Improving productivity by changing processes is a strategy SB/SE is using  to address these declining trends. Enforcement Process Improvement Projects Included Many Key Steps but SB/SE Lacked a Planning Framework

The planning for each of the four projects we reviewed included most of  the key steps in our process improvement framework, but none of the  projects included all of the steps. For example, in the Collection Taxpayer  Delinquent Account Support project, SB/SE did not consider alternatives to  achieving the project’s goal of identifying the best cases to assign to  collections staff. Two projects had completed plans for outcome assessments at the time of  our review. In the course of our discussions with SB/SE managers about the steps that  their projects did and did not include, we learned that SB/SE does not have  its own guidance or framework that describes the steps to be followed in  planning process improvement projects. This, in turn, exacerbates the risk of projects not addressing  appropriate process problems, developing a less than optimal target  process, ineffectively implementing the project, inaccurately assessing  project outcomes, or mismanaging the change to the new process. IRS Enforcement Productivity Data Only Partially Adjusted for Complexity and Quality

The data available to SB/SE managers to assess the productivity of their  enforcement activities, identify processes that need improvement, and  assess the success of their process improvement efforts are only partially  adjusted for complexity and quality of cases worked. Existing statistical methods could be used in the short  term, with currently available data on case complexity and quality to  improve productivity measurement. To the extent that  IRS succeeds in improving enforcement productivity through these  projects, resources will be made available for providing additional services  to taxpayers and addressing the declines in tax enforcement programs. The 20-step framework that we developed for this report is an example of  such guidance. A  measure of productivity like cases closed per staff year that shows an  increase may not indicate a real gain in efficiency if the mix of cases has  shifted to less difficult cases or the quality of the work has declined. GAO’s Business Process Reengineering Assessment Guide recognizes that  the steps for planning process improvement need to be adapted for the  magnitude of the projects and the particular circumstances of an  organization. We selected one project each in  the audit and compliance support areas.
Why GAO Did This Study

In recent years, the Internal Revenue Service (IRS) has experienced declines in most of its enforcement programs, including declines in audits and in efforts to collect delinquent taxes. Increasing enforcement productivity is one strategy that can help reverse these declines. To this end, IRS is currently planning and has begun implementing enforcement process improvement projects. GAO was asked to assess the extent to which the planning for the projects followed steps consistent with both published GAO guidance and the experiences of private sector and government organizations. Specifically, GAO assessed the extent to which four judgmentally selected projects followed the 20 planning steps.

What GAO Found

Planning for the four enforcement process improvement projects GAO reviewed included most of the 20-step framework developed to assess the projects. This increases the likelihood that projects target the right processes for improvement, choose the best target process from among alternatives, effectively implement the project, accurately assess project outcomes, and properly manage the change to the new process. However, none of the projects completed all of the steps. For example, some projects did not fully identify the causes of productivity shortfalls, leaving a risk that the project did not fix the right problem. In the course of this work, GAO found that IRS managers do not have guidance about the steps to follow in planning process improvement projects, increasing the possibility of omitting steps. A recurring issue in the four projects was that IRS's enforcement data only partially adjust for the complexity and quality of cases worked. This issue is also a problem for IRS enforcement productivity data generally. Failing to adjust for both complexity and quality increases the risk that trends in productivity will be misunderstood. For example, a decline in the number of cases closed per employee at the same time that case complexity is increasing may not be a real decline in productivity. GAO recognizes that some options for improving productivity data could be costly. However, costs could be mitigated by using existing statistical methods and IRS complexity and quality data.