Watchdog predicts ‘ongoing challenges’ collecting administrative fees for TMF

The program management office of the Technology Modernization Fund isn’t collecting fees fast enough to cover its administrative costs, a new review by the Government Accountability Office finds.

The TMF program office, housed within the General Services Administration, has obligated $1.2 million for operating expenses — salaries and the like. The seven projects to which the TMF has given funding are collectively expected to pay this back over the next few years, but so far the office has only received $33,165.

This is less than GSA had planned to collect, GAO says, for various reasons, including the fact that agencies don’t have to start paying immediately. On top of that, two projects — the Department of Agriculture’s infrastructure optimization project and the Department of Energy’s cloud email project — have reduced their scopes and therefore reduced the funding necessary and the fees they will be expected to pay back.

“Such factors raise doubts on whether GSA will be able to fully recover future operating expenses,” GAO writes. At this rate, the watchdog says, the TMF won’t see its $1.2 million until 2025.

It also means that the TMF board has less money to invest in other agency projects, GAO says.

Administration officials at the White House Office of Management and Budget, however, place blame for any shortcoming in funding squarely at the feet of Congress. In a written response to the report, OMB Deputy Director for Management Margaret Weichert says the audit “paints an incomplete picture of the TMF.”

“OMB disagrees with GAO’s characterization of the repayment process to the TMF and the assumptions about potential insolvency of the fund,” Weichert writes.

This is one central disagreement to come out of what is a very detailed report by GAO documenting all the money to pass through the TMF to date.

The watchdog is also concerned, however, with one of the central selling points of the TMF: that it will allow agencies to save money by moving away from expensive legacy IT systems. The report states that “none of the seven TMF- funded projects’ cost savings estimates can be considered reliable,” which means “it is not clear whether the projects receiving funding to date will save the government as much money as was estimated.” The way forward, GAO says, is for GSA and OMB to clarify the rules around their cost estimating processes.

To this end and others, the GAO report offers five recommendations — two for OMB and three for GSA. GSA agreed with one of the recommendations and partially agreed with the other two.

The TMF was created by the Modernizing Government Technology (MGT) Act, which President Trump signed into law in December 2017. In March 2018 OMB convened a seven-member board tasked with picking awardees of the fund.

In fiscal 2018 the TMF received $100 million, and in fiscal 2019 it got an additional $25 million. Supporters argue that the money, which recipient agencies pay back over five years, helps agencies work on large-scale modernization projects. But convincing Congress to put money into the pot hasn’t proven easy.

Thus far, out of its secured appropriations, the fund has awarded a total of $90 million to seven distinct projects — two at both the U.S. Department of Agriculture, General Services Administration, and one apiece at the departments of Energy, Housing and Urban Development, and Labor. Of that $90 million, the fund has transferred around $37 million to the agency projects.