Watchdog greenlights partial repayment for TMF projects

The facade of the GAO building in downtown Washington, D.C. (Cory Doctorow/Flickr)

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Agencies must pay back some, but not necessarily all, of the funds they receive from the Technology Modernization Fund for IT and cybersecurity projects, according to a Government Accountability Office decision issued Thursday.

GAO legal counsel found Section 1078 of the fiscal 2018 National Defense Authorization Act gives the Office of Management and Budget and the General Services Administration the authority to demand less-than-full, but not zero, reimbursement of awarded TMF funds.

TMF Board officials introduced alternative partial and minimal reimbursement arrangements following the injection of $1 billion into the fund via the American Rescue Plan Act in March 2021, arguing the original, five-year total repayment window dissuaded some agencies from applying for funds. But the board still has an obligation to keep the TMF functioning.

“In setting the reimbursement amounts and terms, OMB and GSA must ensure the solvency of
TMF including operating expenses,” writes general counsel Edda Emmanuelli Perez in her finding.

Sens. Rob Portman, R-Ohio, and Cindy Hyde-Smith, R-Miss., requested the decision in a June 15, 2021, letter to the U.S. comptroller general who heads GAO.

GAO’s finding upholds OMB and GSA’s “reasonable” position on the matter, given the most urgent TMF projects may not have “easily realized” cost savings for their agencies. The decision acknowledges partial and minimal reimbursement plans “potentially diminish TMF’s operating capacity” but notes the TMF Board is still limited in how much repayment it can waive because future congressional appropriations aren’t guaranteed.

At the same time, there’s a “legislative history” of additional TMF funds being made available, and the projects themselves are intended to generate additional modernization efforts and cost savings at agencies they can, in turn, use for reimbursement along with, potentially, working capital funds, according to the finding.

“While agency IT working capital funds are available for reimbursing TMF, they are also available for other purposes, and agency IT working capital funds are only to be used to reimburse TMF with certain approval,” reads the decision.

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American rescue plan, Cybersecurity, General Services Administration (GSA), Government Accountability Office (GAO), IT Modernization, National Defense Authorization Act, Office of Management and Budget (OMB), Technology Modernization Fund, Technology Modernization Fund Board, working capital funds
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