Tax Administration: Workforce Planning Needs Further Development 
for IRS's Taxpayer Education and Communication Unit (30-MAY-03,  
GAO-03-711).							 
                                                                 
Strategic workforce planning helps ensure that agencies have the 
right people with the right skills in the right positions to	 
carry out the agency mission both in the present and future. The 
Internal Revenue Service's (IRS) Taxpayer Education and 	 
Communication (TEC) unit within its Small Business and Self-	 
Employed Division assists some 45 million small business and	 
self-employed taxpayers. Given the number of taxpayers it is to  
assist and changes in its priorities and strategies, GAO was	 
asked to determine whether TEC has a workforce plan that conforms
to critical elements for what should be in a plan and how it	 
should be developed and implemented.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-711 					        
    ACCNO:   A07044						        
  TITLE:     Tax Administration: Workforce Planning Needs Further     
Development for IRS's Taxpayer Education and Communication Unit  
     DATE:   05/30/2003 
  SUBJECT:   Federal employees					 
	     Internal controls					 
	     Personnel management				 
	     Strategic planning 				 
	     Labor force					 
	     Human resources utilization			 
	     Agency missions					 

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GAO-03-711

                                       A

Report to Congressional Requesters

May 2003 TAX ADMINISTRATION Workforce Planning Needs Further Development
for IRS*s Taxpayer Education and Communication Unit

GAO- 03- 711

a

GAO United States General Accounting Office

Although it has existed for more than 2 and a half years, TEC does not
have a strategic workforce plan that includes certain critical elements.
(See figure below.) For example, it has not identified gaps between the
number, skills,

and locations of its current workforce and the workforce it will need in
the future, and the strategies to fill gaps. Such a workforce plan for TEC
could be developed by IRS, the Small Business and Self- Employed Division,
and/ or TEC. Small Business and Self- Employed Division officials said
that TEC does not have a strategic workforce plan because they focused on
creating the division and units such as TEC to begin addressing taxpayer
needs, and

because they first wanted to gain some experience with TEC as a new unit.
IRS and the Small Business and Self- Employed Division are creating a
process for developing a workforce plan for TEC that in broad terms would
incorporate the critical elements common to workforce planning. However,
it is not yet clear whether the workforce plan for TEC will be developed
and implemented consistent with these critical elements. For example, IRS
and the Small Business and Self- Employed Division have not analyzed the
skills that the TEC workforce will need to meet its program goals or
outlined the process and data to be used to do these analyses. A
Simplified Model of Critical Elements to Include in the Workforce Planning
Process

Involvement of management and employees

Workforce gap analysis

Workforce strategies to fill the gaps Evaluation of

and revisions to strategies

Source: GAO.

Set strategic direction

Strategic workforce planning helps ensure that agencies have the right
people with the right skills in the right positions to carry out the
agency mission both in the present and future.

The Internal Revenue Service*s (IRS) Taxpayer Education and Communication
(TEC) unit within

its Small Business and SelfEmployed Division assists some 45 million small
business and selfemployed taxpayers. Given the number of taxpayers it is
to assist and changes in its priorities and

strategies, GAO was asked to determine whether TEC has a workforce plan
that conforms to critical elements for what should be in a plan and how it
should be developed and implemented.

GAO recommends that the IRS Commissioner ensure that the TEC workforce
plan is developed in conformance with the critical elements of what a plan
is to include and how a plan is to be developed and implemented.

The Commissioner provided comments that neither explicitly agreed nor
disagreed with GAO*s recommendation, but said IRS had

an integrated strategy that addressed issues raised in the report. GAO
believes the strategy is useful but did not provide sufficient detail to
ensure the TEC workforce plan would conform to the critical

elements.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 711. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Michael Brostek at (202) 512- 9110 or brostekm@ gao.
gov. Highlights of GAO- 03- 711, a report to

Congressional Requesters

May 2003

TAX ADMINISTRATION

Workforce Planning Needs Further Development for IRS*s Taxpayer Education
and Communication Unit

Page 1 GAO- 03- 711 Workforce Planning May 30, 2003 The Honorable Olympia
Snowe

Chair Committee on Small Business and Entrepreneurship United States
Senate

The Honorable Christopher H. Bond United States Senate

In all federal agencies, employees are their most important asset in
accomplishing their missions and achieving their goals. The Government
Performance and Results Act of 1993 (GPRA) 1 calls for agencies and their
operating divisions to address human capital in the context of performance
management and requires annual performance plans to

describe how agencies will use resources to accomplish their strategic
direction and program goals. As part of human capital management,
strategic workforce planning helps ensure that organizations have the
right number of staff with the right skills and competencies in the right
locations to fulfill their goals both now and in the future given the
strategies they have adopted to carry out their missions.

Certain critical elements are common in workforce plans and planning
processes across leading private and public organizations: (1) involving
top management and employees in developing and implementing a

workforce plan, (2) analyzing gaps between the workforce that exists
currently and that will be needed in the future, (3) devising strategies
(e. g., hiring or training) to fill workforce gaps, and (4) evaluating the
strategies to ensure that they yield the workforce needed and to make
revisions as

necessary. In an August 2002 report, 2 the Treasury Inspector General for
Tax Administration (TIGTA) voiced specific concerns that the Internal
Revenue Service*s (IRS) workforce planning documents do not focus on

1 Pub. L. No. 103- 62. 2 Treasury Inspector General for Tax
Administration, Expansion of the Workforce Planning Process Would Increase
Opportunities to Identify and Address Staffing Risks,

Reference Number: 2002- 10- 154 (Washington, D. C.: August 2002).

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 711 Workforce Planning long- term planning. IRS has
assumed overall responsibility for developing an IRS- wide workforce plan,
which its divisions and units are to support and can supplement with more
detailed plans.

Within IRS, the Taxpayer Education and Communication (TEC) unit in the
Small Business and Self- Employed Division (SB/ SE) 3 were both created in
October 2000 during IRS*s reorganization. TEC is to serve about 45 million
small businesses and self- employed taxpayers primarily through efforts to

better educate them about their tax obligations. Although the other two
units in SB/ SE combined many organizations and functions that had existed
prior to IRS*s reorganization, TEC was a new unit with new or expanded
responsibilities. TEC was to have over 1,200 staff by fiscal year 2002 in
15 major field locations and an annual budget of over $60 million. Since
its inception, TEC has (1) not reached its staffing level (it had 718
staff as of March 2003), (2) reduced the number of major field locations
to 7, and (3) added priorities and strategies for providing education and

outreach to SB/ SE taxpayers. Because TEC serves many taxpayers and has
had the above changes, you asked us to determine whether TEC has a
workforce plan that conforms to the critical elements for what should be
in a plan and how the plan should be developed and implemented. To do so,
we interviewed IRS officials and

reviewed IRS workforce planning documents, reviewed guidance by central
management agencies such as the Office of Personnel Management (OPM) and
the Office of Management and Budget (OMB) on the critical elements of
workforce planning, and reviewed our reports on human capital management.
We did not evaluate the adequacy of TEC*s program goals (or operational
priorities). 4 Although TEC has existed for more than 2 and a half years,
IRS has not

ensured that TEC has a strategic workforce plan that includes the critical
elements of a plan, such as identifying any gaps between the number,
skills, and locations of the current workforce and the workforce needed in
the future, and strategies to fill these gaps. Without a strategic
workforce

3 SB/ SE*s three operating units are TEC, Customer Account Services, and
Compliance. 4 IRS*s system includes an alignment of unit, division, and
IRS strategic goals. TEC has operational priorities that are commonly
thought of as program goals. For clarity, we refer to TEC*s operational
priorities as program goals that are to link to and support SB/ SE*s
program goals. Results in Brief

Page 3 GAO- 03- 711 Workforce Planning plan, TEC has less assurance that
it has the necessary workforce to meet its current program goals and to
manage changes in its programs and goals. SB/ SE officials said that TEC
does not have a strategic workforce

plan because they focused on creating TEC to address SB/ SE taxpayers*
needs, and because they first wanted to have some experience with TEC as a
new unit. IRS and SB/ SE are creating a process for developing a workforce
plan for TEC that in broad terms would incorporate the critical elements
common to workforce planning by leading private and public organizations.
However, it is not yet clear whether the workforce plan for TEC will be
developed and implemented consistent with these critical elements. For
example, IRS and SB/ SE have not analyzed the skills that the TEC
workforce will need to meet its program goals or outlined the process and
data to be used for these analyses. In developing and implementing a
strategic workforce plan for TEC, IRS and SB/ SE will have to meet
challenges, such as gathering reliable data on the skills that the current
workforce has and the future workforce that TEC will need.

Given the uncertainty about how the strategic workforce plan for TEC will
be developed, we recommend that the IRS Commissioner ensure that the TEC
workforce plan is developed in conformance with the critical elements for
what a plan is to include and how it is to be developed and implemented.

In a letter dated May 28, 2003, the Commissioner of the IRS provided
comments that neither explicitly agreed nor disagreed with GAO*s
recommendation. However, the Commissioner said he believed IRS had a set
of integrated strategies that address the issues raised in our report.
Although the steps the Commissioner listed as the integrated strategies
are useful, we did not see sufficient detail in the material IRS provided
on these steps during our review to be assured that the TEC workforce plan
would be sufficiently developed and implemented in accordance with the

critical elements. (See p. 13 for a discussion of agency comments, which
are reprinted in app. I.)

SB/ SE was formed to address various issues affecting small business and
self- employed taxpayers, such as filing tax returns and paying taxes. SB/
SE*s strategic goals include increasing compliance and also reducing
burden among SB/ SE taxpayers. As part of SB/ SE, TEC is to use various
strategies, including providing education, outreach, assistance, and other
services, to support SB/ SE taxpayers in understanding and complying with
Background

Page 4 GAO- 03- 711 Workforce Planning tax laws. IRS created TEC in
response to concerns that IRS should better balance such services with its
enforcement efforts.

In serving taxpayers, TEC is to partner with government agencies, small
business groups, tax practitioner groups, and other stakeholders that
could advance its education and outreach efforts. To meet an overall goal
of increasing voluntary compliance, TEC*s four program goals or priorities
are to combat abusive tax schemes, reduce taxpayer burden, promote
electronic filing, and negotiate agreements with SB/ SE taxpayers on
specific ways to voluntarily comply with tax laws.

Recent events underscore the importance of human capital management and
strategic workforce planning. For example, we designated strategic human
capital management as a governmentwide, high- risk area in January 2001,
and it was also placed at the top of the President*s Management Agenda in
August 2001. In addition, OMB and OPM have made efforts to improve human
capital management and strategic workforce planning. 5 The goal of
strategic workforce planning is to ensure that the right people with the
right skills are in the right place at the right time. Agency

approaches to workforce planning can vary with their particular needs and
missions. Nevertheless, looking across existing successful public and
private organizations, certain critical elements recur as part of a
workforce plan and workforce planning process. Although fluid, this
process starts with setting a strategic direction that includes program
goals and strategies to achieve those goals and flows through the critical
elements to evaluating the workforce plan. Figure 1 uses a simple model to

show these critical elements and their relationships to the agency*s
overall strategic direction and goals.

5 Based on an OMB standard on strategic human capital management, OPM
issued its

Human Capital Assessment and Accountability Framework in October 2002,
which lists six *Human Capital Standards for Success,* including one on
workforce planning. Critical Elements in

Workforce Planning

Page 5 GAO- 03- 711 Workforce Planning Figure 1: A Simplified Model of
Critical Elements to Include in the Workforce Planning Process

Note: Workforce planning is a continual process that involves interaction
among the critical elements and may reshape how the workforce accomplishes
its work and achieves the agency*s mission in the future.

Before developing a workforce plan, an agency first needs to set a
strategic direction and program goals. Setting a strategic direction and
program goals is part of the general performance management principles
that Congress expects agencies to follow under GPRA. A workforce plan
should be developed and implemented to help fulfill the strategic
direction Involvement

of management and employees

Workforce gap analysis

Workforce strategies to fill the gaps Evaluation of

and revisions to strategies

Source: GAO.

Set strategic direction

Page 6 GAO- 03- 711 Workforce Planning and program goals. 6 The critical
elements of what this plan should include and how it should be developed
follow.

Involvement of management and employees: Involving various staff (from the
top to the bottom) cuts across the other critical elements. Involving
staff in all phases of workforce planning can help improve the quality of
the plan because staff are directly involved with the daily operations.
Further, vetting proposed workforce strategies to management and those
most affected by

those decisions can build support for the plan and facilitate obtaining
the resources needed to implement the plan and meet program goals.
Establishing a communication strategy that involves various staff can
create shared expectations and a clear

reporting process about the workforce plan.

Workforce gap analysis: Analyzing whether gaps exist between the current
and future workforce needed to meet program goals is critical to ensure
proper staffing. The workforce plan should assess these gaps, to the
extent practical, in a fact- based manner. The absence of fact- based
analyses can undermine an agency*s efforts

to identify and respond to current and emerging challenges. 7 Thus, the
characteristics of the future workforce should be based on the specific
skills and numbers of staff that will be needed to handle the expected
workload. The analysis of the current workforce should identify how many
staff members have those skills and how many are likely to remain with the
agency over time given expected losses due to retirement and other
attrition. The workforce gap analyses can help justify budget and staffing
requests by connecting the program goals and strategies with the budget
and staff resources needed to accomplish them.

Workforce strategies to fill the gaps: Developing strategies to address
any identified workforce gaps creates the road map to move from the
current to the future workforce needed to achieve

6 See U. S. General Accounting Office, A Model of Strategic Human Capital
Management,

GAO- 02- 373SP (Washington, D. C.: March 2002), and Highlights of a GAO
Forum: Mergers and Transformation: Lessons Learned for a Department of
Homeland Security and Other Federal Agencies, GAO- 03- 293SP (Washington,
D. C.: November 2002).

7 See U. S. General Accounting Office, High- Risk Series: Strategic Human
Capital Management, GAO- 03- 120 (Washington, D. C.: January 2003).

Page 7 GAO- 03- 711 Workforce Planning the program goals. Strategies can
involve how the workforce is acquired, developed and trained, deployed,
compensated,

motivated, and retained. Agencies need to know their flexibilities and
authorities when developing the strategies, and to communicate the
strategies to all affected parties. 8 Evaluation of and revisions to
strategies: Evaluating the results of

the workforce strategies and making any needed revisions helps to ensure
that the strategies work as intended. A key step is developing performance
measures as indicators of success in attaining human capital goals and
program goals, both short- and long- term. Periodic measurement and
evaluation provides data for identifying shortfalls and opportunities to
revise workforce plans as necessary. 9 For example, an evaluation may
indicate whether the workforce plan adequately considered barriers to
achieving the goals, such as insufficient resources to hire and train the
full complement of staff identified as necessary by the workforce gap
analysis.

Across the critical elements of a workforce plan, data collection and
analysis provide fundamental building blocks. Having reliable data is
particularly important to doing the workforce gap analysis. Early
development of the data provides a baseline by which agencies can identify
current workforce problems. Regular updating of the data enables agencies
to plan for improvements, manage changes in the programs and workforce,
and track the effects of changes on achieving program goals.

IRS issued an Internal Revenue Manual (IRM) section for internal review
and comment in March 2003, and IRS expects to finalize it in June 2003.
The section outlines a strategic workforce planning system and model, and
discusses the roles and responsibilities of IRS and its divisions in this
system.

8 See U. S. General Accounting Office, Results- Oriented Cultures: Using
Balanced Expectations to Manage Senior Executive Performance, GAO- 02- 966
(Washington, D. C: Sept. 27, 2002). 9 Strategic workforce plans are
similar to an agency*s strategic plans under GPRA in that both types of
plans include strategies for achieving annual and long- term goals and are
linked to the strategic goals. See U. S. General Accounting Office,
Managing for Results; Strengthening Regulatory Agencies Performance
Management Practices, GAO/ GGD- 00- 10 (Washington, D. C.: Oct. 28, 1999).
Status of Workforce Planning at IRS

Page 8 GAO- 03- 711 Workforce Planning For example, IRS is to be
responsible for developing the strategic workforce plan across IRS and for
analyzing current and future workforce

needs. The divisions are to be responsible for providing requested data to
IRS*s workforce planning office and for translating the IRS- wide plan
into their operations. Thus, a strategic workforce plan for a unit within
a division could be developed by IRS, the division, or the unit. If
developed by the division or unit, the workforce plan is to be consistent
with IRSwide strategic and workforce plans.

Our objective was to determine whether TEC has a workforce plan that
conforms to the critical elements for what should be in a plan and how it
should be developed and implemented. To meet this objective, we

reviewed human capital literature-- including OPM*s Human Capital
Assessment and Accountability Framework-- as well as workforce planning
models at OPM, OMB, and IRS, among others;

reviewed TIGTA and GAO reports on human capital and workforce planning;

reviewed IRS and SB/ SE documents on their strategic program plans, the
plan that guided TEC*s creation and initial staffing, and the annual TEC
staffing plan as well as IRS*s draft IRM section on strategic

planning and workforce analyses (section 6.251) as of March 2003; and

interviewed SB/ SE and TEC officials on their goals, strategies, and
staffing plans as well as IRS and SB/ SE Workforce Council officials to
determine their purposes, activities, time lines, and challenges.

We conducted our work at IRS and SB/ SE headquarters from February 2003
through April 2003 in accordance with generally accepted government
auditing standards. We did not attempt to analyze the adequacy of any
analyses done to develop a workforce plan for TEC or the program goals and
strategies. The Commissioner of IRS provided comments on a draft of this
report, which are discussed in the *Agency Comments and Our Evaluation*
section and are reprinted in appendix I. Objective, Scope, and

Methodology

Page 9 GAO- 03- 711 Workforce Planning Since its inception in October
2000, TEC has operated with short- term staffing plans that do not meet
the critical elements of what a strategic

workforce plan should include and how it should be developed. IRS and SB/
SE are taking steps to develop a strategic workforce plan that will
include TEC. However, questions remain about how the critical elements
will be developed and implemented for TEC.

TEC does not have a strategic workforce plan that includes the critical
elements, such as analyses of the workforce gaps and strategies. Without
such a workforce plan, TEC has less assurance that it has the necessary
workforce to meet its current program goals and to manage changes in its
programs and goals. IRS and SB/ SE officials said that TEC does not have a

strategic workforce plan because of the effort in creating the division
and its units such as TEC to meet SB/ SE taxpayer needs. These officials
said this effort has been a significant undertaking, which delayed the
workforce planning. SB/ SE officials also said that they needed to have
some experience with TEC as a new unit and some data on its new TEC
workforce before developing a strategic workforce plan for TEC.

Since its inception, TEC has operated under two types of staffing plans
that did not use the critical elements of a workforce plan. One plan was
developed prior to TEC*s creation in October 2000 to guide the hiring and
allocation of 1,209 full- time positions for TEC. 10 The other plan
annually

allocates the number of TEC staff to its various locations, functions (e.
g., partnership outreach or marketing service) and four priorities (e. g.,
combat abusive tax schemes and promote electronic filing). Although both
plans reflect analyses of the number of TEC staff by location, these plans
did not address what a TEC workforce plan should include under the
critical elements. For example, the plans did not identify any gaps in the
workforce needed, any strategies to fill the gaps, or any measures for
evaluation purposes.

10 For various reasons such as budget and recruitment difficulties, and
program goal changes, TEC has not filled all these authorized positions
and had 718 staff on board as of March 2003. TEC also has received 13
additional positions by assuming responsibility in

November 2001 for promoting electronic filing. TEC Has Not Had a

Strategic Workforce Plan and Questions Remain on How This Plan Will Be
Developed and Implemented

TEC Does Not Have a Workforce Plan That Includes the Critical Elements

Page 10 GAO- 03- 711 Workforce Planning Recognizing the need for workforce
planning, both IRS and SB/ SE are developing strategic workforce plans and
a planning process for TEC and

other IRS entities that broadly reflect the critical elements. However,
questions remain because of the lack of details on how any workforce plan
for TEC will address the critical elements.

IRS and SB/ SE each convened workforce planning councils, consisting of
executives and human capital managers, to oversee the development of a
strategic workforce plan that would include TEC. IRS started its council
in the fall 2001 at the direction of the IRS commissioner. SB/ SE started
its

council in February 2003 to create a more detailed workforce plan for TEC
and its other units than would be provided in the IRS- wide plan.

Our review of IRS and SB/ SE documents showed that they both intend to use
the critical elements of strategic workforce planning. These documents
include models and discussion that reference the critical elements. For
example, these models refer to elements such as analyzing the gap in the
workforce and developing strategies to reduce the workforce gap.

Although IRS and SB/ SE are taking steps to develop a strategic workforce
plan for TEC, these steps have not yet produced enough details to specify
how the critical elements will be developed and implemented for TEC. IRS
and SB/ SE officials said that they recognize the need to further define
how the strategic workforce plan will be developed and implemented over
time.

For example, the degree to which top management and employees will be
involved in developing and implementing the workforce plan for TEC is not
yet clear. The draft IRM section refers to their involvement but does not
provide details on the extent and nature of their involvement.

As for identifying any workforce gaps at TEC, it is not clear what
analyses will be done. As of April 2003, neither IRS nor SB/ SE has
analyzed the type of TEC workforce needed in the future to meet program
goals or the skills

of the current TEC workforce. Both types of analyses are needed to
determine the gap between the current TEC workforce and the workforce
needed in the future. Nor is it clear how and when these analyses will be
done. SB/ SE officials said that given resource limitations, they have not
done the necessary workforce analyses for TEC or developed an
implementation schedule for when the analyses would be done. IRS and SB/
SE Are

Developing a Workforce Plan for TEC, but Questions Remain

Page 11 GAO- 03- 711 Workforce Planning As of April 2003, IRS or SB/ SE
analyses have dealt with other workforce issues. While useful, the
analyses do not address the TEC workforce gap in terms of the skills
needed now or in the future to meet program goals,

particularly newer ones such as promoting electronic filing or negotiating
voluntary compliance agreements. For example, IRS has analyzed 12 mission-
critical positions in terms of potential

losses (e. g., retirement) from the current number of positions. These
analyses have not focused on TEC because the analyses, as well as the
eventual IRS- wide workforce plan, are intended to be done at a high level
with minimal references to TEC. 11 SB/ SE asked officials in TEC and its
other units in February 2003 to

use a checklist to self- assess their current workforce and planning
capabilities against OPM criteria. SB/ SE has not indicated how it will
verify and use the subjective check marks made by the officials to
determine workforce gaps in TEC, particularly in skills needed.

No analyses have been provided to justify plans for fiscal year 2004 to
hire 250 additional staff in TEC to combat abusive tax schemes and to not
hire any additional staff to address three other TEC goals. IRS and SB/ SE
workforce officials had told us that the 250 staff estimate came from the
budget and finance staff in SB/ SE. In a subsequent meeting during May
2003, TEC and SB/ SE officials said that IRS has decided against any staff
expansion in TEC due to other budget considerations.

Finishing the analyses of TEC workforce gaps is important for the rest of
the workforce plan. The other two critical elements involving strategies
and evaluation cannot be finished until IRS and SB/ SE know the specific
needs of the current and future TEC workforces.

As IRS and SB/ SE officials develop and implement a workforce plan for
TEC, major challenges are likely to arise. For example, these officials
cited the challenge of balancing daily operational demands with the
capacity to forecast workforce needs in terms of staff numbers, skills,
and locations.

Another challenge is gathering reliable data on the attrition, retirement,
11 Most of the analyses combine the tax specialist position with the tax
resolution representative and tax compliance officer positions.
Distinctions are important because the skills for these positions vary.
Furthermore, the analyses do not break out the tax specialists who work in
TEC from elsewhere in IRS.

Page 12 GAO- 03- 711 Workforce Planning and skills of the current
workforce to do analyses that are critical to workforce planning. IRS and
SB/ SE officials also pointed to budget

fluctuations that could limit their strategies to close gaps in the
workforce needed by TEC over time. For example, the budget may be
insufficient to replace losses of TEC workforce skills due to retirement.
Finally, they said that if the workforce plan could adversely affect
current TEC employees,

dealing with employee unions to address the concerns could be a challenge.
We have reported on these and other challenges that any agency faces in
doing successful workforce planning. 12 As discussed in our previous
reports, and echoed by OPM and OMB

guidance, a strategic workforce plan enables an agency to identify gaps in
its current and future needs, select strategies to fill the gaps, and
evaluate the success of the plan to make revisions that may be needed to
better meet program goals. Such a workforce plan does not yet exist for
TEC. Without such a plan, TEC is less likely to have the right number of
staff with the right skills in the right places at the right time to
address its priorities. Further, it is difficult to justify budget and
staffing requests if the workforce needs are not known.

IRS and SB/ SE have started taking steps to develop a strategic workforce
plan for TEC based on the critical elements under OPM and OMB guidelines,
and our guidelines for what a plan is to include and how it is to be
developed and implemented. However, IRS and SB/ SE have not yet identified
many details on how the plan for TEC will incorporate the elements.
Without these details, we cannot be certain that the critical elements
will be used and contribute to the program goals.

Given the uncertainty on how the workforce plan for TEC will be developed
and implemented, we recommend that the Commissioner of Internal Revenue
ensure that the workforce plan for TEC be developed in conformance with
the critical elements for what a plan should include and how a plan should
be developed and implemented.

12 See U. S. General Accounting Office, Acquisition Workforce: Status of
Agency Efforts to Address Future Needs, GAO- 03- 55 (Washington, D. C.:
Dec. 18, 2002). Conclusions

Recommendation for Executive Action

Page 13 GAO- 03- 711 Workforce Planning We requested comments on a draft
of this report from IRS. The Commissioner of Internal Revenue provided
written comments in a letter

dated May 28, 2003. (See appendix I.) These comments neither explicitly
agreed nor disagreed with our recommendation to ensure that a workforce
plan for TEC is developed in conformance with the critical elements of
what a plan should include and how it should be developed and implemented.

The Commissioner did say that IRS strongly endorses the development of a
strategic workforce plan and that IRS has made progress on this effort,
listing eight steps that have been taken. The Commissioner also said that
the steps were a set of integrated strategies that reflect IRS*s
commitment to improve its workforce planning efforts and that they
addressed the issues raised in our report. To the extent that IRS had told
us about how these steps contributed to a workforce plan for TEC, our
report discusses them when we describe IRS*s efforts to create such a plan
using the critical elements. Although we believe that these steps are
useful, we made our recommendation because we did not see enough details
to be assured that a workforce plan for TEC would be sufficiently
developed and implemented in accordance with the critical elements.

We are encouraged that IRS strongly endorses development of a strategic
workforce plan. We look forward to seeing a workforce plan for TEC.

As we agreed with your staff, unless you publicly release the contents of
this report earlier, we will not distribute it until 30 days after its
issue date. At that time, we will send copies of this report to the
Ranking Minority Member of the Senate Committee on Small Business and
Entrepreneurship. We will also send copies to the Commissioner of Internal
Revenue and other interested parties. We will make copies available to
others on request. In addition, the report will be available at no charge
on the GAO Web site at http:// www. gao. gov. Agency Comments

and Our Evaluation

Page 14 GAO- 03- 711 Workforce Planning This report was prepared under the
direction of Thomas Short, Assistant Director. Other major contributors
include Catherine Myrick and Grace

Coleman. If you have any questions or would like additional information,
please contact me at (202) 512- 9110 or brostekm@ gao. gov or Thomas Short
at (202) 512- 9110 or www. shortt@ gao. gov.

Michael Brostek Director, Tax Issues

Appendix I: Comments from the Internal Revenue Service Page 15 GAO- 03-
711 Workforce Planning Appendix I: Comments from the Internal Revenue
Service

Appendix I: Comments from the Internal Revenue Service Page 16 GAO- 03-
711 Workforce Planning (440185)

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