The IRS Oversight Board (Board) has improved its internal financial management, but more needs to be done, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The Board is an independent body responsible for providing the IRS with long-term guidance and direction. TIGTA assessed the actions taken by the Board in response to an August 23, 2005 TIGTA report that found significant financial management control deficiencies.

In its new report, TIGTA found that while the Board has implemented financial procedures and controls, it is not adequately following them. The Board did not timely identify approximately $2.2 million in potential excess funds for Fiscal Years 2005 through 2009. In addition, the Board is still not certifying the accuracy of costs associated with Board activities submitted to the IRS for reimbursement to ensure that all expenses are reasonable and necessary.

"It is critical that the IRS Oversight Board maintain proper financial controls over its own budgetary process and ensure the proper stewardship of taxpayer funds," said J. Russell George, the Treasury Inspector General for Tax Administration. "As the Board is responsible for overseeing the IRS in its administration, management and application of the Internal Revenue laws, it must also ensure that its own financial house is in order."

TIGTA recommended that the Board follow its stated policies for tracking spending and verifying the accuracy of expense information prior to reimbursement. TIGTA also recommended that the board:

• develop procedures for arranging and processing Board travel-related transactions;
• train all Board members and staff on travel-related procedures, and;
• require that the incorrectly reimbursed expenses be repaid to the Federal Government.

In its response to the report, the Board agreed with TIGTA's recommendations and is taking or is planning to take corrective action.