosks are purchased at the end of the fiscal year with excess funds and the IRS then attempts to identify a location for placement.
No process exists to educate taxpayers on the benefits and locations of the kiosks
The only vehicle that educates taxpayers about the IRS Kiosk Program and kiosk locations is on the IRS web site (IRS.gov) in English but not in Spanish. This information is not always current. As of April 1, 2004, the IRS had expanded service to include 38 kiosks in 20 states, but as of April 16, 2004, the web site provided information on only 30 kiosks.
IRS.gov may not be the most effective method to educate taxpayers about kiosks since the information on kiosks is the same information available on IRS.gov. If taxpayers have access to IRS.gov to find a kiosk, they would not need to use the services a kiosk offers.
Insufficient internal controls and managerial oversight resulted in inefficient use of IRS resources
Inadequate management oversight, including insufficient internal controls, policies, and procedures, have resulted in the inability of the IRS to ensure the Kiosk Program is meeting its goal of providing an alternative method for taxpayers to seek customer service. If management does not improve oversight and internal controls, there is a risk that the IRS’ vision for the future of the Kiosk Program will not be met.
The Government Accountability Office (formerly the General Accounting Office) Standards of Internal Controls in the Federal Government state that internal controls are a major part of managing an organization. They comprise the plans, methods, and procedures used to meet missions, goals, and objectives.
To date, the IRS has spent approximately $685,900 to purchase, update, and maintain kiosks without the ability to ensure taxpayers or the IRS have benefited from these expenditures. The IRS estimates that 54 million taxpayers reside in the states where kiosks are located. Without ensuring the information provided is useful, the IRS may be increasing taxpayer burden should taxpayers rely on inaccurate information.
As the IRS moves forward in developing the necessary processes to effectively and efficiently monitor its Kiosk Program, it might refer to the Department of Housing and Urban Development (HUD) as a best practice on the use of kiosks. The HUD has demonstrated the ability to deliver effective customer service by placing web-based kiosks in public areas nationwide to provide information on a 24 hour/7 day a week basis to citizens who do not have access to the Internet. The HUD’s web-based kiosks are networked and Internet-enabled, allowing the kiosks to be updated quickly and easily, and keeping them consistent with the HUD web site. All content is printable and available in both English and Spanish. The HUD’s kiosks have been recognized with the prestigious “Pioneer Award” by e-Gov and with the Excellence in Government Award.
During the review, results were shared with IRS management. In response, management initiated discussions with responsible kiosk vendors and internal stakeholders to begin to address the concerns raised and to obtain suggestions for improving and enhancing the Program. However, additional actions are needed to ensure the Kiosk Program provides effective customer service.
The Commissioner, Wage and Investment Division, should:
1. Develop guidelines and strategies to enable the efficient and effective oversight of the Kiosk Program including processes to:
a. Monitor kiosk usage and taxpayer satisfaction to ensure the Kiosk Program is meeting its goals.
b. Ensure the information provided on kiosks is current, accurate, and consistent.
c. Monitor kiosk functionality including enabling taxpayers to report problems with kiosks.
d. Ensure kiosks are placed in the most optimal locations, including coordination with key internal stakeholders.
Management’s Response: IRS management agreed with this recommendation and will take the following corrective actions:
· Develop guidelines for analyzing usage reports and other information on the kiosks to identify trends, issues, and areas needing improvement.
· Install the Customer Satisfaction Survey on all kiosks and use the survey results to identify additional services or information needed to help taxpayers meet their tax obligations.
· Develop a Kiosk Checklist requiring field personnel to certify annually that the information on the kiosks is current and accurate.
· Develop a standardized operational review guide for the Kiosk Program to ensure consistency in the review process.
· Use the Service Delivery Model (SDM) to determine the optimal location of kiosks. The SDM provides data on where IRS services are located in relation to where taxpayers live.
2.
Develop a process to educate
taxpayers on the benefits of the Kiosk Program, including the locations of
kiosks.
Management’s Response: IRS management agreed with this recommendation and will determine the feasibility of expanding access to IRS information using HUD kiosks, develop a communication plan to educate taxpayers on the benefits and locations of kiosks, and ensure information on the kiosks meets the needs of taxpayers who do not speak English.
Appendix I
Detailed
Objective, Scope, and Methodology
The overall objective of this review was to determine whether the Kiosk Program provides effective customer service for taxpayers. To accomplish this objective, we:
I. Determined whether the goals and strategies of the Kiosk Program agree with the goals and strategies of the Internal Revenue Service (IRS) and the Wage and Investment Division and whether the IRS has an effective method to monitor the Program.
A. Obtained and reviewed IRS guidance and documentation to identify the intended benefits of the Kiosk Program for both taxpayers and the IRS and held discussions with management to determine whether these benefits are being realized.
B. Obtained any reports or documentation on the Kiosk Program (e.g., documents showing how the IRS tracks the expenses, provides oversight, and measures progress and success).
II. Determined whether the information provided on kiosks is current, accurate, and consistent.
A. Determined whether the IRS has an effective process to ensure information contained on kiosks is current, accurate, and consistent. We interviewed vendors to verify the process.
B. Selected a judgmental sample of 5 of 38 kiosk locations in
California, Connecticut, New Jersey, and Ohio to review the information
contained on the kiosks to determine whether the information was current,
accurate, and consistent among kiosks.
We selected the
C. If the kiosks were found to contain information that was not current, accurate, and consistent, determined why and attempted to assess the effect(s) on taxpayers and the IRS.
III. Determined whether the IRS effectively captures usage and measures taxpayer satisfaction with the Kiosk Program by holding discussions with management.
IV. Determined whether the IRS places kiosks in the most optimal locations and educates taxpayers on their benefits and locations by holding discussions with management, locating kiosks, and determining the accuracy of management information.
V. Determined the effect(s) on taxpayers and the IRS.
Appendix II
Major Contributors to This
Report
Michael
Phillips, Assistant Inspector General for Audit (Wage and Investment Income
Programs)
Randee
Cook, Director
Russell Martin, Audit
Manager
Grace Terranova, Lead
Auditor
Jean Bell, Auditor
Appendix III
Commissioner C
Office
of the Commissioner – Attn: Chief of
Staff C
Deputy
Commissioner for Services and Enforcement
SE
Deputy
Commissioner, Wage and Investment Division
SE:W
Director,
Customer Assistance, Relationships, and Education SE:W:CAR
Director,
Strategy and Resources Management SE:W:S
Acting Chief, Performance Improvement,
Wage and Investment Division SE:W:S:PI
Director,
Chief
Counsel
National Taxpayer Advocate TA
Director, Office of Legislative Affairs CL:LA
Director,
Office of Program Evaluation and Risk Analysis
RAS:O
Office
of Management Controls OS:CFO:AR:M
Audit Liaison: Acting Senior Operations Advisor, Wage and
Investment Division SE:W:S
Appendix IV
This appendix presents detailed information on the measurable impact that our recommended corrective actions will have on tax administration. This benefit will be incorporated into our Semiannual Report to the Congress.
Type and Value of Outcome Measure:
· Inefficient Use of Resources – Actual; approximately $685,900 in purchase, update, and maintenance costs for kiosks (see page 2).
Methodology Used to Measure the Reported Benefit:
We analyzed the Kiosk Investment
Template provided by Field Assistance office management detailing the purchase
costs and dates, along with annual maintenance costs, for the 38 kiosks
purchased since 1998.
We determined the cost to purchase 38 kiosks since
1998 to be over $465,600 as follows:
· We determined the number of kiosks purchased each year:
o
7
kiosks purchased in 1998:
$8,000/kiosk x 6 kiosks = $48,000
$13,895 x 1 kiosk = $13,895
$48,000 + $13,895 = $61,895
o
8
kiosks purchased in 1999:
$11,233/kiosk x 1 kiosk = $11,233
$11,250/ kiosk x 4 kiosks = $45,000
$12,358/ kiosk x 2 kiosks = $24,716
$12,900/ kiosk x 1 kiosk = $12,900
$11,233 + $45,000 + $24,716 + $12,900 = $93,849
o 7 kiosks purchased in 2001: $13,520/kiosk x 7 kiosks = $94,640
o 16 kiosks purchased in 2003: $13,454.38/kiosk x 16 kiosks = $215,270.08
$61,895 + $93,849 + $94,640 + $215,270.08
= $465,654.08
We determined the update and maintenance costs of the kiosks since 1998
to be over $220,200 based on the following:
·
We determined the number of years
each kiosk has been owned by the IRS. We
subtracted the 1-year service agreement to determine the number of years the IRS
paid for upgrades and maintenance. We
then multiplied these years by the annual flat rate maintenance and upgrade
cost per kiosk by vendor as provided by the IRS.
o
7 kiosks purchased in 1998: 5 years paid at $2,622/year = $13,110
$13,110 x 7 kiosks = $91,770
o
8 kiosks purchased in 1999: 4 years paid at $2,622/year = $10,488
$10,488 x 8 kiosks = $83,904
o
7 kiosks purchased in 2001: 2 years paid at $3,181.43 = $6,362.86
$6,362.86 x 7 kiosks = $44,540.02
o
16 kiosks purchased in 2003: 0 years paid
$91,770 + $83,904 + $44,540.02 +
$0 = $220,214.02
We determined the combined
purchase, update, and maintenance costs since 1998 to be approximately
$685,900 ($465,654.08 + $220,214.02 = $685,868.10).
Appendix V
The map was removed due to its size. To see the map, please go to the Adobe PDF
version of the report on the TIGTA Public Web Page.
Kiosks are located in the
following cities and states: Akron,
Ohio; Beckley, West Virginia; Bethel, Alaska; Brooklyn, New York; Butte,
Montana; Cheektowaga (Buffalo), New York; Chicago, Illinois; Cincinnati, Ohio;
Columbus, Ohio; Dallas, Texas; Dayton, Ohio; Dubuque, Iowa; Edison, New Jersey;
El Segundo, California; Fairview Heights, Illinois; Flushing (Queens), New
York; Galveston, Texas; Gillette, Wyoming; Grantsville, Georgia; Hartford,
Connecticut; Heber Spring, Arkansas; Juneau, Alaska; Key West, Florida;
Lansing, Michigan; Manchester, Tennessee; McAllen, Texas; Miles City, Montana;
Nome, Alaska; Pierre, South Dakota; Pontiac, Michigan; Rainbow City, Alabama;
Redwood City, California; Rochester, New York; Springfield, Illinois; Syracuse,
New York; Union, Mississippi; and Waterbury,
Appendix VI
Management’s Response to the
Draft Report
The response was removed due to its size. To see the response, please go to the Adobe
PDF version of the report on the TIGTA Public Web Page.