United States General Accounting Office

GAO Report to the Honorable

Margaret Milner Richardson,

Commissioner of Internal Revenue

January 1997 TAX

ADMINISTRATION

Lessons Learned From

IRS’ Initial Experience

in Redeploying

Employees

GAO/GGD-97-24

GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-260161 

January 9, 1997

The Honorable Margaret Milner Richardson

Commissioner of Internal Revenue

Department of the Treasury

Dear Mrs. Richardson:

This report describes IRS’ initial efforts to redeploy employees under the terms of the

Redeployment Understanding and provides information on our analysis of the results of those

efforts. We did this review under our basic legislative authority.

The report contains recommendations to you. As you know, 31 U.S.C. requires the head of a

federal agency to submit a written statement on actions taken on our recommendations to the

Senate Committee on Governmental Affairs and the House Committee on Government Reform

and Oversight not later than 60 days after the date of the report. A written statement also must

be sent to the House and Senate Committees on Appropriations with the agency’s first request

for appropriations made more than 60 days after the date of the report.

We are sending copies of this report to the Secretary of the Treasury; the Director, Office of

Management and Budget; and interested committees and subcommittees. We will make copies

available to others upon request.

Please call me at (202) 512-8633 if you have any questions about the report. Other major

contributors to this report are listed in appendix VII.

Sincerely yours,

Lynda D. Willis

Director, Tax Policy and

 Administration Issues
Executive Summary

Purpose Thousands of employees could have their jobs eliminated or redesigned as

Internal Revenue Service (IRS) continues modernizing its operations over

the next several years. For instance, many jobs that involved processing

tax returns at IRS service centers could be eliminated as IRS moves to a

paperless environment; and many jobs now directed at resolving taxpayer

account issues, mainly through correspondence, are to be redesigned as

customer-service jobs aimed at resolving such issues primarily by

telephone. Rather than fire employees when their jobs become obsolete,

IRS decided to give employees the opportunity to transfer into new jobs—a

process referred to as “redeployment.”

Because it is important that IRS have the workforce needed for the new

environment, GAO, under its basic legislative authority, reviewed IRS’ initial

use of redeployment procedures. GAO’s objective was to determine

whether there were lessons to be learned from (1) IRS’ initial use of these

procedures and their impact on IRS’ operations and (2) the reaction of

redeployed employees and their supervisors to redeployment and the

redeployment process. Among other things, GAO reviewed redeployment

results at four IRS service centers and four IRS district offices and

administered structured interviews to employees and supervisors at those

eight locations. The results of GAO’s interviews are not projectable.

Background In a November 1993 Redeployment Understanding, IRS and the National

Treasury Employees Union (NTEU) outlined the procedures to be used

when redeploying IRS employees who lost their jobs due to modernization

initiatives. In general, the procedures called for filling the new jobs

through lateral reassignment of volunteers, by seniority. If not enough

volunteers came forward, IRS had the option of involuntarily reassigning

the least senior employees in the local area or using IRS-wide competition

to fill the remaining openings. IRS used the redeployment procedures in

fiscal years 1994 and 1995 to fill new customer-service jobs and vacancies

created in the modernization process as well as more than 4,000 new

compliance and customer-service positions authorized by Congress for

fiscal year 1995.

Large-scale employee displacement had not occurred at the time of GAO’s

audit because IRS was still in the early stages of its planned modernization.

Also, because of funding reductions in fiscal year 1996 and expectations of

reduced funding levels in fiscal year 1997, IRS decided that it could no

longer guarantee that employees would be given the opportunity to

transfer into new jobs within the agency. Thus, after GAO completed its

Page 2 GAO/GGD-97-24 IRS’ Redeployment Experiences
Executive Summary

audit work, IRS terminated the Redeployment Understanding and began

planning for a near-term reduction-in-force.

Results in Brief If IRS develops new redeployment procedures, there are several lessons to

be learned from its initial redeployment experiences. For example,

although redeployment was intended as a way to move employees out of

jobs that would no longer be needed in IRS’ modernized environment, it

was initially used to move thousands of employees whose jobs were not in

immediate jeopardy into new or existing positions that were expected to

be needed in the new environment. Thus, many jobs vacated by

redeployed employees had to be filled by new employees, who may

subsequently have to be redeployed. Training requirements increased and

productivity and taxpayer services declined as experienced employees

were replaced by inexperienced employees.

Although some operational inefficiencies, such as reduced productivity

and increased training, can be expected as an inherent part of any

redeployment process, the negotiated Redeployment Understanding

exacerbated these inefficiencies because it generally (1) made many IRS

employees eligible for redeployment years before their jobs were expected

to be eliminated and (2) did not allow IRS to fill jobs with employees who

had related experience before bringing in volunteers from unrelated areas.

GAO’s interviews of redeployed employees and supervisors pointed to other

lessons that might be learned from IRS’ initial redeployment efforts. Most

employees were generally satisfied with their new jobs, and supervisors

were generally satisfied with their new employees. However, many

employees cited concerns about the information IRS provided to explain

the redeployment process, the assistance IRS provided to help employees

find jobs, and the training IRS provided.

Principal Findings

Redeployment Procedures

Led to Premature

Reassignments and

Operational Inefficiencies

It seems reasonable to expect some operational inefficiencies, such as an

increase in training and a decrease in productivity, as an inherent part of

any redeployment process. However, these inefficiencies were

compounded at IRS, especially in the service centers, by the use of

redeployment procedures that made too many employees eligible for

Page 3 GAO/GGD-97-24 IRS’ Redeployment Experiences
Executive Summary

redeployment too soon and limited IRS’ ability to take full advantage of

employees’ job experiences.

The Redeployment Understanding designated many IRS employees,

including virtually all service center employees, as eligible to be

redeployed, without regard to whether or when their jobs were to be

eliminated. It allowed many employees to redeploy to new positions years

before their old jobs were to be eliminated. As a result, many of the

redeployed employees had to be replaced with other, less-experienced,

employees and new hires. During 1994 and 1995, for example, IRS

redeployed 3,054 career-status employees from service center processing

divisions, but hired 3,886 new career or career-conditional employees in

those divisions. (See pp. 16 to 19.)

The redeployment procedures also limited IRS’ ability to reinvest

experience. Although many employees are currently performing largely

the same work as is planned for redesigned jobs, the Redeployment

Understanding generally required that IRS fill positions by reassigning,

based on seniority, redeployment-eligible volunteers. Such a requirement

could result in selecting inexperienced employees from unrelated areas

because it does not allow IRS to select less-senior staff who are already

doing similar work. Such procedures, for example, are inconsistent with

IRS’ planned phased transfer of experienced employees and their

workloads into the newly designated, customer-service jobs. (See pp. 19 to

21.)

Because of other variables affecting productivity (such as new or

increased workloads), it is difficult to quantify the degree of productivity

decline specifically attributable to redeployment, much less the portion

that was inherent versus that which was avoidable. Nevertheless, GAO

thinks it is reasonable to assume that the redeployment procedures, by

making too many employees eligible for redeployment too soon and by

limiting IRS’ ability to take full advantage of employees’ job experience,

resulted in a greater level of inexperience than might have otherwise been

the case and thus led to less productivity.

That position was supported by two internal IRS studies, which concluded

that the service center divisions responsible for processing tax returns had

experienced significant productivity declines during the 1995 filing season,

in part due to redeployment. For example, processing divisions lost

productivity because more than 1,400 employees who were experienced in

processing returns were redeployed to compliance and customer service

Page 4 GAO/GGD-97-24 IRS’ Redeployment Experiences
Executive Summary

jobs and replaced by inexperienced employees who were either newly

hired or reassigned from other areas. (See pp. 27 to 30.)

The IRS supervisors GAO interviewed also reported declines in productivity.

For example, 18 (75 percent) of the 24 interviewed supervisors who lost

employees to redeployment reported that the volume of their unit’s output

decreased as a result of redeployment. Also, 10 (42 percent) of the 24

supervisors said that the loss of employees degraded their service to

taxpayers causing, for example, case backlogs and longer amounts of time

to answer telephone calls. Comments from the 30 supervisors who gained

employees were more mixed. For example, 10 said that their unit’s output

declined while 16 said that their unit’s output had either increased or had

not been affected by the redeployment. (See pp. 24 to 27.)

According to IRS officials and supervisors GAO interviewed, redeployment

also led to an increase in training requirements. Training requirements can

be expected to increase as new jobs are added. However, in some cases

training requirements increased twofold because many employees whose

jobs were not eliminated moved to the new jobs. The employees who

moved to the new jobs had to be trained for them while other employees

had to be trained for the jobs left vacant. Of the 54 supervisors

interviewed, for example, 40 (74 percent) said that the redeployment of

experienced employees out of their units or inexperienced employees into

their units increased their unit’s training requirements. (See pp. 22 to 24.)

Before the Redeployment Understanding was terminated, IRS and the NTEU

had made some revisions to make better use of employee experience.

However, those actions had not fully resolved the problems identified by

GAO. (See pp. 30 and 31.)

Most Interviewed

Employees Satisfied With

New Jobs, but Many

Dissatisfied With

Redeployment Process

It may be some time before redeployed employees perform as productively

in their new jobs as in their old ones or as productively as the experienced

employees they replaced. However, the comments of the employees and

supervisors who GAO interviewed were encouraging, as the vast majority

generally said that they were able to do their new work in an acceptable

manner. The 30 supervisors GAO interviewed who had gained employees

through redeployment were generally satisfied with the 346 employees

redeployed to their units and said that they were performing at or above

the “fully successful” level—the minimum acceptable level for

performance appraisal purposes. Most of the 188 redeployed employees

GAO interviewed were satisfied with their new jobs. However, many of the

Page 5 GAO/GGD-97-24 IRS’ Redeployment Experiences
Executive Summary

redeployed employees GAO interviewed said that they required more

training than that which is normally provided for their positions. (See pp.

37 to 41.)

Many of the employees were dissatisfied with the redeployment process,

particularly with the amount and quality of information, assistance, and

training they received. For example, almost one-fourth of the employees

interviewed were dissatisfied with the assistance IRS provided to help them

find a new position. Of those who gave reasons for their dissatisfaction,

most said they needed help in understanding the redeployment process,

accessing job announcements, determining their job qualifications, and

researching their options. (See pp. 41 to 53.)

Recommendations GAO recommends that the Commissioner of Internal Revenue—should

future redeployment procedures be developed—address the problems

discussed in this report, including (1) limiting redeployment eligibility to

employees whose current jobs have been or are about to be substantially

altered or eliminated and (2) allowing IRS to redirect employees who are

currently and successfully performing existing jobs to redesigned jobs that

are substantially the same before seeking volunteers from unrelated

functions. GAO also recommends that, as part of any future redeployment

effort, the Commissioner consider ways to improve management

communications with employees concerning redeployment assistance,

information, and training. (See pp. 32 and 44.)

Agency Comments GAO obtained oral and written comments on a draft of this report from IRS

and NTEU in September 1996. Those comments and GAO’s evaluation are

discussed beginning on pages 32 and 44.

IRS agreed with GAO that any future redeployment should be more focused

and better timed but said that the report’s discussion of the timing of the

past redeployment was oversimplified. IRS said that the results would have

been different if modernization had proceeded on the schedule envisioned

when the Redeployment Understanding was signed. GAO disagrees because

it had considered IRS’ modernization schedule in making its assessment. IRS

did not provide any information to contradict the scheduling information

in GAO’s report and said that information in the report was generally

factual.

Page 6 GAO/GGD-97-24 IRS’ Redeployment Experiences
Executive Summary

IRS also said that Congress’ authorization of thousands of new compliance

and customer-service positions provided an opportunity to redeploy many

employees and that IRS would have had even more employees to redeploy

if it had filled the new positions with external hires rather than through

redeployment. GAO is not suggesting that the new positions should have

been filled through external hires. It is suggesting, instead, that IRS would

have had less disruption if the redeployment procedures had focused on

finding new jobs for employees as their displacement became imminent

and allowed IRS to redeploy employees who had experience related to the

jobs being filled before those who lacked related experience.

NTEU said that the report was “flawed in its design” and failed to present

any data to support most of its conclusions. As an example, NTEU cited

GAO’s conclusion that the redeployment procedures led to premature

reassignments and operational inefficiencies. GAO believes that its report

contains sufficient data to support that conclusion, much of which came

from IRS’ own studies and employees.

However, NTEU said that to accurately reach such a conclusion, GAO would

have had to present some comparative analysis of the operational impact

of the Redeployment Understanding versus some alternative selection

procedure, such as the traditional competitive selection process. GAO did

not intend to suggest, as NTEU’s comment seems to imply, that IRS should

have used the traditional competitive process in lieu of the redeployment

procedures. What GAO is suggesting that the redeployment process would

have been more efficient if the procedures had been more focused and

better timed. However, GAO did not do a comparison of what the

operational impact would have been under different procedures because

such a comparison would have been highly speculative.

Page 7 GAO/GGD-97-24 IRS’ Redeployment Experiences
Contents

Executive Summary 2

Chapter 1 

Introduction

10

Organizational Change at IRS and Potential Impact on Employees 11

Objective, Scope, and Methodology 14

Chapter 2 

Redeployment

Procedures Led to

Premature

Reassignments and

Operational

Inefficiencies

16

Redeployment Procedures Made Too Many Employees Eligible

Too Soon and Limited IRS’ Ability to Take Full Advantage of

Employees’ Job Experience

16

Redeployment Resulted in Increased Training, Decreased

Productivity, and Reduced Service to Taxpayers

22

IRS and NTEU Made Some Changes to Reduce Experience Loss 30

Conclusions 31

Recommendation to the Commissioner of Internal Revenue 32

Agency Comments and Our Evaluation 32

Chapter 3 

Redeployed Employee

Job Satisfaction and

Initial Performance

Results Were

Encouraging

37

Most Redeployed Employees Were Meeting Performance

Standards and Were Satisfied With Their New Jobs

37

Some Employees, Especially Those Who Lacked Related

Experience, Required Additional Training

39

Many Employees Found Redeployment Assistance, Information,

and Training Inadequate

41

Many Supervisors Were Also Dissatisfied With the Redeployment

Process

43

Conclusions 44

Recommendation to the Commissioner of Internal Revenue 44

Agency Comments and Our Evaluation 44

Appendixes Appendix I: IRS Staffing in January 1994 and January 1996 46

Appendix II: Overview of IRS’ Redeployment Planning 47

Appendix III: Information on How We Selected the IRS Sites We

Visited and the Employees and Supervisors We Interviewed

49

Appendix IV: Changes in Staffing at Service Center Processing

Divisions

52

Appendix V: Comments From the Internal Revenue Service 53

Appendix VI: Comments From the National Treasury Employees

Union

57

Appendix VII: Major Contributors to This Report 61

Page 8 GAO/GGD-97-24 IRS’ Redeployment Experiences
Contents

Tables Table 3.1: Redeployed Employees’ Opinions on the Adequacy of

Redeployment Assistance, Information, and Training

42

Table 3.2: Gaining and Losing Supervisors’ Opinions of How IRS

Handled the Redeployment Process

43

Table I.1: IRS Staffing in January 1994 and January 1996 46

Table III.1: Structured Interviews by Site 51

Table IV.1: Changes in Processing Division Staffing Between

January 1994 and December 1994

52

Table IV.2: Changes in Processing Division Staffing Between

December 1994 and January 1996

52

Figures Figure 2.1: Supervisors’ Views on How Redeployment Affected

Their Units’ Training Requirements

24

Figure 2.2: Losing Supervisors’ Views on How Redeployment

Affected Their Units’ Productivity

25

Figure 2.3: Gaining Supervisors’ Views on How Redeployment

Affected Their Units’ Productivity

26

Figure 2.4: Permanent Employee Transfer Rates at Submission

and Nonsubmission Processing Centers

29

Figure 3.1: Redeployed Employees’ Job Satisfaction 39

Abbreviations

ACS Automated Collection System

DPS Document Processing System

IDRS Integrated Data Retrieval System

IRS Internal Revenue Service

NTEU National Treasury Employees Union

OJT on-the-job training

OPM Office of Personnel Management

PRP Problem Resolution Program

TPS Taxpayer Service

Page 9 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

As the Internal Revenue Service (IRS) replaces its outdated computer and

telecommunications systems, it is also overhauling the way it is organized,

staffed, and operated. These changes are part of a new business vision

designed to take advantage of new capabilities as IRS moves toward a

paperless electronic environment. As these changes are phased in over the

next several years, thousands of employees could be displaced as their

jobs are eliminated or redesigned.

IRS pledged in 1990 that employees displaced by modernization would be

given the opportunity for retraining that would allow them to maintain

their employment at the same grade. To help keep this pledge while also

meeting the job requirements of the new environment, IRS negotiated

standard redeployment policies and procedures in a November 1993

Redeployment Understanding with the National Treasury Employees

Union (NTEU). According to the Understanding and IRS officials, the goal of

the redeployment process was to move employees out of positions that

would not continue in the modernized environment and into

positions—new, redesigned, or existing—that would be needed in the new

environment. At that time, IRS planned to meet its changing job

requirements largely through redeployment.

Because of funding reductions in fiscal year 1996 and expectations of

reduced funding levels in fiscal year 1997, however, IRS decided that it

could no longer guarantee that employees would be given the opportunity

to transfer into new jobs within the agency. Thus, after we had completed

our audit work, IRS terminated the Redeployment Understanding and

began planning for a near-term reduction-in-force.

Because it is important that IRS’ workforce have the knowledge, skills, and

abilities needed for the new environment, we reviewed, under our basic

legislative authority, IRS’ initial use of the procedures established through

the Redeployment Understanding. Although those procedures have since

been terminated, IRS’ experiences in implementing them provide useful

information for developing any future redeployment procedures.

Page 10 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

Organizational

Change at IRS and

Potential Impact on

Employees

In January 1994, IRS had about 131,000 employees1 in a National Office, 7

regional offices, 63 district offices, 10 service centers, 2 computing

centers, and 1 compliance center (appendix I has a detailed breakdown by

type of employee). District operations included hundreds of local posts of

duty, 34 locations that housed taxpayer service and collection call sites,2

and 3 forms distribution centers.

As part of its modernization, IRS, in 1995 and 1996, reduced the number of

regions from 7 to 4 and consolidated the number of districts from 63 to 33.

IRS is also consolidating various support functions that were decentralized

in as many as 84 separate organizations. For example, most of the staff

support for basic resources management functions, such as personnel,

facilities management, and training, is being consolidated into 21 host

locations. Similarly, information systems jobs, such as computer

programmers and operators at service centers and district offices, are to

be consolidated into a yet-to-be determined number of field information

systems offices.

The restructuring of IRS’ service centers, which accounted for about

39 percent of its workforce in January 1994, is a major component of IRS’

new business vision. Currently all 10 service centers process tax returns

and other documents and have various forms of non face-to-face

interaction with taxpayers. IRS’ plan, as of February 1996, was to have

(1) all 10 centers function as customer-service sites,3

 (2) at least 5 of the 10

centers function as submission processing centers,4

 and (3) 1 of the 5

submission processing centers also serve as IRS’ third computing center.5

IRS is also changing where and how it provides customer service. Until

1994, customer service was provided at the 10 service centers, the 34

locations that housed ACS and/or TPS sites, and the 3 forms distribution

centers. Under the new business vision, customer service is to be provided

1

The number had declined to about 126,500 in January 1996.

2

The 34 locations included 3 that housed Automated Collection System (ACS) call sites, 13 that housed

Taxpayer Service (TPS) call sites, and 18 that housed both ACS and TPS sites. ACS sites contact

taxpayers to collect overdue taxes and answer calls from taxpayers in response to collection actions.

TPS sites answer calls from taxpayers with questions on tax laws, accounts, and procedures.

3

Customer-service sites are to resolve taxpayer questions and problems that do not require face-to-face

contact with the taxpayer.

4

Submission processing centers are to process paper documents, including tax returns, information

documents (such as forms 1099 and W-2), and correspondence.

5

Computing centers are to process electronic tax returns and maintain central files of individual and

business tax accounts.

Page 11 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

at only 23 locations—the 10 service centers and 13 other locations.

Besides absorbing the functions and workloads of TPS and ACS sites and

forms distribution centers, customer-service sites are to also absorb and

attempt to convert, to the telephone, some work now done by

correspondence in various service center branches, such as collections,

adjustments, and taxpayer relations.

In December 1993, IRS estimated that these business vision changes would

eliminate more than 19,600 service center jobs and more than 4,600 district

office jobs. In addition, the consolidation of regions and districts was

expected to displace over 1,100 managers and support staff.

To maintain employee morale and cooperation during the transition to its

new environment, IRS pledged, in a 1990 policy statement, that career and

career-conditional6

 employees would be given the opportunity for

retraining that would allow them to maintain employment at their current

grade.7

 This pledge did not apply to temporary8 and term9 employees. IRS

officials believed that attrition, the use of term employees for jobs being

phased out, and the need to fill the additional customer service and

compliance jobs authorized by Congress as part of IRS’ fiscal year 1995

appropriation, would enable IRS to meet new job requirements and keep its

job protection pledge. Under this workforce transition strategy, displaced

employees would have to be redeployed to new or redesigned jobs that

would generally require greater technical knowledge and communication

skills than are needed for their current jobs.

6

In general, according to Office of Personnel Management (OPM) regulations, persons not employed

on a temporary or otherwise limited basis are appointed as career or career-conditional employees.

New federal employees generally attain career status after 3 years of substantially continuous,

creditable service in career-conditional status.

7

As noted earlier, IRS has since decided that it can no longer guarantee continuing employment and

has begun planning for a near-term reduction-in-force. Thus, in effect, the 1990 policy statement has

been rescinded.

8

OPM regulations authorize federal agencies to make a temporary limited appointment to fill a

short-term position (i.e., one that is not expected to last longer than 1 year). The appointment may be

extended up to 2 years, or longer, in increments of 1 year or less, if the situation meets certain OPM

criteria.

9

OPM regulations authorize federal agencies to make a term appointment when the employment need

is longer than 1 year but not more than 4 years. Term employment ends automatically when the term

expires.

Page 12 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

Responding to a series of reports citing the need for sound human

resource planning as IRS implements its new business vision,10 IRS has done

much to prepare for the redeployment of employees whose jobs are

expected to be redesigned or eliminated. Over the past 3 years, IRS has

(1) developed various models for projecting and comparing current and

future workforce requirements, (2) established standard redeployment

policies and procedures and a Redeployment Resolution Council11 in

partnership with NTEU, and (3) developed site-specific plans for

redeploying employees. Appendix II provides a brief overview of these

efforts.

In the November 1993 Redeployment Understanding, IRS and NTEU

established, for the first time, standard procedures for the redeployment of

bargaining-unit employees12 whose jobs would be redesigned or eliminated

in the transition to the modernized environment. Before they established

standard procedures, IRS and NTEU were negotiating the redeployment of

displaced employees on a project-by-project basis. According to its general

work contract with NTEU, IRS could involuntarily reassign employees whose

jobs were abolished, but such reassignments were subject to

negotiations.13

The new standard procedures generally required that vacancies for

positions needed in the new environment be filled first through lateral

reassignment of eligible volunteers, in order of their seniority, as defined

by their time in federal service. If the number of volunteers was

insufficient, IRS had the option of using involuntary reassignment of the

least senior employees in the local area or using the normal IRS-wide

10Managing IRS: Actions Needed to Assure Quality Service in the Future (GAO/GGD-89-1, Oct. 14,

1988); Managing IRS: Important Strides Forward Since 1988 but More Needs to Be Done

(GAO/GGD-91-74, Apr. 29, 1991); Review of the Tax Systems Modernization of the Internal Revenue

Service, National Research Council, September 1992; and Tax Systems Modernization: Automated

Underreporter Project Shows Need for Human Resource Planning (GAO/GGD-94-159, July 8, 1994).

11The five-member Redeployment Resolution Council was composed of the NTEU National President

and one other NTEU member, IRS’ Modernization Executive and Chief of Management and

Administration, and a neutral fifth member. The Council’s duties generally included interpreting

redeployment policies and procedures, approving site redeployment plans, and making decisions on

redeployment related grievances.

12NTEU represents about 85 percent of the employees in service center and district office positions.

These employees are referred to as “bargaining-unit employees.” Managers and employees in positions

not represented by NTEU were subject to different redeployment procedures, which gave regional

commissioners the authority to determine how those employees would be selected.

13The impacts of involuntarily reassigning displaced employees to locations within 20 miles were

subject to subsequent negotiations, while arrangements had to be negotiated in advance for

reassignments beyond that distance.

Page 13 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

competitive process14 to fill the remaining openings. While the

Redeployment Understanding was a binding document, it could be

reopened or terminated at any time by IRS or NTEU. As noted earlier, it was

terminated effective August 23, 1996.

Because IRS was still in the early stages of its planned overhaul at the time

of our audit work, the large-scale employee displacement expected from

the consolidation and modernization of the customer-service and

submission processing functions had not yet occurred. Thus, with the

exception of some displaced National and Regional Office staff,

redeployment in fiscal years 1994 and 1995 was driven largely by the

availability of positions into which employees in jobs not expected to be

needed in the new environment could be redeployed. They included new,

redesigned, or existing (vacant) positions that could be expected to

continue in the modernized environment. According to National Office

officials, redeployment in fiscal year 1994 was driven largely by the need

to staff the first operational customer-service units and to fill vacancies

created by attrition. Another factor driving redeployment in fiscal year

1995 was the reassignment of existing employees to over 4,300 new

compliance and customer-service jobs authorized that year.

Objective, Scope, and

Methodology

We examined IRS’ early experience in redeploying employees to new jobs

using the procedures established in the November 1993 Redeployment

Understanding between IRS and NTEU. Our objective was to determine

whether there were lessons to be learned from (1) IRS’ initial use of these

procedures and their impact on IRS’ operations and (2) the reaction of

redeployed employees and their supervisors to redeployment and the

redeployment process.

To address our objective we

• reviewed the November 1993 Redeployment Understanding and associated

supplements and revisions and discussed redeployment policies and

procedures with cognizant IRS and NTEU officials;

• reviewed site redeployment plans and discussed preliminary redeployment

results at four IRS service centers (Atlanta; Brookhaven, NY; Cincinnati;

and Fresno, CA) and four district offices (Atlanta, Baltimore, Cincinnati,

and San Francisco);

14In general, the competitive process ranks applicants by scores derived mainly from their last

performance appraisal in their current position and, to a lesser extent, from their (1) pertinent

experience and training and (2) incentive awards.

Page 14 GAO/GGD-97-24 IRS’ Redeployment Experiences
Chapter 1 

Introduction

• reviewed IRS reports on redeployment results, including related internal

audits or studies;

• obtained and analyzed databases showing overall IRS staffing at three

points in time—January 8, 1994; December 10, 1994; and January 6,

1996—in order to identify and monitor significant changes;15 and

• administered structured interviews, at the 8 locations we visited, to 188

employees who had been redeployed to new jobs, 30 supervisors who had

gained a total of 346 redeployed employees, and 24 supervisors who had

lost a total of 412 redeployed employees. The results of our interviews are

not projectable to all IRS managers and employees.

Appendix III contains information on how we selected the locations we

visited and the persons we interviewed.

Because IRS expected to make significant changes to its initial estimates of

workforce requirements and the extent that employees would be

redeployed to meet those requirements, we did not attempt to validate IRS’

workforce requirements and redeployment models or the output from

those models.

We conducted our review from June 1994 through July 1996 in accordance

with generally accepted government auditing standards. We requested

comments on a draft of this report from the Commissioner of Internal

Revenue and the National President of NTEU, or their designees. We

received written comments from IRS’ Chief, Management and

Administration, on September 11, 1996, and from NTEU’s National President

on September 17, 1996. Those comments are summarized and evaluated on

pages 32 and 44 and are reprinted in appendixes V and VI, respectively.

15Although we did not assess the reliability of the databases, the official from whom we obtained them

told us that the data elements we used were extracted from two highly reliable files maintained for IRS

by the Department of Agriculture’s National Finance Center as components of the Treasury Integrated

Management Information System and are used as a source for employee pay computations. Some of

the same data elements were also extracted as part of the separate reassignment databases that we

used to identify redeployed employees for interviewing. Those data elements were highly reliable

based on verification by the employees we interviewed.

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Because the new redeployment procedures made too many people eligible

for redeployment too soon and precluded IRS from directing experienced

people into new jobs, (1) many employees were redeployed years before

the jobs they left were to be eliminated and (2) training requirements

increased while productivity and customer service decreased.

Service centers, particularly their returns processing functions, were most

affected. To help cope with declining experience levels and higher error

rates, processing divisions increased their use of overtime and temporary

assignments (details). The processing divisions also ended up hiring more

new career and career-conditional employees than they had lost through

redeployment to sustain paper returns processing operations until delayed

modernization efforts are implemented.

Before the Redeployment Understanding was terminated, IRS and NTEU had

worked together to change redeployment policies and procedures to make

better use of employee experience, but they had not fully resolved these

problems.

Redeployment

Procedures Made Too

Many Employees

Eligible Too Soon and

Limited IRS’ Ability to

Take Full Advantage

of Employees’ Job

Experience

The November 1993 Redeployment Understanding designated many IRS

employees, including virtually all service center employees, as eligible for

redeployment without regard to whether or when their jobs were to be

eliminated. Consequently, many employees were redeployed too soon in

order to fill new compliance and customer service positions. IRS had to

hire several thousand new employees to replace experienced employees

who left jobs in service center returns processing divisions. Furthermore,

the Redeployment Understanding required IRS to fill positions with

volunteers by seniority, rather than first allowing IRS to redirect

experienced employees to new jobs requiring many of the same tasks as

their current jobs. The resulting increase in training requirements and

decline in productivity could have been minimized had the Redeployment

Understanding (1) limited redeployment to those employees whose jobs

were being eliminated and (2) allowed IRS to move employees who had the

experience and skills needed for the new jobs.

Too Many Employees Were

Redeployed Too Soon

As part of IRS’ fiscal year 1995 appropriation, Congress authorized

$405 million for IRS to hire the full-time equivalent of 6,238 employees.

According to IRS officials, the new jobs were primarily compliance and

customer-service jobs at service centers and district offices.

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While some of the new compliance and customer-service jobs were filled

by employees whose National Office or regional office jobs had been

eliminated, most were filled by service center and district office

employees whose jobs were not in jeopardy of being eliminated for several

years. According to IRS redeployment plans at the time, the displacement

of large numbers of processing employees was not expected to begin until

fiscal year 1997 or later, when IRS was to begin implementing its Document

Processing System (DPS)16 and consolidating its paper processing

operations into five service centers.17

As of September 30, 1995, IRS had filled 5,470 of these jobs—4,325 of them,

or 79 percent, with existing employees; and the rest were filled through

new hires. Many of the employees who transferred into those new jobs

had to be replaced with less-experienced employees. As shown in

appendix IV, IRS redeployed 1,182 and 1,872 career or career-conditional

employees from its processing divisions to jobs elsewhere in IRS in 1994

and 1995, respectively. During the same years, the processing divisions

hired 14 and 3,872 new, career or career-conditional employees,

respectively. These new career and career-conditional employees are also

eligible for redeployment. Although IRS hired mostly term employees in

1994, a National Office official told us that IRS had to hire new

career-status employees in 1995 because term employees could not be

used to sustain current processing operations long enough due to the

4-year limit on term employment.

The Redeployment Understanding contributed to this sizeable turnover of

service center staff by making almost all service center employees eligible

for redeployment, since substantial operational changes were planned for

the service centers. According to our analysis of IRS staffing data, of 50,580

service center employees on IRS’ rolls in January 1994, 47,317 were

designated as eligible for redeployment. The only exceptions were 2,796

term and temporary employees and 467 Criminal Investigation Division

employees. According to IRS National Office officials, NTEU would not agree

to limit redeployment eligibility to employees in specific jobs because IRS

had not finalized the types and numbers of positions needed for its new

environment. Also, according to an NTEU official, NTEU presumed that all

16Currently, data from most types of paper returns are manually transcribed into machine-readable

format for further automated processing and posting to taxpayer accounts. With DPS, paper returns

were to be electronically scanned and automatically converted to machine-readable format.

17IRS is reassessing its paper processing plans. It announced, on October 8, 1996, that DPS was being

terminated. According to IRS, it is considering other options, including contracting out and/or

acquisition of a new manual data entry system.

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service center jobs would be affected and that IRS should not offer

available jobs only to displaced employees.

Because, unlike at the service centers, many district office positions are

expected to continue in the modernized environment, the Redeployment

Understanding generally limited redeployment eligibility in district offices

to employees at closing ACS and TPS sites, resources management support

services employees, and some information systems employees. Although

redeployment eligibility at district offices was more restricted than at

service centers, many of the eligible district office employees were

designated as eligible long before their jobs were scheduled for

elimination. For example, among the district employees designated as

redeployment eligible in November 1993, there were about 5,500

employees at 29 ACS and TPS sites that were scheduled to close. At that

time, however, 27 of these 29 sites were not scheduled to close until

October 1999. The other two sites were scheduled to close in October 1996

and October 1997, respectively.

According to National Office officials, however, 11 of the 29 ACS and TPS

sites were closed earlier than expected because they experienced “high

attrition.”18 Specifically, nine sites that were scheduled to close in 1999

and the two sites that were scheduled to close by 1997 were closed 2 to 5

years early—between 1994 and 1996. Also, as of September 1996, eight

other sites that were scheduled to close in 1999 were rescheduled to close

sooner—from 1996 through 1998. However, 4 of the remaining 10 sites

originally scheduled to close in 1999 are now scheduled to close between

2000 and 2002.

On the basis of our analyses of staffing and reassignment data provided by

IRS, we believe that the early closure of some sites and the changes to

scheduled closure dates for other sites occurred, at least in part, because

employees who had been declared redeployment eligible in November

1993 were redeployed earlier than expected. For example, staffing data for

the Brooklyn TPS site showed that of the 240 employees who were on the

site’s rolls on January 8, 1994, 105 had been reassigned to other jobs; 3 had

been assigned to other TPS sites as of December 10, 1994; and 18 were no

18National Office officials told us that this attrition required IRS to redistribute call-site equipment and

workloads among the remaining sites that were scheduled to close and accelerate the planned

migration of workloads into customer-service centers.

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longer employed with IRS. At least 76 of the 108 reassigned employees

were reassigned before the office was closed in October 1994.19

Employees at four ACS and TPS sites were also designated as eligible even

though their jobs were to be merged with customer-service centers in the

same local area. As a result, many of these employees were redeployed out

of the closing sites while other career or career-conditional employees

were hired or redeployed into the closing sites.

Our structured interviews of 24 service center and district office

supervisors who lost redeployed employees provided further evidence of

premature redeployment. According to the supervisors, who reported

losing 412 employees, none of the positions vacated by those employees

had been eliminated. The supervisors said that IRS planned to fill 350

(85 percent) when funding became available, leaving 62 (15 percent) to be

eliminated.

Many of the service center officials and supervisors we interviewed

expressed the belief that too many employees were designated as eligible

for redeployment. For example, the Chief of the Collections Branch at one

center said that “blanket redeployment [eligibility]” for the entire service

center was a “mistake.” A Processing Division Chief at another center said

that redeployment eligibility should be limited to displaced employees and

should not include employees who will not be displaced for many years,

such as those in the Processing Division. A supervisor of a section at that

center who had gained redeployed employees said it had been a “costly

transition” because “all employees were considered redeployment eligible

even if their job had not been abolished.”

Redeployment Procedures

Limited IRS’ Ability to

Direct Experienced

Employees to Related Jobs

With some exceptions, such as hardships and placement actions resulting

from a grievance, the November 1993 Redeployment Understanding

generally required that vacancies for bargaining-unit positions that would

be needed in the new environment were to be filled as follows:

19We only had redeployment data for the eight sites we visited and thus could only identify

reassignment dates for employees who were reassigned to those sites.

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• Lateral reassignment (or change to lower grade), based on seniority,20 of

eligible21 volunteers (1) from within the local commuting area and then, if

the number of volunteers was insufficient, (2) from outside the local

commuting area.

• When the number of volunteers for lateral reassignment (or change to

lower grade) was insufficient, IRS could consider making directed

(involuntary) reassignments, by inverse seniority, from eligible employees

within the local commuting area.

• When the number of volunteers for lateral reassignment (or change to

lower grade) was insufficient and IRS did not use the directed reassignment

process, IRS could fill the vacancy through IRS-wide competition.22

• When there were no redeployment-eligible internal applicants, IRS could

fill vacancies for jobs that would be continued in the new environment

with external hires. Vacancies for noncontinuing jobs were to be filled by

temporary or term appointments.

In October 1994, IRS and NTEU made an exception to the Redeployment

Understanding to allow district customer-service sites to staff their new

units with volunteers from closing ACS and TPS sites, before using the

established redeployment process, since staff in those sites would already

have experience in resolving taxpayer account matters via the telephone.

At the same time, four service centers (Andover, Atlanta, Cincinnati, and

Philadelphia) were authorized to fill up to 30 percent of their new

customer-service positions with volunteers from ACS and TPS sites that

were closing in nearby districts (Boston, Atlanta, Cincinnati, and

Philadelphia). The Cincinnati Service Center requested this exception in

order to optimize the mix of experience needed to begin its new

customer-service operations.

Except for certain resources management employees, no other exceptions

were made to take advantage of service center employee experience.

Thus, the redeployment procedures did not give service centers a viable

opportunity to redirect experienced employees to related new or

redesigned jobs before seeking volunteers from unrelated jobs. The

Redeployment Understanding technically allows IRS to make directed

20Seniority is determined by an employee’s government service computation date, which generally

reflects all federal service.

21Redeployment-eligible employees generally included all career and career-conditional IRS employees

in (1) the National Office, regional offices, service centers, computing centers, and Austin Compliance

Center; (2) certain district office operations, including ACS and TPS locations; and (3) resources

management and information systems functions.

22Competition differs from lateral reassignment in that employees are competing for a promotion or a

higher career ladder giving them the potential for later advancement without further competition.

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reassignments before using the competitive process; however, using this

option was not practical because it required that directed assignments be

made in inverse seniority order from within the entire local commuting

area. This provision would mean that a center’s newest employee (and

least likely to have related experience) must be the first one directed to fill

a vacancy.

The redeployment of employees into new customer-service units

illustrates how these procedures limited IRS’ ability to reinvest experience.

IRS’ customer-service workload migration plans called for the phased

transfer of related work, workers, and funding, concurrently, from the

district and service center sites currently doing the work to the new

customer-service units. In that regard, IRS had directed 137 staff from

related areas into the customer-service prototype unit at the Fresno

Service Center before the Redeployment Understanding took effect.

However, staffing of subsequent customer-service vacancies at Fresno and

customer-service units established at other centers was subject to the

Redeployment Understanding.

In the service centers, related work includes that being handled through

correspondence by employees in the Adjustments, Taxpayer Relations,

and Collections branches. For example, employees in the Adjustments

Branch generally correspond with taxpayers to resolve account-related

problems and make necessary adjustments to taxpayer accounts using the

Integrated Data Retrieval System (IDRS). Employees in the

customer-service units being phased in at service centers generally do the

same type of work, except that they communicate with taxpayers

primarily by telephone rather than correspondence. Thus, experienced

Adjustments Branch employees might need training in telephone

techniques but would need little or no additional training in how to resolve

account-related problems or how to adjust accounts using IDRS.

However, employees redeployed by seniority or the competitive process

may come from areas such as the Processing Division, where they worked

as mail handlers, data transcribers, or in other jobs totally unrelated to the

kind of work they would be expected to do in the customer-service units.

These employees would require significant training not only in telephone

techniques but also in resolving account-related problems and using IDRS.

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Redeployment

Resulted in Increased

Training, Decreased

Productivity, and

Reduced Service to

Taxpayers

Even in a well-timed and properly targeted redeployment, some temporary

increase in training and decline in productivity and customer service can

be expected as an inherent consequence. At a minimum, the redeployment

of employees increases training requirements and decreases productivity

and service because neither the experienced employees serving as

instructors nor the trainees are actively contributing to the organization’s

business while they are involved in classroom training. Nor are they

contributing fully during on-the-job (OJT) training. Because of other

variables affecting productivity (such as new or increased workloads,

equipment failure, etc.), it is difficult to quantify the degree of productivity

decline specifically attributable to redeployment, much less the portion

that was inherent versus that which was avoidable. Nevertheless, we think

it is reasonable to assume that the redeployment procedures, by making

too many employees eligible for redeployment too soon and by limiting IRS’

ability to take full advantage of employees’ job experience, resulted in a

greater level of inexperience than might have otherwise been the case and

thus led to more training, less productivity, and less service to taxpayers.

Training Requirements

Increased

Although training requirements increased due to redeployment that

occurred in fiscal year 1994, they increased substantially in fiscal year 1995

due to the availability of several thousand additional compliance jobs

authorized that year. As stated earlier, IRS redeployed existing employees

to fill 4,325 (or 79 percent) of the 5,470 additional compliance jobs

authorized for fiscal year 1995. Because these jobs were filled by

redeployment-eligible employees whose vacated positions, such as those

in processing or customer service, also had to be filled and the persons

filling them had to be trained, training often occurred two or more times23

in order to fill one new job. Service center and district officials and

supervisors expressed concern about this increase in training

requirements.

For example, one service center official said that redeployment had a big

effect on training, and that training costs had increased over $240,000, or

34 percent, during the first 6 months of 1995 from the same period in 1994.

According to another center’s June 1995 assessment of its first year

redeployment results,

23Because the number of times an eligible employee could be redeployed was not limited until

December 1994, many employees were redeployed two or more times, further increasing training

requirements.

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“The Center expended 92,086 more training hours over the same period of time in [fiscal

year] 95 than [fiscal year] 94. Compliance Division accounted for 57,799 of these hours, due

to the hiring initiative, while [the] Processing Division accounted for an additional 31,040.”

According to data provided by the Center, the 92,086 additional hours was

an increase of 24 percent over the 377,442 hours used in fiscal year 1994.

A compliance division manager at a third service center said that his

division had exceeded its fiscal year 1995 training allotment by over 14,000

hours, or 62 percent.

Similarly, although fewer district employees were eligible for

redeployment than at service centers, an official at one district said that

because TPS and ACS work in that district could not be absorbed at sites in

other districts, vacancies had to be filled with new temporary and term

employees, which created concerns about quality and additional training

costs.

Many of the supervisors we interviewed also said that redeploying

experienced employees out of their units and/or inexperienced employees

into their units increased their training requirements. We interviewed 30

supervisors (hereafter referred to as “gaining supervisors”) who had,

altogether, received 346 redeployed employees and 24 supervisors

(hereafter referred to as “losing supervisors”) who had lost 412 employees

to other units.24 As shown in figure 2.1, 20 (83 percent) of the 24

supervisors who lost employees and 20 (67 percent) of the 30 supervisors

who gained employees said redeployment had increased training

requirements in their units.

24In general, gaining supervisors were selected from high-gain areas while losing supervisors were

selected from high-loss areas. However, each could have gained and lost employees, and some of the

412 employees lost by supervisors in our sample could have been among the 346 employees gained by

other supervisors in our sample.

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Figure 2.1: Supervisors’ Views on How

Redeployment Affected Their Units’

Training Requirements

Number of reporting supervisors

0

5

10

15

20

Increased Decreased Not affected Not applicable

20 20

0

1

9

3

1

0

Gaining supervisors

Losing supervisors

Source: GAO-structured interviews with 30 supervisors who gained and 24 supervisors who lost

redeployed employees.

According to many of the service center and district office officials and

supervisors we interviewed, the increased training requirements also

decreased the number of experienced employees on line—since these

employees are often used as training instructors—thus further eroding

unit productivity.

Productivity and Service to

Taxpayers Declined

We asked losing supervisors how the loss of employees through

redeployment affected their unit’s productivity in terms of volume,

accuracy, and timeliness. Their views varied. As shown in figure 2.2, of the

24 supervisors interviewed, 18 (75 percent) said that the volume of their

unit’s output decreased, 9 (38 percent) said that the accuracy of their

output decreased, and 9 (38 percent) said that the timeliness of their

output decreased. Conversely, 6 (25 percent), 15 (62 percent), and 15

(62 percent) of the managers said that their units’ volume, accuracy, and

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timeliness, respectively, either had not been affected by the redeployment

or had increased.

Figure 2.2: Losing Supervisors’ Views

on How Redeployment Affected Their

Units’ Productivity

Number of reporting supervisors

0

5

10

15

20

Increased Decreased Not affected Not applicable

1

3

2

18

9 9

5

12

13

0 0 0

Volume

Accuracy

Timeliness

Source: GAO-structured interviews with 24 losing supervisors.

The 30 gaining supervisors we interviewed also had mixed views on how

the redeployment process affected their unit’s productivity. As shown in

figure 2.3, decreased volume, accuracy, and timeliness were reported by 10

(33 percent), 7 (23 percent), and 11 (37 percent), respectively, of those

supervisors. Conversely, 16 (54 percent), 18 (60 percent), and 15

(50 percent) of them said their units’ volume, accuracy, and timeliness,

respectively, either had not been affected by the redeployment or had

increased.

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Figure 2.3: Gaining Supervisors’ Views

on How Redeployment Affected Their

Units’ Productivity

Number of reporting supervisors

0

5

10

15

20

Increased Decreased Not affected Not applicable

7

1 1

10

7

11

9

17

14

4

5

4

Volume

Accuracy

Timeliness

Source: GAO-structured interviews with 30 gaining supervisors.

Moreover, 4 of 16 gaining supervisors and 11 of 20 losing supervisors

whose units normally used overtime said redeployment had increased

their use of overtime. Similarly, 4 of 16 gaining supervisors and 8 of 18

losing supervisors whose units normally used temporary details from

other units said that their use of details had also increased due to

redeployment.

We also asked supervisors whose employees were redeployed how this

loss affected their unit’s service to taxpayers. Of the 24 supervisors, 10

(42 percent) said the loss of employees degraded their service to

taxpayers. The degraded services mentioned most often included

(1) taking longer to answer telephone calls and correspondence from

taxpayers, (2) increases in the number of calls waiting and abandoned, and

(3) growing backlogs of cases to be processed.

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Service center and district officials we interviewed also mentioned that

productivity and taxpayer service had declined with the erosion of unit

experience. For example:

• A customer-service branch chief at one center said that the branch was

answering only 83 percent of its scheduled calls in June 1995, due to

inexperienced employees and their requirement for training time, which

had not been considered in developing the work schedule.

• A collections branch chief said that all the movement of employees

associated with redeployment had reduced the branch’s timeliness in

answering correspondence. In June 1995, the branch’s cumulative rate was

8.4 days over the 21-day standard. And, in some peak months, the rate rose

as high as 40.1 days.

Officials made similar comments in unit self-assessment reports of

redeployment results. For example, one district’s June 1995 assessment of

its first-year redeployment results, said that

“Redeployment losses have had a major impact on the Problem Resolution Program [PRP].

It is well known that PRP caseworkers do not become truly efficient for 2 - 3 years; the

training curve is slow because of the difficulties of the cases. Many of the more

experienced caseworkers were the first to be selected as compliance hires. Even though

we replenish the staff, they continue to apply for redeployment positions. The result in

Taxpayer Service was a reduction in PRP productivity in 1995 from .5 [cases] per hour (one

of the highest rates in the country) to .2 [cases] per hour.”

The most significant productivity declines may have been experienced

within the service center processing divisions. Two internal IRS studies

confirmed that the processing divisions lost productivity because

employees who were experienced in processing returns were redeployed

to compliance and customer-service jobs and replaced by inexperienced

employees who were either newly hired or reassigned from other

functional areas.25

25Consistent with this finding, in our report on the 1995 filing season (The 1995 Tax Filing Season: IRS

Performance Indicators Provide Incomplete Information About Some Problems, GAO/GGD-96-48,

Dec. 29, 1995), we noted declines in some of the indicators IRS uses to track the performance of its

service centers in processing individual income tax returns. For example, the accuracy of returns

processed by data transcribers declined from 95.84 percent in 1994 to 93.93 percent in 1995, and the

average number of days it took the centers to process individual income tax returns declined from a

range of 5 to 7 days in 1994 to a range of 5 to 9 days in 1995.

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According to a 1995 IRS study of service center productivity, redeployment

hurt service center productivity by “encouraging [permanent] pipeline

employees to transfer out of the Processing Division.”26

According to the study, as illustrated in figure 2.4, the percentages of

permanent employees transferring out of returns processing jobs in the

1995 filing season increased substantially from the prior filing season at 8

of the 10 service centers, and the increases were much larger at centers

that have not been designated to continue as processing centers.

26Permanent employees are those appointed to career or career-conditional status and can include

employees with seasonal and nonseasonal work schedules. Unlike term or temporary employees,

permanent employees do not have specified limits on their employment with IRS.

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Figure 2.4: Permanent Employee Transfer Rates at Submission and Nonsubmission Processing Centers

0

5

10

15

20

25

8.6 8

5.3

4.1

10.1

1

1.9

2.6

7.4

6.1 5.6

14.6

15.4

18.8

21

4.1

8 7.8 8.4

10.5

Nonsubmission processing centers Submission processing centers

Types of service centers

1994

1995

Percentange of employees transferring

Andover

Atlanta

Philadelphia

Fresno

Brookhaven

Memphis

Austin

Cincinnati

Kansas City

Ogden

Source: IRS Analysis and Studies Division memorandum on the impact of personnel policies on

service center pipeline productivity, April 17, 1995.

The study also said that new processing employees were significantly less

productive than experienced employees. It estimated that employees in

their second filing season were 20 percent more productive than in their

first.

According to a November 1995 IRS internal audit report,27

27National Office Oversight Provided to the Service Centers During the 1995 Filing Season, Nov. 14,

1995 (reference no. 060702).

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“During the 1995 filing season, processing functions in the service centers expended

40 percent more overtime hours than during 1994. In addition, the time expended by

employees who were detailed-in from non-processing jobs increased by 19 percent in

1995.”

Internal Audit attributed the above results, in part, to an inexperienced

workforce.28 According to the report,

“. . . Processing functions nationwide suffered a significant experience drain prior to the

beginning of the 1995 filing season. Management indicated that between 1400 and 1800

employees had been moved from Processing Divisions to fill Customer Service and

Compliance jobs . . .”

The report explained that redeployed or newly hired replacements could

not perform some processing steps at rates used to schedule the work.

IRS and NTEU Made

Some Changes to

Reduce Experience

Loss

Before the Redeployment Understanding was terminated, IRS and NTEU had

taken some actions designed to minimize the loss of employee experience

during the transition to the new business vision. IRS and NTEU had also

been discussing (1) whether to migrate related work, workers, and funding

together into the new customer-service environment, and (2) the need to

curtail personnel turnover and the resulting erosion of experience and

productivity. According to a National Office official, as of June 1996, IRS

was also validating skill assessment tools that it hoped to use in the

redeployment process.

In October 1994, the Redeployment Resolution Council withdrew the

designation of resources management employees in grades GS-9 and

above at host sites29 as redeployment eligible. Although the Council

decided not to withdraw the designation of employees who were

occupying positions that would, over time, be transformed into the new

customer-service positions, it did restrict the lateral movement of

employees out of these new positions after they had used their

redeployment eligibility to move into them.

In the meantime, the Council authorized district offices to staff their

continuing customer-service sites with volunteers from closing ACS and TPS

28Other contributing factors cited by Internal Audit included an increase in the number of individual

tax returns that had to be processed at the centers, mostly due to a shift from electronic returns to

paper returns, and the need to manually transcribe data from forms 1040EZ because automated

scanning systems were unable to process the scheduled volume of those returns.

29Resources management host sites are those that will serve multiple IRS locations.

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sites before using normal redeployment procedures. Similarly, as

discussed earlier, the Council authorized four service centers to fill up to

30 percent of their new customer-service positions with volunteers from

ACS and TPS sites that were closing in nearby districts instead of using

normal redeployment procedures. Although only on a voluntary basis,

these exceptions to the established redeployment process helped to

minimize the loss of ACS and TPS employees who were experienced in

performing customer-service functions.

In April 1995, IRS customer-service officials were planning to request an

exception to the redeployment process that would have allowed the

phased migration of related work, workers, and funding, concurrently, into

customer service, in accordance with customer-service workload

migration plans. According to IRS officials, this exception request was

never formally sent to the Redeployment Resolution Council. Instead,

officials said the matter was informally discussed among IRS and NTEU

council members. We were told in February 1996 that IRS and NTEU were

still working informally on how best to deal with excessive turnover and

experience loss IRS-wide, resulting from procedures specified in the

Redeployment Understanding.

Conclusions Although it seems reasonable to expect some operational inefficiencies as

an inherent part of any redeployment process, those inefficiencies were

exacerbated at IRS, in our opinion, by redeployment procedures that made

employees eligible for redeployment too soon and prevented IRS from

redirecting employees to new jobs on the basis of their related work

experiences. Redeployment occurred long before the expected large-scale

displacement of employees associated with the implementation of planned

modernization projects and consolidation efforts. Consequently, many of

the jobs vacated by redeployed employees had to be filled again by newly

hired employees. Thus, IRS’ first redeployment experience came too early

to be very effective in achieving the goal of redeployment—which is to

move employees out of jobs that would not be needed in the new

environment and into jobs that would. Because employees experienced in

certain areas were often redeployed to areas requiring very different skills

and were, in turn, replaced by inexperienced staff, IRS lost valuable

experience and in some instances incurred training cost twice, especially

at its service centers.

Before the Redeployment Understanding was terminated, IRS and NTEU had

worked together to resolve a number of problems, but they had not yet

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agreed on using current job experience in making redeployment decisions.

Unless future redeployments are structured in a way that allows IRS to

redirect current employee experience and skills to jobs in the new

environment, considerable experience could be lost during the transition,

bringing about further increases in training costs and declines in

productivity and customer service. For that same reason, it is also

important that future redeployment be timed to coincide more closely

with the implementation of modernization projects and consolidation

efforts to better ensure that experienced employees are not vacating jobs

long before those jobs are eliminated.

Recommendation to

the Commissioner of

Internal Revenue

We recommend that the Commissioner of Internal Revenue—should

future redeployment procedures be developed—address the problems

identified in this report, including

• limiting redeployment eligibility to employees whose current jobs have

been or are about to be substantially altered or eliminated, so that

redeployment of employees is timed closely with the implementation of

modernization projects or consolidation efforts and

• allowing IRS to redirect employees who are currently and successfully

performing existing jobs to redesigned jobs that are substantially the same

before seeking volunteers from unrelated functions (similar to the

exceptions made for district ACS and TPS employees).

Agency Comments

and Our Evaluation

We requested comments on a draft of this report from the Commissioner

of Internal Revenue and the National President of NTEU, or their designees.

We received written comments from IRS’ Chief, Management and

Administration, on September 11, 1996, and from NTEU’s National President

on September 17, 1996. The written comments from IRS and NTEU are

reprinted as appendixes V and VI, respectively. We also met with both

parties, separately, on September 13, 1996, to discuss their comments.

While agreeing that future redeployments should be better targeted and

timed, IRS said that our discussion of the timing of past redeployments

oversimplified the issue. According to IRS, it did, in retrospect, allow

reassignments to occur too soon but that the result would have been

different if IRS’ modernization plans had proceeded on the schedule

envisioned when the Redeployment Understanding was signed. We do not

agree. We considered IRS’ modernization plans and schedules in making

our assessment, and we cited specific examples in our report where

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reassignments occurred well before sites were to be closed or

implementation of a new system was to begin. IRS did not provide any

information to contradict the scheduling information cited in our report

and noted in its comments that the information in our report was generally

factual.

IRS also commented on the relationship between redeployment and the

hiring initiative, under which Congress authorized thousands of new

compliance and customer-service positions. According to IRS, that

initiative provided an opportunity to redeploy many employees who were

in noncontinuing positions and that if it “had not used these new positions

for redeployment, and instead filled them with external hires, the number

of employees still occupying non-continuing positions when the transition

was scheduled to occur would have been much larger.”

We recognize that the timing of the hiring initiative was partly responsible

for increased training requirements and reduced productivity, since over

4,000 additional jobs were made available to redeployment-eligible

employees in fiscal year 1995—well before large-scale employee

displacement was expected. Nevertheless, we still believe that IRS would

have experienced less disruption in fiscal years 1994 and 1995 had

redeployment procedures focused on finding new jobs for employees as

their displacement became imminent and allowed IRS to redeploy

employees with related experience before those without such experience.

More importantly, we believe that the lessons learned from IRS’ early

redeployment experience will help it establish procedures aimed at

minimizing disruption in the future, when there is no guarantee of

additional hiring initiatives.

In its comments on our draft report, NTEU said that the report is “flawed in

its design, particularly with regard to its first stated objective, and that it

fails to present any data to support the majority of the conclusions that are

reached.” As an example, NTEU cited our conclusion that the redeployment

procedures led to premature reassignments and operational inefficiencies.

We disagree. Our conclusion about premature reassignments was based on

an analysis of staffing and reassignment data for IRS service centers and for

ACS and TPS sites; discussions with IRS officials and with service center and

district office supervisors who lost redeployed employees; and reviews of

IRS’ modernization and site closure plans. In our opinion, the results of that

work, which are discussed on pages 16 to 21, provide a sufficient basis for

concluding that the redeployment procedures led to premature

reassignments. We reached our conclusion about operational

Page 33 GAO/GGD-97-24 IRS’ Redeployment Experiences
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inefficiencies after interviewing officials and supervisors in many of the

affected organizational units and reviewing various documentation

including several internal IRS reports and studies. Again, we believe that

the results of our work, which are discussed on pages 21 to 30, provide

sufficient data to support our conclusion.

NTEU also said that to draw such a conclusion we would need to present

some comparative analysis of the operational impact of the Redeployment

Understanding versus some alternative selection procedure, such as the

traditional competitive selection process. We did not intend to suggest in

our report that IRS should have used the traditional competitive process in

lieu of the redeployment procedures. That process, like the lateral

redeployment process, can also result in the selection of employees

without related experience, since a key factor in ranking employees is the

appraised performance in their current jobs, which may not be related to

the jobs being filled. Conversely, we also did not intend to suggest that IRS

should be precluded from using competitive procedures in filling its new

jobs. Such procedures would have to be used when redeploying employees

to new jobs having higher career ladders than their current jobs. They

might also have to be used when the number of employees with related

experience or skills is less than the number of new positions.

What we are suggesting is that the redeployment should have been more

focused and better timed. While we acknowledge in the report that some

operational inefficiencies can be expected with any redeployment process,

we believe that the process would have been more efficient if the

procedures were structured to (1) allow management to give priority to

employees occupying positions that were closely related to the types of

positions being filled and (2) time employee eligibility more closely to the

dissolution of their jobs. We did not do a comparison of the operational

impact of the Redeployment Understanding versus a redesigned

redeployment that would have been more focused and better timed

because it would have been highly speculative on our part to have

attempted to quantify what the results would have been if IRS had used

different redeployment procedures. Nevertheless, we think it is reasonable

to assume that the Redeployment Understanding, by making too many

employees eligible for redeployment too soon and by limiting IRS’ abililty

to take full advantage of employees’ job experience, resulted in a greater

level of inexperience than might have otherwise been the case and thus

led to more training, less productivity, and less service to taxpayers.

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NTEU suggested that our conclusions were based on an “erroneous

assumption that the IRS could have simply reassigned, either voluntarily or

involuntarily, its most qualified and most experienced employees” into the

new compliance and customer-service jobs “without any further

consideration and without any negative impact on processing division

productivity.” NTEU said that such an assumption was incorrect because

(1) involuntary reassignment has a “negative impact on employee morale,

overall performance, and productivity;” (2) the requirement that an

employee cannot be noncompetitively reassigned to a position having a

higher career ladder than that of the employee’s current position greatly

reduces the field of eligible employees outside of the processing division;

and (3) we apparently assumed that IRS would not have had to backfill any

of the vacancies created by filling the new compliance and

customer-service jobs with employees who had related experience.

We did not assume that IRS could reassign its most qualified and

experienced employees without any negative impact on productivity. To

the contrary, as noted earlier, we believe that some decrease in

productivity can be expected even with a well-timed and properly targeted

redeployment. We did not attempt to assess the relative effects of

voluntary and involuntary reassignment on employee morale,

performance, or productivity nor are we implying that all reassignments

should be done on an involuntary basis. Under the procedures envisioned

by our recommendation, IRS could try the voluntary process before using

the involuntary process or the normal competitive process. If it became

necessary to use the competitive process to fill certain jobs, IRS could

narrow the areas of consideration to certain groups of employees (e.g.,

those within the local commuting area, those in immediate jeopardy of

losing their jobs, or those with current and directly related experience or

skills). In addition to minimum qualification requirements, IRS could also

apply selective ranking factors requiring directly related experience. By

contrast, the Redeployment Understanding required IRS to fill a new job

with the most senior volunteer for lateral assignment, even if that

volunteer had no related experience or skills. Thus, IRS was precluded

from selecting a less-senior volunteer who had related experience or skills.

We agree with NTEU that the number of employees eligible for lateral

redeployment might not have been enough to fill all of the new compliance

and customer-service jobs without some impact on the processing

division. However, we believe that the impact would have been minimized

if procedures had (1) made employees eligible for redeployment only

when the event that was to displace them became a near-term reality and

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(2) allowed IRS, in filling jobs laterally, to give preference to employees

who were in immediate jeopardy of being displaced from their current

positions and who had related experience. If additional positions remained

to be filled, we agree that IRS might have had to select some processing

division employees.

We did not assume that no vacated position would have to be backfilled.

However, although the redeployment of employees with related

experience before those without such experience could still require filling

some of the jobs vacated by the experienced employees, we believe that

the need to do this could be less, using the kind of procedures suggested in

our recommendation. For example, those procedures would allow the

concurrent and phased migration of customer-service-related work and

workers as planned by IRS and as done in initially staffing the

customer-service prototype at the Fresno Service Center. Thus, IRS would

be transferring positions rather than creating vacancies.

In summary, we are not suggesting that IRS should be precluded from

staffing any new jobs using employees whose jobs are not in jeopardy or

who are not the most experienced. What we are saying is that

redeployment procedures should apply to employees who are expected to

be displaced by the imminent implementation of modernization projects or

reorganization efforts. They should also be structured to give preference

to employees whose jobs are in immediate jeopardy and to those who

have experience related to the jobs being filled. Instead, the procedures

adopted by IRS and NTEU made virtually all service center employees

eligible for redeployment, without regard to when their jobs were to be

eliminated or redesigned and required IRS to fill new jobs at the same

grade, using the most senior volunteers from both related and unrelated

areas throughout the center before using other options, such as directed

reassignments.

Our responses to other comments made by IRS and NTEU can be found in

appendixes V and VI.

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Redeployed Employee Job Satisfaction and

Initial Performance Results Were

Encouraging

To obtain some input on redeployment from those most affected and to

identify other issues that might warrant IRS’ attention in future

redeployments, we interviewed some redeployed employees and some of

their new supervisors.30 Those interviews identified some concerns

relating to such things as training and the amount of redeployment

information provided to employees; but they also indicated that employees

were generally satisfied with their new jobs, and supervisors were

generally satisfied with their new employees. While there is room for

improvement, as evidenced by the interviews and the declining

productivity discussed in chapter 2, the reactions of employees and

supervisors were encouraging.

Most Redeployed

Employees Were

Meeting Performance

Standards and Were

Satisfied With Their

New Jobs

Of the 30 supervisors we interviewed, the great majority were either very

satisfied (11) or generally satisfied (15) with their new employees. The

supervisors also said that 92 percent (or 320) of their 346 new employees

were meeting established standards for a “fully successful” level of

performance—the minimum acceptable level for performance appraisal

purposes. While we recognize the limitations associated with

self-reporting, we also asked employees about their performance. Of the

177 employees we interviewed who had received feedback, 155

(88 percent) said that they were performing at or above the “fully

successful” level.31

Some of the 22 employees we interviewed who said they were performing

below the fully successful level offered suggestions on what would help

them improve their performance. The most frequently cited suggestions

were

• more job knowledge, skills, or experience;

• more or better training; and

• consistent guidance and/or more feedback from their supervisors or

managers.

Some employees who were unable to perform successfully in their new

positions had returned to their former positions. In one district, an official

we interviewed who coordinated the redeployment at that site told us that

12 (8 percent) of 150 employees were reinstated in their old jobs after

“failing to make the transition” to their new jobs. And, at least at that site,

30We interviewed 188 employees who had been redeployed and 30 managers who supervised a total of

346 employees who had been redeployed.

31Eleven of the 188 had not received feedback on their performance and thus could not characterize it.

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employees who returned to their old jobs were redesignated as eligible for

redeployment. Some of the supervisors included in our sample said that

employees who are unable to meet performance standards will be

reassigned to other positions. At some sites, employees may be given an

“opportunity period” of 1 year to improve their performance, at which time

they may be reassigned.

Of the 188 employees we interviewed, 70 percent (131 employees) were

satisfied with their new jobs, as shown in figure 3.1. Commonly mentioned

reasons for this satisfaction included (1) the type of work or the work

environment, (2) the challenging or interesting nature of the work, and

(3) the sense of teamwork among coworkers and managers in their new

units.

The reasons most frequently cited by the 17 percent (32 employees) who

were dissatisfied included (1)inadequate training; (2) unrealistic

productivity expectations, especially for employees with little or no

related experience; and (3) stress and fatigue from the length of time spent

on the telephone or at a computer terminal.

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Figure 3.1: Redeployed Employees’

Job Satisfaction

70% • Satisfied

•13%

As satisfied as dissatisfied

•17%

Dissatisfied

Source: GAO interviews of 188 redeployed employees.

Some Employees,

Especially Those Who

Lacked Related

Experience, Required

Additional Training

As discussed in chapter 2, IRS field officials indicated that redeployment

had increased their training requirements. The impact on training was also

evident from our interviews of redeployed employees and the supervisors

who gained redeployed employees.

Nearly a fifth of the redeployed employees we interviewed required more

training than that which is normally provided for their positions. Many of

these employees lacked related experience. Furthermore, although the

Redeployment Understanding authorized only one additional training

opportunity for employees who are not successful the first time, some

supervisors said that they were told to allow as many training

opportunities or as much time as necessary.

Almost all of the redeployed employees included in our sample received

classroom and/or OJT training.32 However, many of them either had their

formal training period extended or had to repeat some or all of the training

32OJT is a period of formal instruction whereby employees begin performing the duties required of the

job but with an instructor’s supervision.

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segments. In that regard, 32 (17 percent) of the employees we interviewed

said they received additional training. Similarly, the gaining supervisors we

interviewed said that 47 (14 percent) of their redeployed employees

required additional training. According to a report by IRS headquarters

officials after visiting one district office,33 6 of 25 redeployed employees

training to be revenue agents in that district failed the 12-week second

phase of OJT twice. The six employees were either returned to their former

positions or transferred to other compliance jobs. A supervisor we

interviewed at another site said that she had an employee who had been

on OJT for almost 1 year, and that, before redeployment, he probably would

not have been allowed more than 6 months of OJT. The supervisor was told

that since the employee was obtained through redeployment, he would

continue OJT “indefinitely.”

Employees without related experience often required the most training.

For example, employees at one service center who were training for the

customer-service representative position were divided into three groups

on the basis of their knowledge of tax law and the computer system used

to adjust taxpayer accounts (i.e., IDRS). The group with the least amount of

knowledge required almost twice as much training as the group with the

most knowledge. At another service center, where employees were trained

together to minimize costs, officials told us they saw a correlation between

related or unrelated experience and performance in training. For example,

according to training records, employees redeployed from unrelated areas,

who comprised about half of the class, failed tests more than twice as

often as employees redeployed from related areas. Additionally, more than

half of the employees from unrelated areas were still receiving OJT nearly 4

months after completion of classroom training, while those from related

areas had completed their OJT in as little as 1 month and, in no case, more

than 3 months.

Of the 30 gaining supervisors included in our sample, 18 said that previous

experience was a factor in the amount of training needed by new

employees. One supervisor said that three of his four redeployed

employees were receiving almost twice as much OJT as they would have if

they had the related experience needed to perform the work.

Some employees also needed training in basic skills to be able to perform

their new jobs. Of 184 employees who responded to our question, 54

(29 percent) said that they needed skills training in areas such as math,

33IRS headquarters officials provided reports of their visits to one service center and 10 districts made

between April and June 1995 to assess the progress of redeployment.

Page 40 GAO/GGD-97-24 IRS’ Redeployment Experiences
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Encouraging

language, or communications to perform successfully in their new

positions. Of the 54 employees, 46 said that they received at least some of

the needed skills training. According to an IRS report on the results of a site

visit, “Some of our employees don’t have the basic skills needed to be

successful in these new positions, and we can’t underestimate the

magnitude of the training investment need[ed] to support the transition.”

Also, selection standards were sometimes relaxed. For example, according

to one district’s June 1995 assessment of its first-year redeployment

results,

“The requirement to select low-ranking redeployment eligibles from competitive

certificates has had a negative impact on the Compliance functions as well as several

employees. . . . Many of the employees would not have been selected under normal

circumstances because of mediocre evaluations, or marginal interviews. This mandatory

selection created ’false hopes’ for the employees—setting them up to fail. These mandatory

selections have resulted in several class failures, exorbitant training expenditures, [and]

disgruntled employees who have had to return to ACS and TPS.”

Many Employees

Found Redeployment

Assistance,

Information, and

Training Inadequate

We asked employees to rate the adequacy of various aspects of the

redeployment process including (1) the assistance—such as career

counseling, skill assessments, and job placement services—IRS provided in

helping them find new positions; (2) the information IRS provided to

explain the redeployment process; and (3) training—both classroom and

OJT. Of the 188 employees we interviewed, 95 said that they experienced

problems in at least one of those areas.

As shown in table 3.1, 44 of the 187 employees (24 percent) who

responded to our question found the redeployment assistance inadequate,

while 51 employees (27 percent) said they had no basis to comment on the

adequacy of the assistance because they did not receive assistance. Of the

76 employees who cited specific inadequacies,34 most said they needed

help in understanding the redeployment process, accessing job

announcements, determining the qualifications required for jobs, and

researching their available options.

34Thirty-three employees cited inadequacies even though they did not characterize redeployment

assistance as inadequate. Conversely, one employee who characterized assistance as inadequate did

not provide a reason.

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Table 3.1: Redeployed Employees’ Opinions on the Adequacy of Redeployment Assistance, Information, and Training

Assistance Information Class training OJT

Opinion

Number of

respondents

Percentage

of total

Number of

respondents

Percentage

of total

Number of

respondents

Percentage

of total

Number of

respondents

Percentage

of total

Adequate 63 34 104 57 113 60 111 59

As adequate as

inadequate 29 16 35 19 29 15 24 13

Inadequate 44 24 36 20 29 15 31 16

No basis to judge 51 27 8 4 17 9 22 12

Total 187 100a 183 100 188 100a 188 100

aPercentages do not total to 100 because of rounding.

Source: GAO interviews of redeployed employees.

Of the 183 employees who responded to our question on the adequacy of

redeployment information, 36 (20 percent) considered it inadequate. Of

those who gave reasons, almost all said that IRS did not explain the

redeployment process well enough for them to fully understand it.

Employees wanted to know the policies and procedures so they could

better determine what their options were.

The third aspect of redeployment that many employees found inadequate

was the quality of training. For example, 31 of 188 employees (16 percent)

said that OJT was inadequate. The most frequently mentioned reasons were

• OJT instructors lacked either sufficient subject knowledge or the

communication skills to be able to teach the practical application of the

classroom instruction and

• too many employees were assigned to each instructor for employees to

receive adequate attention to individual needs.

Although such complaints may not be unique to a redeployment situation,

we believe that they may have been partly the result of overextending

training resources to respond to the increase in training requirements

discussed in chapter 2.

A slightly lower percentage of employees—29 of 188 (15 percent)—found

classroom training inadequate. The most frequently mentioned reasons

were that

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Initial Performance Results Were

Encouraging

• the amount of time allotted for classroom training was insufficient,

particularly for those with little or no related experience and

• the subject coverage was inadequate or the training lacked a “hands-on”

component for the related computer systems.

Many Supervisors

Were Also Dissatisfied

With the

Redeployment

Process

As table 3.2 shows, 13 of the 30 gaining supervisors and 9 of the 24 losing

supervisors said that they were dissatisfied with the way IRS handled the

redeployment process.

Table 3.2: Gaining and Losing

Supervisors’ Opinions of How IRS

Handled the Redeployment Process

Gaining Supervisors Losing Supervisors

Opinion

Number of

respondents

Percentage of

respondents

Number of

respondents

Percentage of

respondents

Satisfied 11 37 5 21

Neither satisfied nor

dissatisfied 5 17 9 38

Dissatisfied 13 43 9 38

No basis to judge 1 3 1 4

Total 30 100 24 100a

aDoes not total to 100 percent because of rounding.

Source: GAO interviews of gaining and losing supervisors.

The gaining supervisors most frequently cited the following reasons for

their dissatisfaction with the redeployment process:

• redeployment allowed movement by seniority (the amount of time the

employee had been with the federal government) rather than by work

experience, and thus some of the employees redeployed were unqualified

for the positions and

• redeployment resulted in too much personnel turnover.

The reasons cited by losing supervisors were similar to those cited by the

gaining supervisors. They said that

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Initial Performance Results Were

Encouraging

• their units received inexperienced employees through redeployment;

• they lost experienced employees; and

• communication between IRS management and employees was poor.

Conclusions Overall, the results of our interviews of redeployed employees and their

supervisors suggested that many employees can be successfully

redeployed to meet new job requirements. While it may take some time for

redeployed employees to become fully productive in their new jobs, the

vast majority of the redeployed employees included in our sample, and

many more who were represented by the supervisors we interviewed,

were reportedly meeting new job performance standards for their

experience levels, although some needed supplemental training.

Our results also suggested some dissatisfaction with the information,

assistance, and training provided as part of the redeployment process to

better prepare employees for jobs in the modernized environment.

Although most redeployed employees were satisfied with their new jobs,

many were dissatisfied with the quality and availability of redeployment

information, assistance, and training. These employees said that they

needed a more consistent, thorough, and understandable explanation of

the redeployment process and how and when their jobs would be affected.

They also said that they needed (1) information on available assistance,

training, and job vacancies; (2) job placement assistance, including help in

determining the qualifications required by the new jobs; and (3) more and

better qualified OJT instructors.

Recommendation to

the Commissioner of

Internal Revenue

We recommend that, as a part of managing any future redeployment effort,

the Commissioner of Internal Revenue consider ways to improve

management communications with employees concerning redeployment

assistance, information, and training. In doing so, IRS might ask itself such

things as whether it is providing information that clearly explains

(1) redeployment policies and procedures; (2) which jobs are expected to

be eliminated, continued, and redesigned and when; and (3) the nature and

extent of available redeployment assistance.

Agency Comments

and Our Evaluation

We requested comments on a draft of this report from the Commissioner

of Internal Revenue and the National President of NTEU, or their designees.

We received written comments from IRS’ Chief, Management and

Administration, on September 11, 1996, and NTEU’s National President on

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Redeployed Employee Job Satisfaction and

Initial Performance Results Were

Encouraging

September 17, 1996. We also met with both parties, separately, on

September 13, 1996, to discuss their comments. Neither party raised any

objection to our recommendation or to the factual content of this chapter.

Page 45 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix I 

IRS Staffing in January 1994 and January

1996

Table I.1: IRS Staffing in January 1994

and January 1996

Appointment type

Staffing as

of 01/94

Staffing as

of 01/96

Career and career conditional/nonseasonal 100,558 99,164

Career and career conditional/seasonal 24,261 21,634

Term/nonseasonal 506 612

Term/seasonal 2,318 2,401

Temporary/nonseasonal 2,949 2,465

Temporary/seasonal 230 168

Totals 130,822 126,444

Source: GAO analysis of IRS staffing data.

Page 46 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix II 

Overview of IRS’ Redeployment Planning

In July 1994, we reported that the fundamental human resource planning

tasks facing IRS included

• identifying its workforce requirements—the number of workers, types of

positions, and skills needed to operate in the new environment;

• assessing the knowledge, skills, and abilities of its existing workforce;

• determining the gap between existing workforce capabilities and those

required for the new environment; and

• developing detailed recruiting, training, retraining, and redeployment

plans to meet projected workforce requirements while providing

continued employment for its current workforce.35

IRS has taken several steps toward satisfying those recommendations and

related ones made in earlier reports by us and the National Research

Council. Specifically, IRS developed independent models that produced

initial estimates of future workforce requirements for key functions such

as customer service, submission processing, and resources management

support services. The outputs from the various workforce requirements

models then became inputs for a redeployment model, which compared

these estimated workforce requirements to the estimated supply of

workers (i.e., the existing workforce, adjusted for expected attrition), by

site, job series, and grade for fiscal years 1995 through 2001.

Outputs from the redeployment model were then used as the starting

points for site-specific redeployment plans, which were approved in

October 1994. These plans had to be consistent with redeployment policies

and procedures established by IRS and NTEU.

According to IRS officials, the workforce requirements models and the

redeployment model will be refined and reused periodically to keep

human resource plans in sync with modernization plans and schedules.

In November 1995, according to the IRS official in charge of the Business

and Employees Competency Reengineering Project, IRS acquired

off-the-shelf skill assessment tools for eight core jobs.36 In June 1996, the

same official said that IRS had completed the testing needed to confirm the

validity of these tools in assessing the skills and other competencies

needed to effectively perform the eight core jobs and was awaiting test

35GAO/GGD-94-159.

36According to the IRS official, the eight core jobs are revenue agent, revenue officer, tax auditor,

customer-service representative, taxpayer service representative, ACS tax examiner, service center

collection tax examiner, and nonpipeline tax examiner.

Page 47 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix II 

Overview of IRS’ Redeployment Planning

results. After some experience using these tools to identify training needs

for individuals redeployed to core jobs, and provided that NTEU concurs,

IRS intends to use skill assessment results to help select individuals for

redeployment to the core jobs. Because many returns processing

employees whose jobs will no longer be needed are lower-graded clerical

employees who lack basic communication or math skills, such tools could

prove useful in determining training needs and making redeployment

selections.

Page 48 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix III 

Information on How We Selected the IRS

Sites We Visited and the Employees and

Supervisors We Interviewed

To do this study, we visited IRS service centers in Atlanta, Brookhaven,

Cincinnati, and Fresno and district offices in Atlanta, Baltimore,

Cincinnati, and San Francisco. At those locations, we administered

structured interviews to a total of 188 employees who had been

redeployed to new jobs, 30 supervisors who had gained a total of 346

redeployed employees, and 24 supervisors who had lost a total of 412

redeployed employees.

We selected the Atlanta and Fresno service centers because IRS had

estimated that each would lose nearly 3,000 jobs as their

returns-processing functions were phased out. Fresno was also a

prototype customer-service center and the first operational

customer-service units were established there in January 1994. We

selected the Brookhaven and Cincinnati service centers because initial

customer-service units were rolled out at these sites in the fall of 1994.

We selected the Atlanta, Cincinnati, and San Francisco district offices

because their TPS and ACS call sites were scheduled to be phased out in

conjunction with the planned consolidation of customer-service locations.

We selected the Baltimore District Office because it had been designated

as a continuing customer-service site. Furthermore, unlike the Atlanta,

Cincinnati, and San Francisco areas, which were designated as host sites

for resources management support services, the Baltimore area was

designated as a client site for such services. This meant that resources

management positions in Baltimore were being eliminated.

In the absence of a centralized IRS database that identified the universe of

redeployed employees, we worked with IRS to develop, for each of the

eight locations, a database of employees who were reassigned between

November 1993 (the date of the Redeployment Understanding) and

April 1995. Temporary reassignments were not included in the databases.

For sampling purposes, we selected employees who changed their job

series and/or work unit. From these databases, we judgmentally selected a

cross section of redeployed employees to interview, considering such

factors as their previous functional area experience and grade level.

We used April 30, 1995, as the cutoff point to help ensure that the

redeployed employees would have had several months to adjust to their

new jobs by the time our structured interviews were administered. We

administered those interviews from August through December 1995.

Subsequent analysis showed that the 188 employees had been in their new

jobs from about 4 to 22 months, and, on average, about 11 months.

Page 49 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix III 

Information on How We Selected the IRS

Sites We Visited and the Employees and

Supervisors We Interviewed

As agreed with IRS, for the service centers we visited, we selected

employees reassigned to compliance functions as tax examiners and

correspondence examiners and to customer-service units as tax

examiners. For the district offices, we selected employees reassigned as

revenue agents, revenue officers, tax auditors, and tax examiners. In

addition, we administered structured interviews to a few employees who

were redeployed to various types of jobs in newly established District

Office Research and Analysis units.37

The results of our employee interviews are not projectable because

statistical sampling methods were not used. We judgmentally selected

samples because, among other things, (1) a centralized universe of

redeployed employees was not available when we began our work and

(2) the use of statistical sampling methods would have required

considerably more audit time and resources, with the results only

projectable on a site-by-site basis.

In selecting supervisors to interview, we generally attempted to (1) select

gaining supervisors who had received at least one of the employees

included in our sample of redeployed employees and (2) select losing

supervisors who were in the functional areas at each location that had lost

the greatest number of redeployed employees.

Table III.1 shows the numbers and types of structured interviews done at

each site.

37District Office Research and Analysis units are to help IRS’ National Office of Research and Analysis

identify ways to improve compliance for segments of taxpayers that share certain characteristics or

behaviors.

Page 50 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix III 

Information on How We Selected the IRS

Sites We Visited and the Employees and

Supervisors We Interviewed

Table III.1: Structured Interviews by

Site Number of interviews

Site

Redeployed

employees

Supervisors

who gained

redeployed

employees

Supervisors who

lost redeployed

employees

Atlanta District 25 5 5

Atlanta Service Center 25 5 5

Baltimore Districta 17 4 b

Brookhaven Service Center 25 5 5

Cincinnati District 23 c c

Cincinnati Service Center 23 c c

San Francisco District 25 5 4

Fresno Service Center 25 6 5

Total 188 30 24

aFewer employee interviews were needed at Baltimore because generally only its resources

management and information systems employees were eligible for redeployment.

bWe did not interview any losing supervisors because (1) we diverted staff to complete work at

Brookhaven after we closed our New York Field Office and (2) we did not expect the relocation of

resources management and information systems employees to have a direct effect on either the

customer service or compliance function.

cWe were unable to complete the planned interviews at both Cincinnati locations because of the

closure of our Cincinnati Field Office.

Page 51 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix IV 

Changes in Staffing at Service Center

Processing Divisions

Table IV.1: Changes in Processing Division Staffing Between January 1994 and December 1994

Appointment type

As of

01/94 Left IRS

To other

IRS areas

Changed

appointment

type

From other

areas

New to

IRS

As of

12/94

Career and career

conditional 18,282 (2,997) (1,182) (6) 385 14 14,496

Term 1,784 (828) (17) 126 5 2,849 3,919

Temporary 783 (352) (2) (120) 1 608 918

Totals 20,849 (4,177) (1,201) 391 3,471 19,333

Source: GAO analysis of IRS staffing data as of January 8, 1994, and December 10, 1994.

Table IV.2: Changes in Processing Division Staffing Between December 1994 and January 1996

Appointment type

As of

12/94 Left IRS

To other

IRS areas

Changed

appointment

type

From other

areas

New to

IRS

As of

01/96

Career and career

conditional 14,496 (1,663) (1,872) 1,562 397 3,872 16,792

Term 3,919 (1,640) (164) (1,332) 3 1,053 1,839

Temporary 918 (480) (19) (230) 0 713 902

Totals 19,333 (3,783) (2,055) 400 5,638 19,533

Source: GAO analysis of IRS staffing data as of December 10, 1994, and January 6, 1996.

Page 52 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix V 

Comments From the Internal Revenue

Service

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 53 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix V 

Comments From the Internal Revenue

Service

See comment 1.

See comment 1.

Now on page 11.

See comment 2.

Now on page 19.

See comment 2.

Page 54 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix V 

Comments From the Internal Revenue

Service

Now on page 30.

See comment 2.

Now on page 32.

See comment 2.

Page 55 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix V 

Comments From the Internal Revenue

Service

The following are GAO’ comments on IRS’ letter dated September 11, 1996.

GAO Comments 1. These developments, which occurred after we had completed our audit

work, are reflected on pp. 2 to 3 and 10.

2. These suggested changes have been made.

Page 56 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix VI 

Comments From the National Treasury

Employees Union

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

Page 57 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix VI 

Comments From the National Treasury

Employees Union

Page 58 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix VI 

Comments From the National Treasury

Employees Union

Page 59 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix VI 

Comments From the National Treasury

Employees Union

The following are GAO’s comments on NTEU’s letter dated September 17,

1996.

GAO Comments 1. We have reworded the statement to make our point more clear (see p. 4

of the report). Pursuant to the Redeployment Understanding, IRS had to

select volunteers on the basis of seniority. Thus, IRS had to select more

senior, less experienced volunteers for positions before less senior but

more experienced persons could be selected.

Page 60 GAO/GGD-97-24 IRS’ Redeployment Experiences
Appendix VII 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

David J. Attianese, Assistant Director

James G. O’Donnell, Evaluator

Stuart M. Kaufman, Technical Assistant

Atlanta Field Office Robert V. Arcenia, Evaluator-in-Charge

Kim M. Rogers, Site Senior

Ronald J. Heisterkamp, Evaluator

A. Carl Harris, Tax Group Manager

Sara L. Bingham, Reports Analyst

Boston/New York

Field Office

George F. Degen, Evaluator

Cincinnati Field

Office

Laurie R. Housemeyer, Evaluator

Lori A. Koehne, Evaluator

Thomas M. McDonald, Evaluator

Seattle/San Francisco

Field Office

Arthur L. Davis, Senior Evaluator

Suzy Foster, Senior Evaluator

(268651) Page 61 GAO/GGD-97-24 IRS’ Redeployment Experiences
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