The Sustaining Infrastructure Program manages the replacement of aged information technology hardware infrastructure that provides the foundation for technology services and supports the IRS’s most critical business needs.  The management, maintenance, and ongoing enhancement of the IRS’s information technology are central to the reliability of its operations and to the successful accomplishment of its mission to “provide America’s taxpayers top-quality service.” The overall objective of this review was to determine the efficiency and effectiveness of key ongoing or planned activities aimed at addressing the IRS operational challenge of replacing its aged hardware infrastructure.

While the Sustaining Infrastructure Program spends on average nearly 99.7 percent of its allocated budget each year, the IRS has not yet achieved its stated objective of reducing its aged information technology hardware to an acceptable level of 20 to 25 percent.  In fact, this percentage has steadily increased from 40 percent at the start of Fiscal Year 2013 to 64 percent at the start of Fiscal Year 2017.  The IRS estimates that the current replacement cost for its aged information technology hardware is approximately $430 million.

Aged information technology hardware still in use introduces unnecessary risks.  TIGTA analyzed 107 incident tickets most likely to involve aged hardware failures in Fiscal Year 2016 and found that the aggregate length of time to resolve the issues was approximately 4,541 hours.  These aged hardware failures may have also had a negative effect on IRS employee productivity, security of taxpayer information, and customer service.

Each year, the IRS provides varying amounts of funds to the Sustaining Infrastructure Program from a number of different internal sources, including the IRS’s base year operations support appropriation, user fees, and carryover money from previous fiscal years not used by other IRS business units.  The IRS has a process in place to monitor each financial plan and identify potential surplus funds.  However, additional coordination to identify the availability of surplus funds earlier in the process and development of plans to expeditiously spend these funds on the aged hardware inventory are needed.  Such coordination may have resulted in a combined total of up to $67 million in additional unspent funds being available for the Sustaining Infrastructure Program.

TIGTA recommended that the Chief Information Officer conduct additional coordination with the Chief Financial Officer and other business unit executives to identify the availability of additional transfers, reprogramming, and possible carryover funds earlier in the process to maximize their use and develop plans to expeditiously spend any potential surplus funds that might become available to aid in reducing its aged information technology hardware infrastructure.

In response to the report, the IRS agreed with two recommendations and disagreed with one.  In its Fiscal Year 2018 budget submission, it requested the realignment of funds and additional multiyear authority.  This should be of significant benefit if funded as requested.  However, given the substantial portion of its hardware infrastructure that is beyond its useful life, additional actions will likely be needed.

To view the report, including the scope, methodology, and full IRS response, go to: https://www.treasury.gov/tigta/auditreports/2017reports/201720051fr.pdf.