No matter what it does, the IRS always seems to be saddled with outdated information technology systems. At the moment, a third of its applications are legacy, according to the Government Accountability Office (GAO). The agency is running 21 modernization projects, but the GAO found problems with how those are going. To learn more, the Federal Drive with Tom Temin spoke with Dave Hinchman, GAO’s director of Information Technology and Cybersecurity Issues.

Interview transcript:

Tom Temin

I want to start with a detail in the report. And then we’ll back out to some of the larger picture here. But they have suspended their work on the master file system, which is the absolute hard nugget core of the modernization effort they need to do. They have tried to do this time, and time, and time again. Why have they pulled back from that essential task?

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Dave Hinchman
Well, I think that’s a really important point from what we found, Tom. The individual master file, as you pointed out, is IRS’ authoritative data source for individual text count data. It’s where your text files are kept, it’s where mine are kept. And it is now, about 60 years old, the original system was built when the Apollo moon shots were still happening. And while they’ve moved the existing computer code onto modern platforms, it’s still written in [Common Business Oriented Language (COBOL)], which is a computer language that isn’t even taught in schools anywhere. IRS recognizes this, they’ve been trying to modernize the program for a number of years, at least over a decade. And there are several aspects that modernization. And recently, we found that two of those, specifically, which was the customer account data engine, which is a huge part of replacing the IMF, as well as another part of the modernization fund were suspended, because IRS, at the agency level, decided to reprogram the funds that had been designated for those two efforts. We were not given a reason why that was, and the CIOs office was currently working to investigate what other options they had for continuing those efforts.

Tom Temin
Yeah, that [Customer Account Data Engine (CADE)] goes back, I think your report says at least 10 years, I would say it’s about 25 years, actually, from my experience. And well, let’s get to the bigger picture here. Your report says there are 21 modernization plans going on. Most of them seem to be compliant to what is required of a modernization effort, but not all of them are?

Dave Hinchman
No, when we look at modernization plans for legacy IT, there are three things that we look for. One is, does the plan have the milestones necessary to complete the effort? Does it does the plan have a description of what’s necessary to modernize the system? And thirdly, are there details about how the agency plans to dispose of the legacy IT that’s been replaced. And when we looked at the 21 plans, there were nine of those 21 apply to legacy. The other ones are actually, just new development, they’re going to help modernize the IRS as IT infrastructure. But of those nine legacy modernization plans, three of them were complete, that all three of those elements look we were looking for, but the other six, none of them discussed what they were going to do with their legacy IT. And that’s, not necessarily a bad thing. IRS said that, they we’re going to address that, as they got later into the lifecycle. But I think, you, I would argue that, until those plans are complete, there’s reason to be concerned about the lack of accountability for completing that key element. It’s too easy for personnel to turn over, or for things to get shoved aside and forgotten. And, I think that, even if it was just a commitment that we will decide how to dispose of Legacy IT by this specific date, would be an important commitment to make.

Tom Temin
And what do you mean, by dispose of legacy? If it’s old computer code, there’s nothing really to dispose of.

Dave Hinchman
Well, this also applies to hardware. And, I think one of the things we talked about is the amount of legacy hardware that IRS has in their IT infrastructure. It’s not a huge amount. It’s not an abnormal amount. But I think that those actual physical things that are taking up space in a datacenter, or computer closet are important aspects of ensuring that you’ve thought through your modernization effort, and what it’s going to take to bring all of your infrastructure into modern times with modern equipment and modern software.

Tom Temin
Right. You can have a contractor, say, we’ll recycle it or something. That could be part of the plan.

Dave Hinchman
Absolutely. But there just needs to be, you need to have a sense for what you’re going to do with it.

Tom Temin
And did you get the sense though, that there is a vision for what a modernized IRS will look like on the part of the CIO and the staff and really, its CIOs in like part of the picture here. The agency head and different division owners really need to have the same vision too, don’t they?

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Dave Hinchman
Oh, sure. This thorough modernization efforts stretches across the organization, everyone’s involved, in the case of IRS, the Commissioner, down to the CIO, as well as the other heads of other units within the agency. And I think when you look at the scope of the 21 modernization initiatives that we looked at, and then our report details, all 21 of those, I think you get a real sense that they’re looking across the organization, holistically. So not just it’s sort of the very IT driven stuff, but also looking at how they can expand in the cloud, how they can improve assistance to customers, as well as other aspects of IRS’ operations.

Tom Temin
We’re speaking with Dave Hinchman, director of Information Technology and Cybersecurity Issues at the GAO. And on that cloud question, they have made progress toward the cloud. And you said, they have fulfilled most of the [Office of Management and Budget (OMB)] requirements, the White House requirements for doing cloud computing. But that gets back to some of these older technology systems that use COBOL. And actually, I think the master file is assembler, not even COBOL. And those are pretty hard to move to the cloud, because of the way they work. And you need a lot of work to get them to operate in the cloud, that may not be worth eating them up there, because it’s still the same old code.

Dave Hinchman
So I think that something like the IMF, I’m not sure that would ever go to the cloud. I think that, as you pointed out, that is a complex application. And depending on how they’re looking at bringing in case to replace IMF, and what options there were, that could also be for security purposes, they could decide not to move it into the cloud. And I think as long as there’s, a well thought out business decision made and documented about that, that’s a reasonable approach. Meanwhile, there are lots of other cloud efforts that they’re looking at underway. You know, one thing that they looked at, you mentioned, they implemented a lot of OMB cloud requirements, which is great, that’s we want to see. But they’ve also done a lot of business value assessment of their cloud efforts. And I think that, that is starting to show some of the benefits the IRS is beginning to realize. For instance, they looked at 53 applications that were going to be moved into the cloud in fiscal year 22. And they found that of those 50, working to provide moderate to high value overall, from the benefits you’re going to realize from the cloud. And that came under financial benefits, business benefits, as well as minimizing enterprise risk. So they found things like, immediate cost avoidance, reduction in future costs, so downstream from managing applications. Contributing to advancing IRS is sort of long-term vision, about what they’re going to look like in the cloud. And as I pointed out, reducing the risk that was presented by access to those applications.

Tom Temin
And I want to comment or ask you to comment on table five, which I think says a lot. And if anyone looks wants to look at the long form report, it’s on page 25. But if you look at the actual start date of different projects, and planned completion dates, some of them look normal in the course of how federal government operates. The cloud execution program, actual start date, December 2018, plan completion date, December 2022, we pass that date. But you said they’ve done a lot of work their. Customer Account Data Engine, CADE to transition started in 2010, may be finished in 2024. Some of them even go back before that. My question, I guess, is, will the CADE ever be done? Will the master file system ever be done? Or should they say, you know what, we can run assembler for another 25 or 30 or 40 years, If the air force can run a B52 for 100 years.

Dave Hinchman
Well, I think the second approaching you detail is probably not realistic. Increasingly, it’s harder to find people who can manage the code, that powers these older systems. Those languages aren’t taught in school. And so the number of people who have skills in those languages are increasingly smaller number every year, and as a consequence, are more expensive to hire. The pearls of caterers, certainly long standing, we don’t completely understand all of them yet, we haven’t had a chance to do a deep dive into something like that. But I think that, the most recent date was that, IRS was seen the key to was going to replace IMF by 2030. However, we mentioned the pause on the projects. That’s one of them. And so now the impact that’s going to have on the IMF replacement date is still TBD. But we’ve just started new work, as we do as part of the IRS as annual appropriation. We’re asked to go in and look at some of their major systems applications and progress being made, in terms of their business systems modernization, and so I’m sure we’ll be examining that issue as part of that work.

Tom Temin
Right. And you made nine recommendations, and pretty much the IRS reacted how to those?

Dave Hinchman
They agreed with all of them. Our recommendations, for this report, were primarily focused about completing those elements of the modernization plans that we thought were missing. And all we really asked them to do, is commit to a timeline for when they were going to complete those plans. Because I think it’s important to give them a chance to, especially for resolving the disposition of those legacy IT assets, to give them a chance to really look at the issue and make sure that they’re making good decisions that make good business sense. And so all we asked them to do was to agree to a timeline for when they were going to do that. And they agreed with those recommendations.

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