While the arrangement comes with a requirement to repay the fund out of savings long-term, the GAO in a series of reports has found that repayments have not matched expectations because the savings have not done so, either. Image: JHVEPhoto/Shutterstock.com
By: FEDweek StaffThe GSA has adjusted requirements “to prioritize full repayment for new investments” funded by the Technology Modernization Fund, which provides upfront money for IT projects, including to replace legacy systems rather than continuing to spend over time to keep them operating.
“This shift transforms a finite appropriation to an enduring fixture of our modernization strategy, creating lasting institutional capacity to address technology debt,” the agency said. “Agencies seeking TMF funding will continue to receive flexible repayment schedules tailored to their specific project circumstances, with an emphasis on developing plans that prioritize full repayment whenever possible.”
While the arrangement comes with a requirement to repay the fund out of savings long-term, the GAO in a series of reports has found that repayments have not matched expectations because the savings have not done so, either.
In a 2022 report examining seven of the 11 projects approved in 2018 and 2019 under the fund, it found only two had reported generating cost savings, and that even those were not documented; of the others, two no longer planned on achieving savings and another could not project when they would be achieved. Similarly, a 2023 report found that only eight of the 37 projects funded had shown savings—totaling less than $15 million out of the $636 million awarded to them—although most were still underway and could yet achieve savings.
Those reports have drawn the attention of Congress, which has added language to spending bills stating its expectation that the fund would be repaid in full. Also, the House last year passed a bill to require agencies to report in more detail on their ability to repay the TMF before they could receive funding, although it did not receive a vote in the Senate; a similar bill (HR-2985) has been introduced in the current Congress.
Since 2018, the TMF has allotted more than $1.05 billion to 69 projects across 34 agencies for purposes such as cybersecurity and customer experience improvements.
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