The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its audit of the Internal Revenue Service's (IRS's) use of leased office space.

The new report found that while the IRS generally has improved its controls over leased office space, as compared to TIGTA's findings in a 2004 audit report, the IRS needs to take into account its planned hiring of over 3,400 employees by September 30, 2009. Approximately 70 percent of those new hires are projected to be housed in field offices.

"Although the IRS has unused space currently available, additional efforts are needed to ensure that the space-related challenges created by its new hires are effectively addressed," commented J. Russell George, the Treasury Inspector General for Tax Administration. "If the IRS does not effectively address these challenges, delays could potentially occur in the hiring of new employees due to the lack of available space," said Inspector General George.

TIGTA recommended that the IRS develop an overall estimate of planned hiring by location, compare this estimate to currently available space, and develop a comprehensive national policy regarding workstation sharing for "flexi-place" employees. In addition, the IRS should ensure that future assessments of its building-level space needs consider the impact of workstation sharing and the IRS should compare those building-level assessments to agency-wide projected staffing levels. TIGTA estimated that by fully considering existing workstation sharing in space needs projections the IRS could save $6 million annually.

The IRS agreed with all of TIGTA's recommendations. The IRS is working to identify sites where space deficiencies exist, formulating housing solutions and planning to develop a flexi-place policy that will address shared workstations, and revising its asset management plans to reflect the impact of its hiring initiative.