oversight

Tax Administration: Workforce Planning Needs Further Development for IRS's Taxpayer Education and Communication Unit

Published by the Government Accountability Office on 2003-05-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office

GAO          Report to Congressional Requesters




May 2003
             TAX
             ADMINISTRATION
             Workforce Planning
             Needs Further
             Development for IRS’s
             Taxpayer Education
             and Communication
             Unit




GAO-03-711
             a
                                               May 2003


                                               TAX ADMINISTRATION

                                               Workforce Planning Needs Further
Highlights of GAO-03-711, a report to          Development for IRS’s Taxpayer
Congressional Requesters
                                               Education and Communication Unit



Strategic workforce planning helps             Although it has existed for more than 2 and a half years, TEC does not have a
ensure that agencies have the right            strategic workforce plan that includes certain critical elements. (See figure
people with the right skills in the            below.) For example, it has not identified gaps between the number, skills,
right positions to carry out the               and locations of its current workforce and the workforce it will need in the
agency mission both in the present             future, and the strategies to fill gaps. Such a workforce plan for TEC could
and future.
                                               be developed by IRS, the Small Business and Self-Employed Division, and/or
The Internal Revenue Service’s                 TEC. Small Business and Self-Employed Division officials said that TEC
(IRS) Taxpayer Education and                   does not have a strategic workforce plan because they focused on creating
Communication (TEC) unit within                the division and units such as TEC to begin addressing taxpayer needs, and
its Small Business and Self-                   because they first wanted to gain some experience with TEC as a new unit.
Employed Division assists some 45
million small business and self-               IRS and the Small Business and Self-Employed Division are creating a
employed taxpayers. Given the                  process for developing a workforce plan for TEC that in broad terms would
number of taxpayers it is to assist            incorporate the critical elements common to workforce planning. However,
and changes in its priorities and              it is not yet clear whether the workforce plan for TEC will be developed and
strategies, GAO was asked to                   implemented consistent with these critical elements. For example, IRS and
determine whether TEC has a                    the Small Business and Self-Employed Division have not analyzed the skills
workforce plan that conforms to
critical elements for what should
                                               that the TEC workforce will need to meet its program goals or outlined the
be in a plan and how it should be              process and data to be used to do these analyses.
developed and implemented.
                                               A Simplified Model of Critical Elements to Include in the Workforce Planning Process




GAO recommends that the IRS
Commissioner ensure that the TEC
workforce plan is developed in                                                         Set strategic
conformance with the critical                                                           direction
elements of what a plan is to
include and how a plan is to be
developed and implemented.

The Commissioner provided                                     Evaluation of                                   Workforce gap
comments that neither explicitly                              and revisions                                     analysis
                                                                                       Involvement
agreed nor disagreed with GAO’s                               to strategies          of management
recommendation, but said IRS had                                                     and employees
an integrated strategy that
addressed issues raised in the
report. GAO believes the strategy is
useful but did not provide sufficient
detail to ensure the TEC workforce
plan would conform to the critical                                               Workforce strategies
elements.                                                                          to fill the gaps

www.gao.gov/cgi-bin/getrpt?GAO-03-711.

To view the full report, including the scope
and methodology, click on the link above.
                                               Source: GAO.
For more information, contact Michael
Brostek at (202) 512-9110 or
brostekm@gao.gov.
United States General Accounting Office
Washington, DC 20548




                                   May 30, 2003

                                   The Honorable Olympia Snowe
                                   Chair
                                   Committee on Small Business and Entrepreneurship
                                   United States Senate

                                   The Honorable Christopher H. Bond
                                   United States Senate

                                   In all federal agencies, employees are their most important asset in
                                   accomplishing their missions and achieving their goals. The Government
                                   Performance and Results Act of 1993 (GPRA)1 calls for agencies and their
                                   operating divisions to address human capital in the context of
                                   performance management and requires annual performance plans to
                                   describe how agencies will use resources to accomplish their strategic
                                   direction and program goals. As part of human capital management,
                                   strategic workforce planning helps ensure that organizations have the
                                   right number of staff with the right skills and competencies in the right
                                   locations to fulfill their goals both now and in the future given the
                                   strategies they have adopted to carry out their missions.

                                   Certain critical elements are common in workforce plans and planning
                                   processes across leading private and public organizations: (1) involving
                                   top management and employees in developing and implementing a
                                   workforce plan, (2) analyzing gaps between the workforce that exists
                                   currently and that will be needed in the future, (3) devising strategies (e.g.,
                                   hiring or training) to fill workforce gaps, and (4) evaluating the strategies
                                   to ensure that they yield the workforce needed and to make revisions as
                                   necessary.

                                   In an August 2002 report,2 the Treasury Inspector General for Tax
                                   Administration (TIGTA) voiced specific concerns that the Internal
                                   Revenue Service’s (IRS) workforce planning documents do not focus on


                                   1
                                       Pub. L. No. 103-62.
                                   2
                                    Treasury Inspector General for Tax Administration, Expansion of the Workforce
                                   Planning Process Would Increase Opportunities to Identify and Address Staffing Risks,
                                   Reference Number: 2002-10-154 (Washington, D.C.: August 2002).



                                   Page 1                                                 GAO-03-711 Workforce Planning
                   long-term planning. IRS has assumed overall responsibility for developing
                   an IRS-wide workforce plan, which its divisions and units are to support
                   and can supplement with more detailed plans.

                   Within IRS, the Taxpayer Education and Communication (TEC) unit in the
                   Small Business and Self-Employed Division (SB/SE)3 were both created in
                   October 2000 during IRS’s reorganization. TEC is to serve about 45 million
                   small businesses and self-employed taxpayers primarily through efforts to
                   better educate them about their tax obligations. Although the other two
                   units in SB/SE combined many organizations and functions that had
                   existed prior to IRS’s reorganization, TEC was a new unit with new or
                   expanded responsibilities. TEC was to have over 1,200 staff by fiscal year
                   2002 in 15 major field locations and an annual budget of over $60 million.
                   Since its inception, TEC has (1) not reached its staffing level (it had 718
                   staff as of March 2003), (2) reduced the number of major field locations to
                   7, and (3) added priorities and strategies for providing education and
                   outreach to SB/SE taxpayers.

                   Because TEC serves many taxpayers and has had the above changes, you
                   asked us to determine whether TEC has a workforce plan that conforms to
                   the critical elements for what should be in a plan and how the plan should
                   be developed and implemented. To do so, we interviewed IRS officials and
                   reviewed IRS workforce planning documents, reviewed guidance by
                   central management agencies such as the Office of Personnel Management
                   (OPM) and the Office of Management and Budget (OMB) on the critical
                   elements of workforce planning, and reviewed our reports on human
                   capital management. We did not evaluate the adequacy of TEC’s program
                   goals (or operational priorities).4


                   Although TEC has existed for more than 2 and a half years, IRS has not
Results in Brief   ensured that TEC has a strategic workforce plan that includes the critical
                   elements of a plan, such as identifying any gaps between the number,
                   skills, and locations of the current workforce and the workforce needed in
                   the future, and strategies to fill these gaps. Without a strategic workforce



                   3
                       SB/SE’s three operating units are TEC, Customer Account Services, and Compliance.
                   4
                    IRS’s system includes an alignment of unit, division, and IRS strategic goals. TEC has
                   operational priorities that are commonly thought of as program goals. For clarity, we refer
                   to TEC’s operational priorities as program goals that are to link to and support SB/SE’s
                   program goals.




                   Page 2                                                    GAO-03-711 Workforce Planning
             plan, TEC has less assurance that it has the necessary workforce to meet
             its current program goals and to manage changes in its programs and
             goals. SB/SE officials said that TEC does not have a strategic workforce
             plan because they focused on creating TEC to address SB/SE taxpayers’
             needs, and because they first wanted to have some experience with TEC
             as a new unit.

             IRS and SB/SE are creating a process for developing a workforce plan for
             TEC that in broad terms would incorporate the critical elements common
             to workforce planning by leading private and public organizations.
             However, it is not yet clear whether the workforce plan for TEC will be
             developed and implemented consistent with these critical elements. For
             example, IRS and SB/SE have not analyzed the skills that the TEC
             workforce will need to meet its program goals or outlined the process and
             data to be used for these analyses. In developing and implementing a
             strategic workforce plan for TEC, IRS and SB/SE will have to meet
             challenges, such as gathering reliable data on the skills that the current
             workforce has and the future workforce that TEC will need.

             Given the uncertainty about how the strategic workforce plan for TEC will
             be developed, we recommend that the IRS Commissioner ensure that the
             TEC workforce plan is developed in conformance with the critical
             elements for what a plan is to include and how it is to be developed and
             implemented.

             In a letter dated May 28, 2003, the Commissioner of the IRS provided
             comments that neither explicitly agreed nor disagreed with GAO’s
             recommendation. However, the Commissioner said he believed IRS had a
             set of integrated strategies that address the issues raised in our report.
             Although the steps the Commissioner listed as the integrated strategies are
             useful, we did not see sufficient detail in the material IRS provided on
             these steps during our review to be assured that the TEC workforce plan
             would be sufficiently developed and implemented in accordance with the
             critical elements. (See p. 13 for a discussion of agency comments, which
             are reprinted in app. I.)


             SB/SE was formed to address various issues affecting small business and
Background   self-employed taxpayers, such as filing tax returns and paying taxes.
             SB/SE’s strategic goals include increasing compliance and also reducing
             burden among SB/SE taxpayers. As part of SB/SE, TEC is to use various
             strategies, including providing education, outreach, assistance, and other
             services, to support SB/SE taxpayers in understanding and complying with


             Page 3                                         GAO-03-711 Workforce Planning
                       tax laws. IRS created TEC in response to concerns that IRS should better
                       balance such services with its enforcement efforts.

                       In serving taxpayers, TEC is to partner with government agencies, small
                       business groups, tax practitioner groups, and other stakeholders that
                       could advance its education and outreach efforts. To meet an overall goal
                       of increasing voluntary compliance, TEC’s four program goals or priorities
                       are to combat abusive tax schemes, reduce taxpayer burden, promote
                       electronic filing, and negotiate agreements with SB/SE taxpayers on
                       specific ways to voluntarily comply with tax laws.

                       Recent events underscore the importance of human capital management
                       and strategic workforce planning. For example, we designated strategic
                       human capital management as a governmentwide, high-risk area in
                       January 2001, and it was also placed at the top of the President’s
                       Management Agenda in August 2001. In addition, OMB and OPM have
                       made efforts to improve human capital management and strategic
                       workforce planning.5


Critical Elements in   The goal of strategic workforce planning is to ensure that the right people
Workforce Planning     with the right skills are in the right place at the right time. Agency
                       approaches to workforce planning can vary with their particular needs and
                       missions. Nevertheless, looking across existing successful public and
                       private organizations, certain critical elements recur as part of a
                       workforce plan and workforce planning process. Although fluid, this
                       process starts with setting a strategic direction that includes program
                       goals and strategies to achieve those goals and flows through the critical
                       elements to evaluating the workforce plan. Figure 1 uses a simple model to
                       show these critical elements and their relationships to the agency’s overall
                       strategic direction and goals.




                       5
                        Based on an OMB standard on strategic human capital management, OPM issued its
                       Human Capital Assessment and Accountability Framework in October 2002, which lists
                       six “Human Capital Standards for Success,” including one on workforce planning.




                       Page 4                                               GAO-03-711 Workforce Planning
Figure 1: A Simplified Model of Critical Elements to Include in the Workforce
Planning Process




                                             Set strategic
                                              direction




               Evaluation of                                           Workforce gap
               and revisions                                             analysis
                                             Involvement
               to strategies               of management
                                           and employees




                                      Workforce strategies
                                        to fill the gaps




Source: GAO.

Note: Workforce planning is a continual process that involves interaction among the critical elements
and may reshape how the workforce accomplishes its work and achieves the agency’s mission in the
future.


Before developing a workforce plan, an agency first needs to set a
strategic direction and program goals. Setting a strategic direction and
program goals is part of the general performance management principles
that Congress expects agencies to follow under GPRA. A workforce plan
should be developed and implemented to help fulfill the strategic direction




Page 5                                                           GAO-03-711 Workforce Planning
and program goals.6 The critical elements of what this plan should include
and how it should be developed follow.

    •    Involvement of management and employees: Involving various staff
         (from the top to the bottom) cuts across the other critical
         elements. Involving staff in all phases of workforce planning can
         help improve the quality of the plan because staff are directly
         involved with the daily operations. Further, vetting proposed
         workforce strategies to management and those most affected by
         those decisions can build support for the plan and facilitate
         obtaining the resources needed to implement the plan and meet
         program goals. Establishing a communication strategy that
         involves various staff can create shared expectations and a clear
         reporting process about the workforce plan.


    •    Workforce gap analysis: Analyzing whether gaps exist between the
         current and future workforce needed to meet program goals is
         critical to ensure proper staffing. The workforce plan should assess
         these gaps, to the extent practical, in a fact-based manner. The
         absence of fact-based analyses can undermine an agency’s efforts
         to identify and respond to current and emerging challenges.7 Thus,
         the characteristics of the future workforce should be based on the
         specific skills and numbers of staff that will be needed to handle
         the expected workload. The analysis of the current workforce
         should identify how many staff members have those skills and how
         many are likely to remain with the agency over time given
         expected losses due to retirement and other attrition. The
         workforce gap analyses can help justify budget and staffing
         requests by connecting the program goals and strategies with the
         budget and staff resources needed to accomplish them.

    •    Workforce strategies to fill the gaps: Developing strategies to
         address any identified workforce gaps creates the road map to
         move from the current to the future workforce needed to achieve


6
 See U.S. General Accounting Office, A Model of Strategic Human Capital Management,
GAO-02-373SP (Washington, D.C.: March 2002), and Highlights of a GAO Forum: Mergers
and Transformation: Lessons Learned for a Department of Homeland Security and
Other Federal Agencies, GAO-03-293SP (Washington, D.C.: November 2002).
7
 See U.S. General Accounting Office, High-Risk Series: Strategic Human Capital
Management, GAO-03-120 (Washington, D.C.: January 2003).




Page 6                                                 GAO-03-711 Workforce Planning
                               the program goals. Strategies can involve how the workforce is
                               acquired, developed and trained, deployed, compensated,
                               motivated, and retained. Agencies need to know their flexibilities
                               and authorities when developing the strategies, and to
                               communicate the strategies to all affected parties.8

                          •    Evaluation of and revisions to strategies: Evaluating the results of
                               the workforce strategies and making any needed revisions helps to
                               ensure that the strategies work as intended. A key step is
                               developing performance measures as indicators of success in
                               attaining human capital goals and program goals, both short- and
                               long-term. Periodic measurement and evaluation provides data for
                               identifying shortfalls and opportunities to revise workforce plans
                               as necessary.9 For example, an evaluation may indicate whether
                               the workforce plan adequately considered barriers to achieving the
                               goals, such as insufficient resources to hire and train the full
                               complement of staff identified as necessary by the workforce gap
                               analysis.

                      Across the critical elements of a workforce plan, data collection and
                      analysis provide fundamental building blocks. Having reliable data is
                      particularly important to doing the workforce gap analysis. Early
                      development of the data provides a baseline by which agencies can
                      identify current workforce problems. Regular updating of the data enables
                      agencies to plan for improvements, manage changes in the programs and
                      workforce, and track the effects of changes on achieving program goals.


Status of Workforce   IRS issued an Internal Revenue Manual (IRM) section for internal review
Planning at IRS       and comment in March 2003, and IRS expects to finalize it in June 2003.
                      The section outlines a strategic workforce planning system and model, and
                      discusses the roles and responsibilities of IRS and its divisions in this
                      system.



                      8
                       See U.S. General Accounting Office, Results-Oriented Cultures: Using Balanced
                      Expectations to Manage Senior Executive Performance, GAO-02-966 (Washington, D.C:
                      Sept. 27, 2002).
                      9
                        Strategic workforce plans are similar to an agency’s strategic plans under GPRA in that
                      both types of plans include strategies for achieving annual and long-term goals and are
                      linked to the strategic goals. See U.S. General Accounting Office, Managing for Results;
                      Strengthening Regulatory Agencies Performance Management Practices, GAO/GGD-00-10
                      (Washington, D.C.: Oct. 28, 1999).




                      Page 7                                                   GAO-03-711 Workforce Planning
                        For example, IRS is to be responsible for developing the strategic
                        workforce plan across IRS and for analyzing current and future workforce
                        needs. The divisions are to be responsible for providing requested data to
                        IRS’s workforce planning office and for translating the IRS-wide plan into
                        their operations. Thus, a strategic workforce plan for a unit within a
                        division could be developed by IRS, the division, or the unit. If developed
                        by the division or unit, the workforce plan is to be consistent with IRS-
                        wide strategic and workforce plans.


                        Our objective was to determine whether TEC has a workforce plan that
Objective, Scope, and   conforms to the critical elements for what should be in a plan and how it
Methodology             should be developed and implemented. To meet this objective, we

                        •   reviewed human capital literature--including OPM’s Human Capital
                            Assessment and Accountability Framework--as well as workforce
                            planning models at OPM, OMB, and IRS, among others;

                        •   reviewed TIGTA and GAO reports on human capital and workforce
                            planning;

                        •   reviewed IRS and SB/SE documents on their strategic program plans,
                            the plan that guided TEC’s creation and initial staffing, and the annual
                            TEC staffing plan as well as IRS’s draft IRM section on strategic
                            planning and workforce analyses (section 6.251) as of March 2003; and

                        •   interviewed SB/SE and TEC officials on their goals, strategies, and
                            staffing plans as well as IRS and SB/SE Workforce Council officials to
                            determine their purposes, activities, time lines, and challenges.

                        We conducted our work at IRS and SB/SE headquarters from February
                        2003 through April 2003 in accordance with generally accepted
                        government auditing standards. We did not attempt to analyze the
                        adequacy of any analyses done to develop a workforce plan for TEC or the
                        program goals and strategies. The Commissioner of IRS provided
                        comments on a draft of this report, which are discussed in the “Agency
                        Comments and Our Evaluation” section and are reprinted in appendix I.




                        Page 8                                          GAO-03-711 Workforce Planning
                        Since its inception in October 2000, TEC has operated with short-term
TEC Has Not Had a       staffing plans that do not meet the critical elements of what a strategic
Strategic Workforce     workforce plan should include and how it should be developed. IRS and
                        SB/SE are taking steps to develop a strategic workforce plan that will
Plan and Questions      include TEC. However, questions remain about how the critical elements
Remain on How This      will be developed and implemented for TEC.
Plan Will Be
Developed and
Implemented

TEC Does Not Have a     TEC does not have a strategic workforce plan that includes the critical
Workforce Plan That     elements, such as analyses of the workforce gaps and strategies. Without
Includes the Critical   such a workforce plan, TEC has less assurance that it has the necessary
                        workforce to meet its current program goals and to manage changes in its
Elements                programs and goals. IRS and SB/SE officials said that TEC does not have a
                        strategic workforce plan because of the effort in creating the division and
                        its units such as TEC to meet SB/SE taxpayer needs. These officials said
                        this effort has been a significant undertaking, which delayed the
                        workforce planning. SB/SE officials also said that they needed to have
                        some experience with TEC as a new unit and some data on its new TEC
                        workforce before developing a strategic workforce plan for TEC.

                        Since its inception, TEC has operated under two types of staffing plans
                        that did not use the critical elements of a workforce plan. One plan was
                        developed prior to TEC’s creation in October 2000 to guide the hiring and
                        allocation of 1,209 full-time positions for TEC.10 The other plan annually
                        allocates the number of TEC staff to its various locations, functions (e.g.,
                        partnership outreach or marketing service) and four priorities (e.g.,
                        combat abusive tax schemes and promote electronic filing). Although both
                        plans reflect analyses of the number of TEC staff by location, these plans
                        did not address what a TEC workforce plan should include under the
                        critical elements. For example, the plans did not identify any gaps in the
                        workforce needed, any strategies to fill the gaps, or any measures for
                        evaluation purposes.



                        10
                          For various reasons such as budget and recruitment difficulties, and program goal
                        changes, TEC has not filled all these authorized positions and had 718 staff on board as of
                        March 2003. TEC also has received 13 additional positions by assuming responsibility in
                        November 2001 for promoting electronic filing.




                        Page 9                                                     GAO-03-711 Workforce Planning
IRS and SB/SE Are        Recognizing the need for workforce planning, both IRS and SB/SE are
Developing a Workforce   developing strategic workforce plans and a planning process for TEC and
Plan for TEC, but        other IRS entities that broadly reflect the critical elements. However,
                         questions remain because of the lack of details on how any workforce plan
Questions Remain         for TEC will address the critical elements.

                         IRS and SB/SE each convened workforce planning councils, consisting of
                         executives and human capital managers, to oversee the development of a
                         strategic workforce plan that would include TEC. IRS started its council in
                         the fall 2001 at the direction of the IRS commissioner. SB/SE started its
                         council in February 2003 to create a more detailed workforce plan for TEC
                         and its other units than would be provided in the IRS-wide plan.

                         Our review of IRS and SB/SE documents showed that they both intend to
                         use the critical elements of strategic workforce planning. These
                         documents include models and discussion that reference the critical
                         elements. For example, these models refer to elements such as analyzing
                         the gap in the workforce and developing strategies to reduce the
                         workforce gap.

                         Although IRS and SB/SE are taking steps to develop a strategic workforce
                         plan for TEC, these steps have not yet produced enough details to specify
                         how the critical elements will be developed and implemented for TEC. IRS
                         and SB/SE officials said that they recognize the need to further define how
                         the strategic workforce plan will be developed and implemented over
                         time.

                         For example, the degree to which top management and employees will be
                         involved in developing and implementing the workforce plan for TEC is
                         not yet clear. The draft IRM section refers to their involvement but does
                         not provide details on the extent and nature of their involvement.

                         As for identifying any workforce gaps at TEC, it is not clear what analyses
                         will be done. As of April 2003, neither IRS nor SB/SE has analyzed the type
                         of TEC workforce needed in the future to meet program goals or the skills
                         of the current TEC workforce. Both types of analyses are needed to
                         determine the gap between the current TEC workforce and the workforce
                         needed in the future. Nor is it clear how and when these analyses will be
                         done. SB/SE officials said that given resource limitations, they have not
                         done the necessary workforce analyses for TEC or developed an
                         implementation schedule for when the analyses would be done.




                         Page 10                                         GAO-03-711 Workforce Planning
As of April 2003, IRS or SB/SE analyses have dealt with other workforce
issues. While useful, the analyses do not address the TEC workforce gap in
terms of the skills needed now or in the future to meet program goals,
particularly newer ones such as promoting electronic filing or negotiating
voluntary compliance agreements. For example,

•    IRS has analyzed 12 mission-critical positions in terms of potential
     losses (e.g., retirement) from the current number of positions. These
     analyses have not focused on TEC because the analyses, as well as the
     eventual IRS-wide workforce plan, are intended to be done at a high
     level with minimal references to TEC.11

•    SB/SE asked officials in TEC and its other units in February 2003 to
     use a checklist to self-assess their current workforce and planning
     capabilities against OPM criteria. SB/SE has not indicated how it will
     verify and use the subjective check marks made by the officials to
     determine workforce gaps in TEC, particularly in skills needed.

•    No analyses have been provided to justify plans for fiscal year 2004 to
     hire 250 additional staff in TEC to combat abusive tax schemes and to
     not hire any additional staff to address three other TEC goals. IRS and
     SB/SE workforce officials had told us that the 250 staff estimate came
     from the budget and finance staff in SB/SE. In a subsequent meeting
     during May 2003, TEC and SB/SE officials said that IRS has decided
     against any staff expansion in TEC due to other budget
     considerations.

Finishing the analyses of TEC workforce gaps is important for the rest of
the workforce plan. The other two critical elements involving strategies
and evaluation cannot be finished until IRS and SB/SE know the specific
needs of the current and future TEC workforces.

As IRS and SB/SE officials develop and implement a workforce plan for
TEC, major challenges are likely to arise. For example, these officials cited
the challenge of balancing daily operational demands with the capacity to
forecast workforce needs in terms of staff numbers, skills, and locations.
Another challenge is gathering reliable data on the attrition, retirement,



11
  Most of the analyses combine the tax specialist position with the tax resolution
representative and tax compliance officer positions. Distinctions are important because the
skills for these positions vary. Furthermore, the analyses do not break out the tax
specialists who work in TEC from elsewhere in IRS.




Page 11                                                   GAO-03-711 Workforce Planning
                     and skills of the current workforce to do analyses that are critical to
                     workforce planning. IRS and SB/SE officials also pointed to budget
                     fluctuations that could limit their strategies to close gaps in the workforce
                     needed by TEC over time. For example, the budget may be insufficient to
                     replace losses of TEC workforce skills due to retirement. Finally, they said
                     that if the workforce plan could adversely affect current TEC employees,
                     dealing with employee unions to address the concerns could be a
                     challenge. We have reported on these and other challenges that any
                     agency faces in doing successful workforce planning.12


                     As discussed in our previous reports, and echoed by OPM and OMB
Conclusions          guidance, a strategic workforce plan enables an agency to identify gaps in
                     its current and future needs, select strategies to fill the gaps, and evaluate
                     the success of the plan to make revisions that may be needed to better
                     meet program goals. Such a workforce plan does not yet exist for TEC.
                     Without such a plan, TEC is less likely to have the right number of staff
                     with the right skills in the right places at the right time to address its
                     priorities. Further, it is difficult to justify budget and staffing requests if
                     the workforce needs are not known.

                     IRS and SB/SE have started taking steps to develop a strategic workforce
                     plan for TEC based on the critical elements under OPM and OMB
                     guidelines, and our guidelines for what a plan is to include and how it is to
                     be developed and implemented. However, IRS and SB/SE have not yet
                     identified many details on how the plan for TEC will incorporate the
                     elements. Without these details, we cannot be certain that the critical
                     elements will be used and contribute to the program goals.


                     Given the uncertainty on how the workforce plan for TEC will be
Recommendation for   developed and implemented, we recommend that the Commissioner of
Executive Action     Internal Revenue ensure that the workforce plan for TEC be developed in
                     conformance with the critical elements for what a plan should include and
                     how a plan should be developed and implemented.




                     12
                      See U.S. General Accounting Office, Acquisition Workforce: Status of Agency Efforts to
                     Address Future Needs, GAO-03-55 (Washington, D.C.: Dec. 18, 2002).




                     Page 12                                                 GAO-03-711 Workforce Planning
                     We requested comments on a draft of this report from IRS. The
Agency Comments      Commissioner of Internal Revenue provided written comments in a letter
and Our Evaluation   dated May 28, 2003. (See appendix I.) These comments neither explicitly
                     agreed nor disagreed with our recommendation to ensure that a workforce
                     plan for TEC is developed in conformance with the critical elements of
                     what a plan should include and how it should be developed and
                     implemented.

                     The Commissioner did say that IRS strongly endorses the development of
                     a strategic workforce plan and that IRS has made progress on this effort,
                     listing eight steps that have been taken. The Commissioner also said that
                     the steps were a set of integrated strategies that reflect IRS’s commitment
                     to improve its workforce planning efforts and that they addressed the
                     issues raised in our report. To the extent that IRS had told us about how
                     these steps contributed to a workforce plan for TEC, our report discusses
                     them when we describe IRS’s efforts to create such a plan using the
                     critical elements. Although we believe that these steps are useful, we
                     made our recommendation because we did not see enough details to be
                     assured that a workforce plan for TEC would be sufficiently developed
                     and implemented in accordance with the critical elements.

                     We are encouraged that IRS strongly endorses development of a strategic
                     workforce plan. We look forward to seeing a workforce plan for TEC.


                     As we agreed with your staff, unless you publicly release the contents of
                     this report earlier, we will not distribute it until 30 days after its issue date.
                     At that time, we will send copies of this report to the Ranking Minority
                     Member of the Senate Committee on Small Business and
                     Entrepreneurship. We will also send copies to the Commissioner of
                     Internal Revenue and other interested parties. We will make copies
                     available to others on request. In addition, the report will be available at
                     no charge on the GAO Web site at http://www.gao.gov.




                     Page 13                                             GAO-03-711 Workforce Planning
This report was prepared under the direction of Thomas Short, Assistant
Director. Other major contributors include Catherine Myrick and Grace
Coleman. If you have any questions or would like additional information,
please contact me at (202) 512-9110 or brostekm@gao.gov or Thomas
Short at (202) 512-9110 or www.shortt@gao.gov.




Michael Brostek
Director, Tax Issues




Page 14                                        GAO-03-711 Workforce Planning
         Appendix I: Comments from the Internal Revenue Service
Appendix I: Comments from the Internal
Revenue Service




         Page 15                                                  GAO-03-711 Workforce Planning
           Appendix I: Comments from the Internal Revenue Service




(440185)
           Page 16                                                  GAO-03-711 Workforce Planning
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.
                         The General Accounting Office, the audit, evaluation and investigative arm of
GAO’s Mission            Congress, exists to support Congress in meeting its constitutional responsibilities
                         and to help improve the performance and accountability of the federal
                         government for the American people. GAO examines the use of public funds;
                         evaluates federal programs and policies; and provides analyses,
                         recommendations, and other assistance to help Congress make informed
                         oversight, policy, and funding decisions. GAO’s commitment to good government
                         is reflected in its core values of accountability, integrity, and reliability.


                         The fastest and easiest way to obtain copies of GAO documents at no cost is
Obtaining Copies of      through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full-
GAO Reports and          text files of current reports and testimony and an expanding archive of older
                         products. The Web site features a search engine to help you locate documents
Testimony                using key words and phrases. You can print these documents in their entirety,
                         including charts and other graphics.
                         Each day, GAO issues a list of newly released reports, testimony, and
                         correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site
                         daily. The list contains links to the full-text document files. To have GAO e-mail
                         this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily
                         E-mail alert for newly released products” under the GAO Reports heading.


Order by Mail or Phone   The first copy of each printed report is free. Additional copies are $2 each. A
                         check or money order should be made out to the Superintendent of Documents.
                         GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a
                         single address are discounted 25 percent. Orders should be sent to:
                         U.S. General Accounting Office
                         441 G Street NW, Room LM
                         Washington, D.C. 20548
                         To order by Phone:     Voice:    (202) 512-6000
                                                TDD:      (202) 512-2537
                                                Fax:      (202) 512-6061


                         Contact:
To Report Fraud,
                         Web site: www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in      E-mail: fraudnet@gao.gov
Federal Programs         Automated answering system: (800) 424-5454 or (202) 512-7470


                         Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800
Public Affairs           U.S. General Accounting Office, 441 G Street NW, Room 7149
                         Washington, D.C. 20548