A new audit report publicly issued Thursday reveals that despite a massive IT budget, the IRS has no idea how to manage software licenses and still doesn't even have basic email functionality.

Based on the report from the Treasury Inspector General for Tax Administration, the IRS does not even follow Federal requirements or best industry practices in its IT department. The report was completed at the end of September 2014, but was only released today.

In total, the IT budget amounts to $1.8 billion dollars a year, but the agency just can't seem to use funds effectively. Previous reports indicated that the IRS has problems implementing basic email functionality on a lot of systems, and officials were quick to cite this failure as an excuse for why Lois Lerner's emails were irretrievable.

According to IRS Commissioner John Koskinen, the real reason for all the IT problems is that $1.8 billion simply isn't enough money. In the meantime, the IRS is paying hand over first for declining to upgrade beyond Microsoft's outdated operating system Windows XP. Since Microsoft is not officially providing support anymore, the IRS has to pay very high rates to cover 50,000 of its computers. Despite having plenty of advanced notice, the IRS has still not upgraded its systems to a more recent version.

"The IRS does not effectively manage server software licenses and is not adhering to Federal requirements and industry best practices.  The IRS does not have enterprise-wide or local policies, procedures, and requirements for managing server software licenses and does not have a centralized, enterprise-wide organizational structure for managing server software licenses," the report noted.

"We are provided significant amounts of money but significantly less than we need," Koskinen told Congress, according to the Washington Examiner.

However, the findings of the report shed considerable doubt on Koskinen's claim, with the Treasury Inspector General finding that the agency wasted between $81.4 and $114.1 million dollars, meaning that approximately 6 percent of the IT budget would be available to cover areas Koskinen has identified as needing additional funds.

Aside from server usage and software licensing is the low productivity of IRS programmers, a revelation which came out in an unrelated court filing last week, admitting that their programmers write on average only 473 lines of code per month.

While the IRS did agree that software licensing was a problem, the agency refused to accept that the waste actually existed, saying that it has taken steps to fix the problem by awarding another software contract in late 2012.

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