UNITED STATES ENVIRONMENTAL PROTECT
WAlttlNOTON, O.C 104*0
,5'
Ntt 191990
OFFICI OP
THf
MEMORANDUM
SUBJECT:
FROM:
Audit Report No. M5BFLO-11-0024-0100200
Audit of Reimbursable IRS Super fund
Costs, Fiscal 1988
*#
TO:
Kenneth D. HocJonan »"*
Divisional Inspector General
for Audit
Internal Audit Division (A-109)
Harvey G. Pippen
Director, Grants Administration
Division (PM-216)
Attached for your information is the subject audit report.
We are not making any recommendations; however, you should know
that the IRS auditors' examination raised several issues of
importance to you.
We are closing this report upon issuance. Should your staff
have any questions concerning this memorandum, please have them
contact Fran Tafer, Audit Manager, on 475-6753.
Attachment
cc: Director, Office of Program Management (OS-240)
Chief, Financial and Administrative Management
Section (08-240)
Chief, Grants Information and Analysis
Branch (PM-216F)
HEADQUARTERS LIBRARY
PROTECTION AGENCY
D.C. 20460
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FISCAL YEAR^
TABLE ?F CpNTENys
Page
Digest i
Introduction 1
Audit Objectives and Scope of Review 3
Results of Review 3
Full Reimbursement of the service's Costs
Clearly Stated Interagency Agreement
Earnings Reflective of Actual Costs Incurred . . , ,
Quarterly Billings of Reported Earnings
Periodic Reports on Service Centers' Effectiveness .
Detailed Objectives and Scope of Review 11
Management Response
3
5
6
7
9
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INTERNAL AUDIT REPORT
REVIEW OP REIMBURSABTf ^tf PflRFUND COSTS
FISCAL YEAR 1988
Digest
We reviewed the Service's Fiscal Year 1988 Interagency
Agreement with the Environmental Protection Agency (EPA). The
Service provides EPA and the Office of Tax Analysis statistical
tabulations on environmental taxes categorized by type of
chemical. The EPA reimburses the Service with monies from the
Hazardous Substance Response Trust Fund (Superfund).
The Service has generally complied with the terms of the
Agreement and the costs billed to EPA were reasonable. However,
we identified that the Service's actual FY 1988 costs ($120,266)
were significantly more than the Agreement amount ($32,000) and
the Agreement did not clearly state the work to be performed.
Secondly, earnings were not reported as actual costs were
incurred and EPA was not billed quarterly, as required. Finally,
service centers were not effectively performing their
responsibilities in support of the Superfund project.
To improve management and financial controls to ensure the
Service obtains full and timely reimbursement for the costs
incurred in performing work for EPA, we recommend that management
should:
Seek from the EPA full reimbursement for the actual
costs in providing th* statistical tabulations (page
4);
Ensure the Agreement clearly states the tax periods for
which processing is to b* performed and realistic
completion dates for the quarterly submissions of tax
tabulations (page 6);
Report earnings as costs are incurred and ensure
reimbursement is for the total amount entitled under
the Agreement (page 7);
Develop written procedures for operational reviews to
ensure the status of reimbursable billings is
adequately monitored (page 8); and,
Provide reports to service center management on the
effectiveness of the support received on the Superfund
project (page 10).
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w
e
The Service has a second Interagency Agreement with EPA for
which part of the reimbursement is paid froa the Superfund. The
Agreement is for services the EPA receives from the Cooperative
Administrative Services Unit (CASU) in the Midwest Region (MWR).
A separate Internal Audit review of the Service's accounting
responsibilities for the CASU was conducted by the MWR and the
results will be reported to local IRS management. The audit
concluded that overall the CASU costs charged to each
participating agency were reasonable and fairly represented their
share of the total costs. The audit did, however, find that the
accounting system did not have adequate audit trails and
documentation to perform a complete verification of all the costs
accumulated and billed to the various agencies.
Management agreed with the facts and conclusions presented
in the report and has proposed corrective actions to address our
recommendations.
li
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INTERNAL APpIT REPORT
REVIEW OF REIMBURSABLE SUPERFIMD
FISCAL YEAR 1988
Introduction
This report presents the results of our review of the Fiscal
Year 1988 Interagency Agreement for the Service to provide tax
tabulations to the Environmental Protection Agency. This review
is required by the Superfund Amendments and Reauthorization Act
of 1986. We performed our review during the period, May through
September 1989, in the Statistics of Income, Human Resources and
Finance Divisions in the National Office and, in the Detroit
Computing Center. The audit vas conducted in accordance with
generally accepted government auditing standards.
Backarqynd
The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA) established the Hazardous
Substance Response Trust Fund (commonly referred to as the
Superfund) which is administered by the Environmental Protection
Agency (EPA). The Superfund finances the costs of cleaning up
chemical disposal sites and spills of hazardous wastes.
Taxpayers who produce or import petroleum or specified hazardous
chemicals are required to pay environmental taxes. Taxpayers
file Form 6627, Environmental Taxes, with their Form 720,
Quarterly Federal Excise Tax Return. CERCLA expired on September
30, 1985; however, the Superfund Amendments and Reauthorization
Act of 1986 (SARA) reinstated the environmental taxes effective
after December 31, 1986 to January l, 1992.
In addition, SARA requires the Inspector General of each
agency to submit a report on the annual audit of all payments,
obligations, reimbursements, or other uses of the Fund in the
prior fiscal year, to assure the Superfund is properly
administered and that claims are appropriately and expeditiously
considered.
The Service provides EPA and the Office of Tax Analysis
(OTA) in Treasury with tabulations on the amount of environmental
taxes categorized by type of chemical. The Service enters into
an annual Interagency Agreement with EPA to provide this
information and receives reimbursement for the expenses incurred.
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After code and edit processing in the service centers, Forms
6627 and related Forms 720 are photocopied and sent to the
Statistics of Income (SOI) Division in the National Office. SOI
personnel enter data from the Forms 6627 onto a computer database
where the information is compiled and the tabulations are
generated and then sent to EPA and OTA. The Detroit Computing
Center (DCC) provides the computer programming support for this
project.
Both SOI and DCC report their costs for this project on a
monthly basis and EPA is billed by the Financial Operations
Branch quarterly. For FY 1988, the Interagency Agreement amount
was $32,000; and, EPA vas billed $31,832.
The Service has a second Interagency Agreement with EPA for
which part of the reimbursement is paid from the Superfund. In
the Midwest Region (MWR), the Service is the lead agency of the
Cooperative Administrative Services Unit (CASU) for the federal
building in Chicago, Illinois. The CASU is responsible for
providing administrative services for participating agencies in
the building. As the lead agency, the Service is responsible for
billing each agency for its share of the expenses. The services
provided include photocopying and printing; labor and moving;
and, dock and warehousing.
In FY 1988, the CASU Interagency Agreement amount was
$946,416 of which $233,985 vas allocated for the Superfund
offices. In FY 1980, EPA officials allocated 24% of actual CASU
charges to the Superfund based on the number of Superfund
employees in the building. EPA was billed and paid a total of
$989,321 for its CASU costs of which $237,437 (24%) was paid from
the Superfund. We were advised by EPA officials that the $42,905
in actual costs which exceeded the FY 1989 Agreement amount was
paid from FY 1989 funds. The FY 1989 Interagency Agreement has
recently been adjusted to compensate for the FY 1988 shortage.
A separate internal audit review of the Service's accounting
responsibilities for the CASU vas conducted by the MWR and the
results will be reported to local IRS management. The audit
concluded that overall the CASU costs charged to each agency were
reasonable and fairly represented their share of the total costs.
The audit did, however, find that the accounting system did not
have adequate audit trails and documentation to perform a
complete verification of all the costs accumulated and billed to
the various agencies.
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TT1___„.». wy« or Heyi^y
our overall objective vas to determine whether the costs
charged against the Superfund Interagency Agreement for Fiscal
Year 1988 vere accurate, reasonable and allowable; and, if the
prior financial and management control deficiencies related to
the Agreement were corrected. Detailed audit objectives and
scope of review are included as Attachment I.
Results of Review
Generally, the Service has complied with the provisions of
the FY 1988 Interagency Agreement for the environmental tax
tabulations; however, improvements to the management and
financial controls are needed. The FY 1988 Interagency Agreement
does not provide for full reimbursement of the Service's expenses
and does not adequately specify the work to be performed. The
costs which have been reimbursed were not accumulated and
reported accurately and the EPA was not billed timely, in
addition, the service centers could improve their support of
SOI's efforts to provide the tabulations on a more timely basis.
SOI management should «a«k full r«imburs«m«nt of th« Service'a
costs to provide the tax tabulations to EPA..
For FY 1988, SOI submitted $67,422 (which included fixed
support costs of $5,869) as the estimated total Superfund project
costs. EPA officials, however, authorized only $32,000 for the
Interagency Agreement. Of the $32,000, $23,000 was allocated to
SOI and $9,000 to DCC. EPA officials indicated the costs should
be decreasing since the project is a recurring one and the
Service's procedures for producing these tabulations should be
well established. SOI management agreed to this amount because
the Service would be required to provide the information to OTA
regardless of the Interagency Agreement with EPA.
The Service reported and received reimbursement of $31,832
for FY 1988. We estimated the FY 1988 Superfund projects costs
totaled $120,266 ($62,331 for SOI; $56,491 for DCC; $492 for the
service centers? and, $952 for computer usage). Therefore,
actual costs exceeded the authorized amount by at least $88,266.
•
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Evan if FY 198S costs are high because it was an atypical
year due to the programming changes; the Agreeaent amount is
still significantly lower than the Service's costs for providing
the tax tabulations. For FY 1989, SOI's costs alone are $48,704
through June 24, 1989, while the Agreeaent amount is $32,000
indicating there is still underfunding by EPA in a aore typical
processing year. In addition to SOI's direct costs, SOI will
provide a projected .23 staff year to DCC for its computer
prograaaing support in FY 1989 which must be considered in
assessing how much the Service is absorbing on the Superfund
project.
The Economy Act of 1932, as amended, provides EPA with its
basic authority to enter into agreements with other Federal
agencies to obtain goods or services. In filling "orders" placed
by EPA under these agreements, the providing agency is required
by law to recover all actual costs. Actual costs are defined as
all direct costs attributable to the performance of a service or
furnishing of aaterials.
The Service, in particular SOI Division, has absorbed a
significant portion of the costs for the Interagency Agreement.
Absorbing any costs in conjunction with this reimbursable
agreement could be considered augmentation of EPA's
appropriations under the Principles of Federal Appropriations
Law. The Principles state, "When Congress makes an
appropriation, it is also establishing an authorized program
level. To permit an agency to operate beyond this level with
funds derived froa some other source would amount to a usurpation
of the congressional prerogative.* When the Service is not fully
reimbursed its actual costs, it extends EPA's total appropriation
by the amount the Service absorb*. Conversely, it could be
construed that the Service is using its appropriated funds for
programs for which it was not authorized.
SOI management shoald, in future negotiations of Interagency
Agreements, seeJc tram the EPA full reimbursement for the
Service's costs. The provisions of the Economy Act of 1932 and
Appropriations Lav should be used as the basis for full funding.
SOI's proposals should include all costs associated with the
project, in particular, the costs for photocopying by the service
centers and computer usage by DCC.
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Rean
SOI management will negotiate with EPA officials for full
funding of the Super fund program for Fiscal Year 1990. As
recommended, the provisions of the Economy Act of 1932 and
Appropriations Law will be used as the basis for full funding.
The SOI proposal will include all costs associated with the
project, including service center and Detroit Computing Center
costs. However, if EPA officials refuse to agree to full
funding, SOI management will confer with officials at the Office
of Tax Analysis before a decision is made to continue the study.
gOI management should ensure the Interaaency Agreement clearly
plates the work to be performed.
The FY 1988 Interagency Agreement does not adequately
specify the work to be performed. The Agreement states the
Service will provide environmental tax tabulations to assist
EPA's implementation of SARA. It further stated the funding
covered expenditures for FY 1988 and the tabulations should be
provided to EPA and OTA quarterly. The Agreement does not,
however, specify what quarter tax returns are to be processed
during the Agreement period. It is apparently understood by both
parties that the work performed should be for quarterly tax
returns that coincide with the funding period, i.e., 8712; 8803;
8806; and, 8809, for FY 1988.
Potential disputes over reimbursement of the Service's costs
could arise if the terms of the Interagency Agreement are not
specific. For example, during FY 1988, the Service did not
provide any environmental tax tabulations to either EPA or OTA
primarily because of the programming changes being implemented.
Quarterly tabulations for calendar year 1987 and 1988 were not
provided to EPA and OTA until Kay 24, 1989, and August 8, 1989,
respectively. Although neither EPA nor OTA expressed concern
over the timeliness of the Service's issuance of the tabulations,
EPA could have contended the Service had not complied with the
terms of the Agreement and was not, therefore, entitled to
reimbursement.
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IRM 1717, Section 473(1) states, except for a few continuing
projects, which are covered by longstanding agreements, no work,
services, or materials should be furnished on a reimbursable
basis to another Federal agency without a written contract which
states the terns of the reimbursable agreement and the service or
product to be furnished. Historically, EPA has initiated the
Agreement using its forms and specifying the terms which the
Service has accepted.
SOI management should ensure that the Interagency Agreement
vith the EPA clearly states the tax periods for which processing
is to be performed and realistic completion dates for the
quarterly submissions of the tax tabulations to EPA and OTA.
Management Response
SOI management will include a statement of work to be
attached to the Fiscal Year 1990 Interagency Agreement. The
statement of work will specify what will be included in the
statistical tables, the time period covered by the tables, and
when the tables should be delivered to EPA and OTA.
§(?! management should ensure earnings are reported as actual
costs are incurred and are for the entire amount allowed bv the
Agreement .
SOI's earnings reports for FY 1988 were not reflective of
actual costs. SOI estimated the distribution of the total
authorized agreement amount by sub-object class and, then
determined an equal amount to report as earnings each month.
Although time was charged to the Superfund project as early as
October 1987, and the Agreement was signed in December 1987, SOI
reported no earnings until March 1988. In March 1988, SOI
reported one half of the year's total authorized agreement amount
as its monthly earning*. In addition, because of an apparent
oversight, SOI only submitted $22,832 as its total FY 1988
earnings when they were authorized to receive $23,000.
IRM 1717, Section 132(2) requires earnings and expenses to
be recorded on an accrual basis as increments are realized and
costs are expired. IRM 1717, Section 475.1(1) states, "Actual
earnings will be reported monthly by Project, Activity and Sub-
Object detail using the most current data available." SOI
management did not report earnings as incurred because they were
not going to be reimbursed for its entire costs.
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FY 1988 SOI earnings do not correlate with actual costs as
required. Also, earnings are not accurately reported by sub-
object class. For example, $1000 in earnings is shown for travel
and overt i«e; however, there was no travel and only $579 in
overtine vas incurred on the Superfund project. Although these
amounts are relatively snail, this methodology could require
accounting adjustments in the other sub-object classes for which
expenditures were incurred. Finally, this methodology
contributed to SOI's underreporting of earnings and, thus, the
Service did not receive reimbursement for $168 to which it was
entitled.
If the SOI management is unable to obtain full reimbursement
for the Service's actual costs, they should obtain approval for
the Superfund project to be a fixed cost agreement and, thereby,
reduce the administrative burden associated with the project. If
the Interagency Agreement remains a reimbursable agreement based
on actual costs, management should ensure earnings are reported
as costs are incurred and reimbursement is received for the total
amount the Service is entitled to under the Interagency
Agreement.
Management Response
If SOI cannot obtain full funding from EPA, then fixed cost
agreement procedures will be initiated to reduce the
administrative burden associated with this project. However, if
a full funding Interagency Agreement is reached with EPA, then
SOI management will ensure that earnings are reported to the
Budget and Reports Branch monthly on the Form 5489 as they are
incurred. These procedures will be implemented once the
Interagency Agreement has been approved by both agencies.
Financial Accounting management
at least uarter.
should ansur* that EPA is billed
The Interagency Agreement was signed by SOI management on
December 2, 1987. The first Form 5489, Reimbursable/User Funding
Projects Status Report, was submitted by DCC for the period
December 1987. Of the total $31,832 EPA was billed, $9486 was in
March 1988 and the remaining $22,346 in January 1989. IRM 1717,
Section 473(2) states, "Agreements with other Federal agencies
for reimbursable work should provide for quarterly, or more
frequent, payments.*
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reimbursable billings with the Account.
s
d'v*lop
^J:
•hould
,—... is in the process of developing an automated
computer application entitled "Account Receivable Management
System" to manage all receivables including reimbursable
projects. This system can now be used for billing and tracking
the status of all receivables. By the end of this calendar year,
various management reports will be produced from this system
including reports which will enable Accounting to effectively
monitor the billing process. Management will develop written
procedures and implement quarterly operational reviews of
reimbursable projects effective first quarter FY 1990.
Operational reviews will be documented.
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management shou^ provide periodic reports on the service
effectiveness in supporting the Suoerfund project.
Service centers are not following established procedures in
support of SOI's Superfund project. Tax return information is
not being obtained at the nost opportune tine in the processing
cycle. Instead of photocopying returns once the Code and Edit
function has been performed, SOI is required to perform lengthy
follow-up to obtain the returns after they have posted to the
Master File. For example, only 71% of the 1077 returns used for
the 8803 and 8806 tabulations were received in SOI as a result of
the initial photocopying procedures. The remaining return
information was identified using the Missing Returns Listing of
which 25% of the returns were subsequently located by the centers
and 4% were based on estimates by SOI.
IRM 3(11) (23)3. (17) requires the service centers to send
photocopies of all Forms 6627, Environmental Taxes, and the
related Forms 720, Quarterly Excise Tax Returns, to SOI (formerly
to DCC) , after processing by the Code and Edit section. Service
center personnel have not adequately supported SOI in this effort
because it is a relatively small project for the centers.
When photocopies of the tax forms are not made immediately
after the Code and Edit function, SOI's ability to meet its
obligation to provide quarterly tax tabulations timely is
adversely affected. Also, the data reported to EPA and OTA is
not as accurate because the distribution of the taxes between the
specified chemicals are based on estimates if returns cannot be
subsequently located. Finally, service centers are required to
expend more time on the Superfund project because they have to
assist SOI in working the Missing Returns Listing. Based on the
Cost Reference for Service Center Processing (Document 6746) , the
cost of an internal request to provide a photocopy of a return is
more than twice as much as the cost to photocopy a return while
still under Code and Edit's control. Improving the service
center processing becomes increasingly important since the
Service has been required to absorb a significant portion of the
Superfund project costs. If Code and Edit photocopies the
returns while still in their function, the Missing Returns
Listing should be minimal so resources currently used to work the
Listing would be available for the service centers' program
related work.
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SOI management should periodically nrr«H*- . ^
their Assistant Commissioned (Returns k^£Bf'PSts' tfrou»h
center management on the effectiveness of^Z! 2f}' !? servi<=e
the Superfund project. '-•iveness of the support received on
Management
The SOI Division management win
periodic reports to servicTSSte? i
effectiveness of the support received o
in addition, timely data on thriewice c££ SuP«rfund project.
during their first pull operatiorwilf be £? ! ;«ectiveness
currently being done for other ISl proarams cn?d *S is
stress the cost effectiveness of obtli^iJS ^ S01.Bana9ement will
immediately after the Revenue I^8 function.
Susan K. Chew
Audit Manager
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DETAILED OBJECTIVES AND SCOPE OF REVTPW
I.
our overall objective was to determine whether the costs
-nairaed against the Superfund Interagency Agreement for Fiscal
vear I*88 were accurate' reasonable and allowable? and, if the
financial and management control deficiencies noted in the prior
audit report were corrected. To accomplish this objective, we:
Determined whether the Service met its responsibilities
under the Interagency Agreement and properly charged its
costs to the Environmental Protection Agency (EPA).
Reviewed the Interagency Agreement to identify the
Service's responsibilities and whether it timely and
adequately met its obligations.
Determined whether applicable procedures, regulations
and rules governing the Interagency Agreement were
followed.
II.
A.
B.
c.
Evaluated the methodology for calculating the costs
charged to EPA.
Verified the accuracy of the costs charged against the
Interagency Agreement.
Determined whether the Service timely billed and was
reimbursed for its costs.
Determined if changes to the Superfund Amendments and
Reauthorization Act were appropriately considered.
Determined whether management had taken adequate corrective
action on the financial and management control deficiencies
noted in the prior audit report.
D.
E.
F.
A.
B.
Reviewed the prior audit report to identify the
deficiencies noted.
Interviewed management officials to determine the
actions taken on each deficiency.
Evaluated the adequacy of management's action in each
case.
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I Internal RWWIIM
memorandum
jate: OCT 17
to: Commissioner
Thru: Deputy Commissioner (Planning and Res
rom: Assistant Coiranissi
and Support) HR
C:PR
ources Management
/
ject: internal Audit Report - Review of Reimbursable Superfund Costs
Fiscal Year 1988
Identity of Recommendation/Finding:
Financial Accounting management should develop written
procedures to require the status of reimbursable billings be
included in the operational reviews conducted to ensure
billings are adequately monitored. The procedures should also
require that operational reviews be documented.
Assessment of Cause(s):
Management did not effectively and completely implement
the corrective actions recommended in prior audit reports
because staffing levels were seriously deficient. The
Accounting Section has had an average of 10 Accounting
Technician/Operating Accountant vacancies during the past
year.
Corrective Action(s):
We are in the process of developing an automated
computer application entitled "Account Receivable Management
System" to manage all receivables including reimbursable
projects. We can now use this system for billing and
tracking the status of all receivables. By the end of this
calendar year, various management reports will be produced
from this system including reports which will enable
Accounting to effectively monitor the.billing process.
Management will develop written procedures and implement
quarterly operational reviews of reimbursable projects
effective first quarter FY 1990. Operational reviews will
be documented.
•»t •—-
RECEIVED
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Commissioner
Thru: Deputy Commissioner (Planning and Resources) C:PR
Implementation Date:
Proposed: December 31, 1989
Responsible Official(s):
Chief, National Office Accounting Section HR:N:FA
Chief, Accounts Unit
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Internal R*VWIIM S*rvlc«
memorandum
ite:
"RECEIVED
NOV 9 t989
INTERNAL AUOIT DIVISION
to: Commissioner C
ru: Deputy Commissioner (Operations) C:(
Commissioner
{Returns Processing) R
act: Draft Internal Audit Report - Review of Reimbursable Sjperfund
Costs - Fiscal Year
The following are statements identifying the findings and the corrective
actions to be taken by the Statistics of Income (SOI) Division in response to
the Draft Internal Audit Report on the Review of Reimbursable Superfund
Costs - Fiscal Year 1988.
Identity of Recommendation (page 4 of the draft report); SOI management
should, in future negotiations or interagency Agreements, seek from the
Environmental Protection Agency (EPA) full reimbursement for the Service's
costs. The provisions of the Economy Act of 1932 and Appropriations Law
should be used as the basis for full funding.
Assessment of Cause; EPA officials would not agree to reimburse the Service
for the full costs of the Superfund Statistics of Income program In Fiscal
Year 1988. SOI management agreed to the partial support of the program
because the Office of Tax Analysis (OTA), Treasury Department, required the
Superfund data for their revenue estimates to Congress. It should be pointed
out that many itees being tabulated for the SUperfund program ware at the
request of OTA. EPA officials concurred with OTA's suggestions, but would not
have designed such an ambitious program If left to their own needs.
Corrective Action; SOI management will negotiate with EPA officials for full
running or the Superfund program for Fiscal Year 1990. As recommended, the
provisions of the Economy Act of 1932 and Appropriations Law will be used as
the basis for full finding. The SOI proposal will Include all costs
associated with the project. Including service center and Detroit Computing
Center costs. However, if EPA officials refuse to agree to full funding. SOI
management will confer with officials at the Office of Tax Analysis before a
decision is made to continue with the study.
Implementation Date;
Completed Began negotiations for full funding on October 6, 1989.
Responsible official? Director, Statistics of Income Division R:S
•I08ER
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isloner c - 15 -
C«missioner (Operations) C:OP
Assessment of
=»=
-«
- •~%"t *«icorpora
JmniamM**...t * . •*•»•*« LW QBJ.lVJM»a«4 A_ PDA
December 1,
Identity QfP^^-rnrtBtr
_,»»,, ipage 6 of the draft fcgort); If the SOI
management is unable to ootaln full reimbursement for'the Service's actual
costs, they should obtain approval for the Superfund project to be a fixed
cost agreement and, thereby, reduce the administrative burden associated with
the project. If the Interagency Agreement remains a reimbursable agreement
based on actual costs, management should ensure earnings are reported as costs
are incurred and reimbursement is received for the total amount the Service is
entitled to under the Interagency Agreement.
Assessment of Cause.* Prior to the FY 1988 Interagency Agreement, the
Service's actual costs for the Superfund program were being charged to EPA.
However, in FY 1988 when EPA decided to only partially fund the program, SQI
Management decided to submit monthly charges to the Budget and Reports Bnnch
based on the contract amount. Since EPA was not funding the entire profrarr,
SOI management determined that this procedure would reduce the Service1'
administrative burden.
Corrective Action? If SOI cannot obtain full funding from EPA, then fixed
cost agreement procedures will be initiated to reduce the administrative
burden associated with this project. However, if a full funding Interagency
Agreement is reached with EPA, then SOI management will ensure that earnings
ire reported to the Budget and Reports Branch monthly on the Fozm 5489 as they
•re incurred. These procedures will be Implemented once the Interagency
Agreement has been approved by both agencies.
Implementation Date:
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Commissioner C
Deputy Commissioner (Operations)
C:OP
Identity of Recommendation (page 9 of the draft report); SOI management
should periodically provide reports, tnrougn their Assistant Commissioner
(Returns Processing), to service center management on the effectiveness of the
support received on the Superfund project.
Assessment of Cause; The ability to obtain returns timely from the service
centers for 501 processing is an issue that all SOI management is concerned
with for all SOI studies. SOI periodically sends notices to the service
center statisticians via the Statistician's Newsletter and memorandums
informing them of their status on the selection of returns. When missing
returns are identified, special requests are sent to the appropriate service
centers for action. Instructions are provided to the service centers on
pulling the Forms 720 and 6627 for SOI in the IRM for processing excise tax
returns. SOI also produces shipping and controlling instructions in Chapter
800 of the IRM, Statistical Processing Handbook and information on program
size and schedules in the Service Center Work Plans and the Annual Business
Plan.
Corrective Action: The SOI Division management will continue to provide
periodic reports to service center management on the effectiveness of the
support received on the Superfund project. In addition, timely data on the
service center's effectiveness during their first pull operation will be
provided as is currently being done for other SOI programs. SOI management
will stress the cost effectiveness of obtaining the returns immediately after
the Revenue Processing Code and Edit function.
Implementation Date;
Proposed January 1, 1990
Responsible Official; Director, Statistics of Income Division R:S
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