Audit Urges End of IRS's Employee Tuition Plan

"It is important that these enforcement investments be fully funded," Snow told a House Appropriations subcommittee.

But for several years, lawmakers have balked at such proposed increases, often arguing the IRS should be more efficient with the budget it has. Treasury officials have been criticized for using IRS agents for protection details, for cost overruns on the IRS's new computer system and for other missteps.

The audit on the tuition program will add more fodder for congressional critics.

"Failing grades involving the use of taxpayers' money are not acceptable," Baucus said.

IRS management did little to dispute the audit's conclusions. IRS officials yesterday referred to a formal response drafted last month by Beverly Ortega Babers, the IRS's chief human capital officer.

"We agree that the Human Resources Investment Fund is not the most cost-effective method of providing tuition assistance to IRS employees," she wrote.

Indeed, record-keeping for the program has been so ineffective that it would be "cost prohibitive" to track down all employees who received tuition aid back to 2000 to see whether they enrolled and passed their courses, the response said. IRS management promised instead to review records back to 2003.

Babers said the agency "will consider" eliminating the program, but she warned that any such move would have to come through contract negotiations with the National Treasury Employees Union, which are not set to begin until June 2006.

Colleen M. Kelley, the union's president, agreed that changes are needed to sharply bring down administrative costs. But she said the union will fight to keep the program, which she said is far more effective than alternative training programs suggested by the inspector general.

"Obviously it's a monitoring and a management failure," she said. "We would resist elimination of the program."