Forwarded From: darek milewski <darekm@cmeasures.com>
http://cnn.com/US/9812/01/irs.security/index.html
Audit of IRS reveals problems with security measures
$100 million delivered by a bicyclist
December 1, 1998
Web posted at: 5:22 a.m. EST (1022 GMT)
WASHINGTON (CNN) -- A new audit of the Internal Revenue Service's security
operation has found potentially costly problems at the agency. IRS used
bicycle couriers to transport taxpayers' checks to banks and hired
employees with criminal pasts, according to the audit by the congressional
General Accounting Office. At one office, a bicycle messenger was
entrusted with up to $100 million in deposits every day.
The GAO said a courier left a $200 million deposit unattended in a car
with a window open.
Investigators found that unarmed couriers driving civilian cars alone, or
riding bicycles were used at four IRS service centers, to deliver tens of
millions of dollars in taxpayer checks.
IRS Commissioner Charles Rossotti did not challenge results of the audit
released Monday but said the IRS is taking steps to remedy its security
weaknesses.
"We take our responsibility to protect taxpayer information very
seriously," Rossotti said. "We plan to continue working with GAO to do
everything possible to ensure the security of taxpayer information and
payments."
The GAO visited IRS service centers in Atlanta; Philadelphia; Austin,
Texas; and Ogden, Utah, from April 20-23, during this year's tax filing
peak. Practices at district offices in Los Angeles, northern California
and northern Texas were also observed.
Although the deposits did not include cash, taxpayer checks contain such
private information as bank account and Social Security numbers, names and
addresses and signatures. They can be "cloned," using account numbers,
into fake bank accounts if stolen. "The theft of one peak season deposit
could place a significant administrative burden on IRS to contact
taxpayers and initiate stop payment orders on tens of thousands of
checks," GAO investigators wrote.
The audit did not identify any instances of such a theft. But the GAO did
cite lack of adequate background checks in 12 of the 80 IRS employee
thefts, or about 15 percent, investigated from January 1995 to July 1997.
Those 80 thefts totaled some $5.3 million and were detailed in a previous
GAO audit.
In most cases, delays in receiving fingerprint results, combined with a
crush of new hires during peak filing season, meant that some people were
on the job before their backgrounds were thoroughly vetted by the IRS. The
employees handle cash, checks and private taxpayer information.
The IRS hired 20,000 seasonal employees this year to handle peak filing
season, when up to 100,000 pieces of mail a day are received and processed
at agency service centers. The fingerprint checks took an average of 68
days -- one took 141 days -- instead of the 21 days that had been
expected.
GAO also found that taxpayer checks were often stored in unrestricted
areas, contrary to IRS policy, meaning unauthorized employees would have
greater access to them. In one case, the documents were stored in a
hallway adjacent to a fitness center where anyone could enter
unchallenged.
Rossotti said the agency intends to have better deposit transporting
methods in place by August 1999 and other security improvements involving
handling of receipts should be ready by January 1.
In addition, IRS within two months intends to have a new, live fingerprint
scanner at 17 sites, including the 10 service centers, that can complete
FBI checks within five days, Rossotti said.
Still, Sen. William Roth, chairman of the Senate Finance Committee, which
oversees the IRS, expressed dismay over the audit's findings.
"The IRS has a responsibility to protect taxpayers' money and to safeguard
each taxpayer's personal information," said Roth, R-Del. "Unfortunately,
many of the service centers have not been taking appropriate precautions."
-o-
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Received on Tue Dec 8 08:57:02 1998