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TIGTA Finds IRS Employee Suggestion Program Elimination Possibly' Premature'

S.J. Steinhardt
Published Date:
Apr 4, 2023

The IRS eliminated its Employee Suggestion Program (ESP) without plans for a substitute, a decision that the Treasury Inspector for Tax Administration (TIGTA),  in a new report, said “may have been premature”

TIGTA said that it launched the audit because the IRS terminated the program on Oct. 1, 2021, without a plan to replace it. The objective was to review the effectiveness of the program for fiscal years 2018 through 2021. The review included the benefits, costs, employee engagement and taxpayer service improvements resulting from the program, and to evaluate whether the program’s termination was appropriate.

TIGTA noted that the IRS cited the “high ESP administrative costs compared to the benefits received and the significant rate of rejection of employee suggestions” as reasons for the program’s cancellation without plans for a replacement. TIGTA agreed that “administrative costs seemed excessive"; of the 2,824 employee suggestions that made it through initial screening, the coordinators spent an average of 31 hours on each suggestion. These 207 coordinators “were not subject matter experts and [their] role was administrative in nature,” according to TIGTA. 

The report also found that the cost to operate the program was nearly $4.2 million, with five-year costs of over $20.9 million, while the first year net tangible savings from fiscal years 2017 through 2021 were $224,797. “Overall, the operating cost of the ESP was substantially greater than the cost savings,” it read.

Some IRS business units have employee engagement forums but, unlike the ESP, they do not allow employees to submit their ideas or suggestions, or receive rewards for suggestions that are adopted.

TIGTA said that a servicewide employee feedback program would be effective in engaging employees and improving morale. The report quoted a Harvard Business Review study that found that employee engagement was very important to achieving overall organizational success. Yet, only 63 percent of IRS employees felt encouraged to come up with new ideas, and only 52 percent felt that the IRS was committed to providing the necessary resources to develop new ideas, according to the Fiscal Year 2022 Federal Employee Viewpoint Survey report, which the TIGTA report quoted.   

TIGTA recommended that the IRS should contact comparable federal agencies with the highest levels of engagement and employee satisfaction for ESP best practices, and use that information, as well as employee survey data, to develop options for a new servicewide employee feedback process to support the agency’s transformation efforts under the Inflation Reduction Act. IRS management agreed with both recommendations.

In response to the TIGTA report, IRS human capital officer David Aten told Accounting Today that that the agency encourages employee feedback through forums such as regular team meetings, town halls, "walk in my shoes" activities, "idea walls," lunch and learns, "pulse" surveys and the Federal Employee Viewpoint Survey. He agreed that an improved ESP could be valuable and added that the IRS is committed to exploring a possible replacement program where employees could share their feedback as part of its bargaining discussions with the National Treasury Employees Union.

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