Summary: An audit of the Internal Revenue Service (IRS) reveals that the agency is hampered by serious, pervasive financial management problems, including the inability of antiquated systems to generate reliable financial information needed to manage IRS operations. GAO is unable to express an opinion on the reliability of IRS' fiscal year 1993 Principal Financial Statements. Critical supporting information for seized assets, accounts payable, and collection by type of tax was unavailable, and supporting information for in-process revenue transactions, tax credit balances, and funds with the Treasury Department was not properly analyzed and recorded. Additionally, most financial statement balances were plagued by errors in revenue and operating funds transactions. This report discusses the scope and severity of IRS' financial management and control problems, the adverse impact of these problems on IRS' ability to effectively carry out its mission, and IRS' actions to remedy the problems. GAO makes recommendations to help IRS continue its efforts to resolve these long-standing and difficult problems and strengthen its financial management operations.
