Inspector General Says IRS Wasted $3.5 Million on ID-Card Program

By Jim Abrams
Associated Press
Friday, December 21, 2007

The Internal Revenue Service paid a contractor $188,000 to provide one person to do clerical work over 11 months.

The contract was one example of financial waste contained in a government report on the tax agency's involvement in a program ordered by President Bush in 2004 to develop more-secure identification cards for federal workers.

The Treasury Department's inspector general for tax administration also said the IRS needlessly spent almost $2 million on a computer security system that the tax agency doesn't plan to use.

The IRS was responsible for developing and implementing the program to provide identification cards to about 150,000 employees at the Treasury Department. The projected cost of the program was $421 million over 14 years.

To provide one person for a clerical support job updating contact lists, assigning and tracking equipment, and processing trip reports, a contractor was paid $128 an hour.

Auditors for the inspector general's office were told by IRS program managers that the work could have been done by an employee with a ranking of GS-7, eligible for a starting salary of about $38,000 a year plus benefits. The contractor and the temporary worker it provided were not identified.

Of the $30 million the IRS has committed for the project, about $3.5 million was spent on acquisitions that should have been avoided, the report said.

"The IRS accepted this responsibility for the Treasury Department," said the Treasury inspector general for tax administration, J. Russell George. "It must change its present course and proceed in an efficient, cost-effective and responsible manner."

Steve Ellis, vice president of Taxpayers for Common Sense, a private budget watchdog group, said it was "staggering" that more than 10 percent of initial spending for the project had been wasted.

"If any agency should be responsible for our taxpayer dollars, it should be the IRS," he said. "They are in the front lines of collecting revenue from our citizens, and you want them to be careful with every dime they spend."

The IRS, in a statement yesterday in response to the report, said it agreed with the inspector general's findings and had acted to ensure more rigorous contract management and oversight. It noted that last May it shifted from a stand-alone approach to using General Services Administration solutions in issuing the new identification cards.

Among the costs the report said should have been avoided:

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