Monday, June 27, 2011
The Treasury Inspector General for Tax Administration
today released Challenges Continue With Reporting Complete and Accurate Information in the Federal Financial Management Improvement Act Remediation Plan
The IRS's financial management systems are unlikely to comply with Federal law before 2014. ... The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that Federal financial management systems provide accurate, reliable, and timely financial management information to Government managers. In November 2010, the GAO reported that the IRS's financial management systems do not comply with FFMIA requirements. Specifically, the IRS does not post tax-related transactions in conformance with Federal Government requirements and its records lack adequate traceability for taxes receivable. The IRS also has material weaknesses in its internal controls over both information security and unpaid assessments. The information security material weakness compromises the accuracy and availability of the IRS's financial information and places sensitive information regarding taxpayers and IRS operations at risk. The unpaid assessments material weakness impacts the IRS's ability to effectively manage unpaid taxes, penalties, and interest.
As required by FFMIA, TIGTA assessed the status of the IRS's efforts to meet its target dates for remediating its noncompliance. "The IRS's continued noncompliance with FFMIA will need to be closely monitored," said J. Russell George, the Treasury Inspector General for Tax Administration. "Complete and reliable financial information is critical to the IRS's ability to accurately report on the results of its operations to both internal and external stakeholders, including taxpayers."