The Internal Revenue Service lacks supporting documentation for at least $394,000 in Recovery funded payments to contractors and possibly as much as $928,000, the Treasury Inspector General for Tax Administration (TIGTA) has found.
The IRS received $203 million in Recovery funding to pay for the oversight of 56 tax provisions mandated in the stimulus legislation. The agency used some of the money to hire contractors to reprogram computer systems, update tax forms and publications, and provide customer assistance to taxpayers regarding the Recovery tax credits. But agency officials “did not obtain required documentation supporting all billed labor charges,” according to the recently released TIGTA report.
“Our review of a statistically valid sample of $1 million in labor charges identified that the IRS did not have documentation supporting $394,430 of the invoiced labor hours that were paid,” the report states. “Applying the results of our analysis to the $5.3 million in labor charges for the procurement in which unsupported payments were identified, TIGTA estimates a total of $927,992 may have been erroneously paid.”
However, TIGTA officials found that the IRS had obtained proper documentation supporting $34,000 in travel expenses claimed by contractors.
The agency agreed with the report’s recommendations to tighten policies and procedures regarding contractor invoicing, and IRS officials plan to review those charges that TIGTA identified as lacking proper documentation.
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