The Government Accountability Office (GAO) released its 2021 High-Risk List, which notes “Skill Gaps” and “Workforce Shortages” are tied to over 20 other high-risk items listed.
At the beginning of the month, the GAO published the 2021 High-Risk List that highlights the biggest potential threats to the Federal Government’s landscape. The objective of the document, which is produced by the GAO every two years, is to limit potential waste, fraud, and abuse within agencies. Of the 35 items that are shown on the report, 22 are said to be affected by two pervasive, interrelated problems: work shortages and skill gaps.
The report also points out that the agency in charge of acquisition and retention initiatives, OPM, has not been consistent in terms of leadership. Therefore, the focus on these shortages and skill risks hasn’t been there from the top long enough to make any significant impact. OPM has had 9 different head directors in 8 years, with Kiran Ahuja currently nominated to be the tenth. Kathleen McGettigan is currently in the “acting” director role in charge of OPM for the second time of her career, and both stints were in that 8-year span of 2013-2021. The report does note that OPM leadership has created some short-term solutions, such as the Fast Agency Skills Teams, to mitigate the damage, but it’s not enough. For the skill gaps, a lot of progress has been made in the realm of cybersecurity, but the High-Risk List accentuates that other skill gaps from the STEM fields (Science, Technology, Engineering, and Math) are not being addressed.
Although some items on the list did improve since that last report was published in 2019, roughly the same amount of items regressed. The report blisteringly details how the majority of the high-risk items have an unchanged rating from the previous evaluation.
Workforce Shortages at the IRS
The impact of an understaffed agency can cause negative impacts on citizens and their workers. This can be seen currently at the IRS, where hardworking employees have been placed under an alarming amount of stress due to the pandemic.
As reported back in June, the agency was already faced with numerous challenges before COVID-19 upended our lives. Changes stemming from the tax law the Trump administration passed, a series of budget cuts, and unfilled positions were all putting pressure on IRS workers before the pandemic went into full swing last March. Since then, the federal employees at the IRS have worked heroically, often with a hypercritical spotlight on them from popular media outlets. But the impact from being understaffed has been made painfully clear to many Americans who were expecting stimulus payments or tax refunds, and are stuck dealing with an overwhelmed agency.
With the Coronavirus came another onslaught of obstacles. First, employees started working from home to maintain social distancing so tax returns that weren’t filed electronically were essentially neglected. There are still 12.3 million paper returns from both 2019 and 2020 that have not been touched since arriving at an IRS facility’s mailbox. Second, the staffing issues that were already a problem got exacerbated. 25% of people who call the IRS to speak with a representative never reach their goal. This can be frustrating for taxpayers, especially if you’re one of the 12.4 million people who had their 2020 return suspended for “further review.” While a handful of these were flagged for reasons such as potential identity theft, an approximate 7 million of these (56%) are suspended for “error resolution” and need to be manually checked by an overburdened IRS worker. 2.4 million taxpayers have yet to receive their money from the December 2020 stimulus package because their 2019 tax return is still pending for review, and that stimulus was based on 2019 reported income.
The stimulus checks themselves created the third new challenge that the pandemic, perhaps unfairly, dumped onto the agency. Managing the disbursement of these funds, along with determining who is eligible for them, are two brand new responsibilities that the agency has to deal with on top of everything mentioned above. The IRS employees at the frontline are fighting gallantly, but they're against a daunting force, so hopefully, they get some reinforcements. The NTEU asked Biden to support adding 4,000 new positions to the IRS back in December.
Until Next Time,
**Written by Benjamin Derge, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.