The IRS has made improvements to its budget request and cost estimates but further actions are needed, GAO has said.
It said that for the 2014 budget formulation process, the IRS implemented a new process that uses templates to help screen, prioritize, and select new initiatives before detailed business cases are developed to support funding requests, but that variations in the detail and scope of template information may have contributed to incomplete submissions to senior leadership. (The President has requested $12.9 billion for the IRS, an increase of 9 percent over fiscal 2012 actual levels.)
Still, the IRS has significantly improved its Affordable Care Act cost estimate, GAO said. For example, it said the December 2012 estimate is more comprehensive, reflecting the full life-cycle cost of the program – estimated at $1.89 billion for fiscal 2010 – 2026.
A few areas of improvement remain, primarily regarding the accuracy and credibility of the cost estimate (the agency did not explain variations in the estimate over time) and the IRS did not obtain a second cost estimate that could be used to assess the reasonableness of the $1.89 billion estimated program costs, according to GAO-13-835.
Further, it said that while the IT systems for the health care law met dollar thresholds as a major investment for public reporting, IRS did not report this as such.
The IRS agreed with recommendations to improve budget formulation guidance for new initiatives; improve the accuracy and credibility of future updates to the PPACA cost estimate as well as report the related IT investment publicly; and consolidate major IT investment reporting.
