United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2002-05-09 monographic deposited born digital GA 1.13:GAO-02-234R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-234R P0b002ee180374bc5 f:d02234r DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-02-234R machine generated eng fdlp REPORT GAOREPORTS-GAO-02-234R GAO-02-234R Economic analysis Information technology Investments Information systems Internal controls IRS Enterprise Life Cycle Correspondence A03300 IRS Guidance on Economic Analyses in Investment Business Cases (09-MAY-02, GAO-02-234R). Because the Internal Revenue Service (IRS) plans to spend $2.9 billion to modernize its information systems, GAO reviewed the latest draft of the Investment Decision Management Business Case Procedure. The procedure provides guidance for the Integrated Project Teams to justify information technology (IT) investments. This letter presents GAO's observations on the guidance where modifications or additions would ensure that the economic analyses in IRS business cases are consistent with commonly accepted principles. IRS' draft guidance on business case documentation represents an important step toward ensuring that IRS management has relevant information on which to base its critical IT investment decisions. However, some aspects of IRS' guidance are inconsistent with commonly held principles of public sector cost-benefit analysis. Most important, the guidance does not require the computation of a comprehensive social net present value (NPV)--the standard for deciding whether a government investment can be justified on economic grounds. The two partial NPV computations that IRS' guidance requires are inappropriate because they do not incorporate the proper values for all relevant benefits and costs for investment projects with significant effects outside of IRS. In addition, IRS' two NPV's are not additive, so even if all benefits and costs were properly valued, decision makers would be unable to determine the overall net value of an investment. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-02-234R/html/GAOREPORTS-GAO-02-234R.htm GAO-02-234R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-234R Correspondence GAO-02-234R; IRS Guidance on Economic Analyses in Investment Business Cases; Economic analysis Information technology Investments Information systems Internal controls IRS Enterprise Life Cycle