Three years ago, the watchdog Federal Performance Project gave the Internal Revenue Service a passing - but not stellar - grade of a "C" average. On May 15, 2002, the Project announced that the IRS' grade has improved to a "B minus."

The Federal Performance Project, which provides an independent management assessment of federal agencies, is a collaboration between Government Executive magazine and George Washington University’s public administration department. It is funded by the Pew Charitable Trusts.

The highest rated area for the IRS was "managing for results," which received a grade of B. Credit for the grade goes to the IRS’s clearly stated mission, well-defined goals, bimonthly performance reviews and new performance measures.

Overall Ratings

• Managing For Results - B

• Human Resources - C

• Information - C

• Finances - C

Among the positive trends noted in the report that improve accountability are the restructuring process and pay for performance measures adopted by the IRS. Negatives include manual accounting, staffing mismatches, and inability to measure voluntary compliance.

Overall, the report noted that improvements are needed to overcome problems such as decreased employee satisfaction, problems with computer systems and lack of management flexibility remain a problem.

Details of the Report Card may be found on the Web site of the Federal Performance Project.

"The Federal Performance Project score is just the latest indication of the change underway at the agency. Public opinion surveys also indicate improvements in the way people view the IRS," said Charles O. Rossotti, IRS Commissioner. "We certainly are not satisfied with a B minus, but the trend is in the right direction."