IMPACT ON TAXPAYERS

The Digital Accountability and Transparency Act of 2014 (DATA Act) establishes Government-wide standards that are designed to provide consistent, reliable, and searchable Government-wide Federal agency spending data that are available to taxpayers.  In addition to summary level information reporting, transaction level information is reported for spending on Federal contracts, grants, and loans.  The DATA Act can provide taxpayers with increased information on how the IRS spends its funds.

The DATA Act requires the Offices of Inspectors General and the Comptroller General of the United States to prepare a series of oversight reports that include an assessment of the completeness, timeliness, quality, and accuracy of data submitted.  This audit was initiated to assess the steps taken by the IRS to prepare for the implementation of the DATA Act.

WHAT TIGTA FOUND

The IRS has made progress in its efforts to implement the requirements of the DATA Act, but much work remains.  These efforts are being performed in coordination with the Treasury Departmental Offices DATA Act Work Group, which is leading the Department of the Treasury’s implementation efforts.

The IRS has established an agency implementation team led by a Senior Accountable Official and reviewed and provided feedback on the standardized definitions for the required 57 data elements established by the Office of Management and Budget and the Department of the Treasury.  The IRS also has performed a limited comparison of the 57 data elements to available internal data source information and has identified system changes needed to meet DATA Act reporting requirements.

TIGTA identified areas that require additional attention.  Specifically, the IRS did not clearly identify the source for 18 of the 57 data elements or document how the 57 data elements are used in its business processes as required.  In addition, the IRS has not finalized the accounting procedures needed to support the posting of transaction level grant program information in its financial system as required by the DATA Act.  Finally, IRS Procurement manually enters data for 10 procurement-related elements required for DATA Act reporting into external systems for every contract award and contract modification.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the Chief Financial Officer update the data source inventory to include all required information and clearly document the data source of all required data elements.  In addition, the Chief Financial Officer should finalize accounting procedures and associated controls to support the posting of transaction level financial information for IRS grant programs.  Finally, the Chief Procurement Officer should pursue methods of automating the capture of data for 10 procurement-related elements required for DATA Act reporting.

In their response, IRS management agreed with our recommendations and provided their planned corrective actions to address the issues detailed in the TIGTA report.