Capital Planning and Investment Control First Annual Federal Capital Planning & Investment Control Conference - July 23, 2008 Marla Somerville, Director, IRS CPIC

Page 2 IRS is one of twelve Treasury Bureaus U.S. Mint Bureau of Engraving & Printing Bureau of the Public Debt Alcohol and Tobacco Tax and Trade Bureau Financial Management Service Financial Crimes Enforcement Network Internal Revenue Service (IRS) Office of the Comptroller of the Currency Office of Thrift Supervision Financial Crimes Enforcement Network Inspector General Treasury Inspector General for Tax Administration

Page 3 72% ($1.36B) of the IRS IT Portfolio is in E300s* Currently, 30 Major IT investments (~ ½ of Treasury’s Major investments) Major IT investment criteria Department or Bureau established threshold Treasury: >$50M life cycle cost or $5M/year Financial management >$500,000 E-business or E-government High executive visibility ~155 Non-Major IT investments * Includes infrastructure

Page 4 But in the beginning… U.S. Mint In 2002 – due in large part to the poor quality of our E300s – OMB threatened to withhold $100M of requested funding!!

Page 5 The next day… The IRS CPIC Office was born!

Page 6 The following year… Every one of our E300s received passing scores!

Page 7 The next day… We patted ourselves on our backs and proudly proclaimed: “We’ve got it all figured out!”

Page 8 Fast forward - this year… …32 of 34 Major investments landed on the OMB Watch List, i.e., 32 of our Majors did not receive passing E300 scores.

Page 9 But after remediation… All of our BY09 E300s came off the Watch List!!

Page 10 (I’ve been dying to use this graphic!) PMA Acquisition Performance Privacy Security Risk EVM EA PM AA Score a perfect “300” with IRS CPIC

Page 11 What have we done since 2002? - Established performance measures for the CPIC Office - Continued to stand up and support enterprise governance - Formed Critical Partnerships, e.g., Applications Development Program Management Office (AD PMO) - Continued to form partnerships with Subject Matter Experts (SMEs), e.g., Acquisitions/Contracts; Security and Privacy; Enterprise Architecture; and CFO - Created a link between our Modernization Vision & Strategy (MVS) and CPIC processes that provides a rigorous Pre-Select Phase to our Select, Control, and Evaluate CPIC processes - Properly reclassified Mixed Life Cycle investments as Steady State - Participated in a Treasury Working Group on Earned Value Management (EVM) policy - Ensured that E300s were supported by quality project management artifacts

Page 12 What else are we going to do? - Continue to work with Investment Business Sponsors and Program/Project Managers to better integrate their business/IT work with the CPIC process - Anticipate and prepare for implementation of the Federal Acquisition Certification for Program and Project Managers (FAC – P/PM) - Update and continue to implement our Communications Plan - Create a “Readers Guide” for the next Administration’s transition team - Reassess and strengthen our Information Technology Investment Management (ITIM) practices - Working with our partner organizations, serve as a catalyst in creating a seamless CPIC process across the enterprise - Benchmark our practices against other Federal and private sector CPIC processes - Continue our strategic planning efforts and develop a new, progressive Concept of Operations

Page 13 Challenges Organizational Responsibility and Maturity FY 2003 FY 2004 FY 2005 FY 2007 CPIC Office Initial Stand Up Oversight of Non-Majors Alignment of Timelines Aligning And Streamlining Processes GAO and TIGTA Audits Stakeholder Engagement/ Communication Changing OMB Requirements Changing Treasury Requirements Achieving Transparency New Administration FY 2006 FY 2008 FY 2002 Communication With OMB Challenges

Page 14 What are we missing? Are we doing all that we need to do? What are we doing right? Wrong? Any other advice?

Page 15 Contact Information Marla Somerville Director, IRS CPIC 5000 Ellin Road Lanham, MD