WASHINGTON--The Internal Revenue Service (IRS) is paying for the long-term storage

of office furniture and equipment that it may not need, according to a new report from the

Treasury Inspector General for Tax Administration (TIGTA).

As of September 2010, the IRS had 22,486 items that had been in storage for at least 18

months without any activity, TIGTA found. The amount of time these items remained

unused, combined with a lack of information on the future need, age or condition of the

stored items, raises significant questions about the likelihood that these items will be

placed back into use. The rent cost associated with the 34,194 square feet of warehouse

space is approximately $862,000 annually.

The five-year, $90 million contract with URS Federal Technical Services, Incorporated

(URS) covers furniture moving and storage, inventory management, and property and

locksmith repairs. URS moves desks, chairs, computer monitors, and other furniture and

equipment from IRS facilities into warehouse spaces at the IRS National Headquarters in

Washington, DC; the New Carrollton, Maryland, Federal Building; and 12 other IRS

facilities around the Nation.

TIGTA assessed whether the IRS managed its support services contract in a costeffective

manner and minimized contractor access to sensitive records.

"While storing new or used furniture and equipment for future use may seem like a good

use of taxpayer funds, the IRS needs to periodically evaluate and determine whether the

storage of such items makes continued sense," said J. Russell George, the Treasury

Inspector General for Tax Administration.

TIGTA also found that the IRS could not confirm that contract employees returned their

identification badges and building access cards when they changed jobs.

TIGTA made a series of recommendations, including: a nationwide review of all items

currently in warehouse storage to identify any items for possible disposal; the

maintenance of documentation for all future items being considered for storage or

disposal; and the development of criteria to guide further decisions on the costs and

benefits of storing items. TIGTA also recommended that the IRS ensure that contract

employees return their badges and building access cards when leaving the contractor's

employ.

The IRS agreed with TIGTA's recommendations and said it would take action to

implement them.