IRS accounting system, a year late, nears completion

While the deployment of a new financial accounting system for the IRS is running a year late, progress has been made on getting the project back on track and it is expected to go live in October after integration and security testing.

Those are the conclusions of a final audit report by the Treasury Inspector General for Tax Administration (TIGTA) on the Internal Revenue Service’s new Integrated Financial System project.

The IFS project is part of the IRS’s Business Systems Modernization strategy, which aims to modernize the agency’s IT systems and processes.

Computer Sciences Corp. in El Segundo, Calif., is the prime contractor and integrator for the project, which includes the IFS deployment. The new general ledger and accounting system, which will be used to generate annual financial statements, is based on software from SAP AG, according to the TIGTA report.

Jim Sheaffer, CSC’s program manager for the IRS modernization effort, said the delays occurred because what should have been a 24-to-30-month project was compressed into a 12-month time frame. “We undertook an aggressive schedule that everyone has since determined was probably too aggressive,” he said. “Everything had to go exactly right for that to work, and everything didn’t go exactly right.”

One of the problems was the complexity of the project, which, he said, was “probably not understood well” when it was initially planned.

The IFS project is now on track to go into operation in October. “We set a very detailed schedule to make that date,” Sheaffer said. Currently, all the software is in place and workers are in the final stages of data conversion practice runs to ensure proper operation of the system. “We’re right on track to meet that schedule, and we’re driving hard to get there.”

CSC said 150 to 190 of its IT employees as well as subcontractors have worked on the project.

Margaret Begg, a TIGTA assistant inspector general for audit, said her agency continues to monitor the project and is hopeful that the latest schedule will be met. “The testing is going well, and all indications are they will be able to meet that timeline,” Begg said. “I hate to say this, but we’ve heard that before. We are hopeful that it is on schedule.”

The TIGTA audit was the second one the agency did to check on the progress of the IRS project. The first audit found that the IFS project team had started systems testing and compatibility checks but concluded that the original schedule, with its October 2003 deployment target date, was overly aggressive.

The latest TIGTA audit says improvements can still be made in transition planning and testing to increase the chances of a successful deployment.