The Government Accountability Office (GAO) is concluding in a new report that the Technology Modernization Fund (TMF) has historically cost more to run than it collects in fees from agencies that it awards funding to, and that most of the savings estimates from older funded agency projects continue to be unreliable.

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The latest report from GAO – in which the government watchdog agency urges action on its prior recommendations to the fund to address fee collection and proposal cost estimates – appears to cover older TMF activities prior to the fund’s award of $1 billion under the American Rescue Plan Act earlier this year.

“OMB [Office of Management and Budget] and GSA [General Services Administration] have not yet implemented GAO’s prior recommendation to develop and implement a plan to fully recover operating expenses with fee collection,” wrote GAO. “Doing so would provide greater assurance that fees collected would be sufficient to offset operating costs.”

TMF, which is overseen by the GSA and OMB, awards Federal agencies with funding to replace out-of-date IT systems.  Since the fund’s creation in 2017, Congress has provided $175 million to TMF – $89 million of which was used to fund 11 IT projects – prior to the $1 billion of new money given to the fund earlier this year under the American Rescue Plan Act.

According to GAO, OMB funding guidelines require projects to include reliable estimates of project-related savings. But, GAO said, “most of the TMF projects’ reported savings estimates derived from cost estimates continue to be unreliable.”

With the expansion of funds through the American Rescue Plan, GAO says it is increasingly important for GSA to implement GAO’s prior recommendations to improve the instructions for TMF cost estimates required of each proposal, and making documentation more complete, accurate, and reliable.

Recommendations that GAO made in its prior TMF report include:

  • OMB and GSA developing and implementing a plan outlining the actions needed to fully recover the TMF Program Management Office’s operating expenses with fee collection in a timely manner; and
  • GSA developing guidance to aid agencies in completing TMF proposal cost estimates.

These past recommendations have not yet been implemented, and GAO maintains that their implementation would improve fee collection and quality of cost estimates.

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Jordan Smith
Jordan Smith
Jordan Smith is a MeriTalk Senior Technology Reporter covering the intersection of government and technology.