The Internal Revenue Service’s (IRS) information system security controls require further improvements, a new report from the United States Government Accountability Office (GAO) claims.
An audit of the IRS’ fiscal years 2018 and 2017 financial statements revealed that the agency maintained effective internal control over financial reporting, but new information system security control deficiencies have been identified during GAO’s fiscal year 2018 testing.
“Although the significant deficiency in internal control did not affect our opinion on IRS’s fiscal year 2018 financial statements, misstatements may occur in unaudited financial information that IRS reports internally or externally because of this significant deficiency,” the report reads (PDF).
Of a total of 14 new information system security control deficiencies that were identified, eight were related to access control, four to configuration management control, one to segregation of duties, and one to contingency planning. GAO made 20 recommendations to address these deficiencies.
Of the eight access control deficiencies identified, three were found in identification and authentication, two affected authorization, and three others were related to cryptography.
Specifically, the IRS did not enforce requirements to use certificates to electronically sign documents; enforce limits for password age for user accounts on certain Oracle databases; use multifactor authentication for accessing certain applications; disable functions in an application to download the entire database; limit individual user account access to certain databases; encrypt certain servers; encrypt the email service; and enforce certain encrypted database connections.
In terms of configuration management control, the IRS did not implement mandatory access controls for an application; update unsupported database software and apply vendor-supplied patches for certain applications; update third-party software on workstations consistently; and upgrade certain outdated and unsupported software network devices.
The audit also discovered that the IRS allowed a non-administrator account to be included in an administrator group of accounts for one of its databases and that the agency assigned only one individual to administer the email service.
According to the report, as of September 30, 2018, the IRS had taken actions to address deficiencies associated with 46 of 154 recommendations from prior financial audits. With one deficiency and the associated recommendation no longer relevant, IRS has a total of 127 open recommendations related to identified deficiencies, including 107 recommendations that remained open as of September 30, 2018.
The IRS, the report points out, collects and maintains significant amount of personal and financial information on U.S. taxpayers, data that is essential for carrying out the mission and responsibilities for administering tax laws.
The agency has to protect this sensitive information to ensure taxpayers’ privacy is preserved and financial loss and damages resulting from identity theft and other financial crimes prevented. With the IRS heavily relying on computer systems for its operations, it must ensure these systems are secured to protect the sensitive financial and taxpayer data collected, the report underlines.
“While IRS continued to make progress in addressing information system security control deficiencies and successfully addressed a number of our prior recommendations, these new and continuing information system security control deficiencies, which collectively represent a significant deficiency, increase the risk that IRS’s financial reporting and taxpayer data will remain unnecessarily vulnerable to inappropriate and undetected use, modification, or disclosure,” the report reads.
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