The full budget issued by the White House echoes President Trump’s “skinny” spending outline released earlier in the year, and he’s looking for about a quarter of a billion dollars in savings from the Internal Revenue Service (IRS). While it might seem penny-wise and pound-foolish to shrink the budget of the federal government’s revenue collection arm, the truth is that there are huge efficiencies that can be achieved at the IRS.
Here’s the bottom line: The scope of information technology (IT) waste and abuse at the IRS is so massive that reining it in would pay several times over for the proposed $239 million cut in the agency’s budget. The International Association of Information Technology Asset Managers (IAITAM) has looked closely at federal IT waste and we found about $2.76 billion of it at the IRS. That works out to roughly $31,000 per tax agency employee – or more than three times the average American’s tax bill of $9,118.
And the concern here is not just about the sheer waste involved in what amounts to the torching of mountains of federal tax dollars. The nearly $3 billion the IRS wastes each year on Information Technology (IT) and IT security leaves taxpayers and the government in greater danger of breaches from lost and stolen hardware, the use of outdated software, missing software patches and other cybersecurity dangers.
What is needed here? There’s no mystery about what any responsible business would do when faced with the same problem. Until the IRS adopts a rigorous approach to IT Asset Management (ITAM), by creating an IRS ITAM team that would be charged with the day-to-day management of all assets within the IRS, the federal revenue agency will continue to waste billions of dollars in taxpayer funds and is unlikely to stem IT-related failures seen in recent years at the IRS. (More on that below.)
According to IAITAM, private industry in the United States spends an average of $4,600-$4,900 per employee on IT – less than $5,000 per person. The IRS could save roughly $31,000 per employee. The budget savings from implementing private sector IT Asset Management protocol with 79,890 IRS employees could result in a total savings of roughly $2.76 billion or 22 percent of the total budget of the IRS in 2016. To meet the reduction level set by President Trump, the IRS could easily reduce its budget without sacrificing collection capabilities, and reduce its workforce. Those actions would actually increase the security of taxpayer and government data.
Here is a by-the-numbers look at recent IRS IT failures that could be addressed through better ITAM practices.
- 57 percent: Nearly three out of five mobile device inventory records that were incorrect at the IRS, where 94 percent of employees are provided with a mobile device. Further, the IRS paid monthly service fees for almost 6,800 devices that were not inventoried at all (almost 17 percent of total devices, and almost $2 million per year in service fees). For more than 700 employees, the IRS paid for multiple mobile devices (between two and five) despite the prohibition against multiple devices.
- $12 million: The amount wasted on a cloud-based email system that was incompatible with exiting email systems.
President Trump is on the right track in looking for new economies at the IRS. Every person in America who pays taxes wants to believe their hard-earned dollars are being put to good use. If we are going to run the federal government like a business, then we owe it to taxpayers to start with the IRS.
The sad truth is that elected officials and agency administrators are failing to take a bottom-up approach to the purchase, control, inventory, and proper destruction of such IT assets as software, computer hard drives and mobile devices. In addition to saving taxpayers a massive amount of money, a comprehensive ITAM program would protect taxpayer and government data from getting into the hands of foreign hackers and those wishing to exploit the insecurity of IRS-held taxpayer data.
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