Shared services, praised for the promise of streamlining government function and saving taxpayer money, are popular within the Trump administration. Despite movement in this area, however, a newly released Government Accountability Office audit found some “weaknesses” in a payroll shared service implementation that, the watchdog argues, could hinder overall adoption.
The report specifically looks at the example of NewPay, a $2.5 billion shared services contract for payroll services that the General Services Administration contracted out in September 2018. While GAO acknowledges that GSA and the White House’s Office of Management and Budget, the two agencies in charge of crafting and implementing governmentwide shared services policy, are following many broad change management practices, it says other such practices are still missing.
For example: “OMB and GSA do not have a finalized plan to monitor the implementation of NewPay,” the report states. OMB told GAO that it is working on such a plan, but did not provide a draft for the watchdog agency to review. “Our prior work on organizational transformations shows that incorporating change management practices — such as setting implementation goals and a timeline to show progress — improves the likelihood of successful reforms,” GAO writes.
The report also suggests that transparent reporting on progress — published on the internet, for example — could help OMB and GSA “demonstrate that they are aware of challenges and are addressing them as they arise.”
“Without a monitoring plan with performance goals and milestones, transparent reporting tools, and a process for capturing lessons learned, it will be more difficult for OMB and GSA to provide oversight of the transition and its effects on providers and customers,” the report states.
GAO is also concerned that OMB and GSA don’t have a mechanism, yet, for collecting data on the cost-savings incurred by NewPay. Given that cost-savings is a major goal of shared services, access to this data is key in proving the success of such initiatives.
The report culminates in four recommendations targeted at OMB, each of which broadly concerns improving shared services governance. OMB did not agree or disagree with GAO’s findings but said that it is reviewing its shared services policies and “may” provide updates in the future.
NewPay was granted a $20.7 million award from the Technology Modernization Fund in February, the biggest single award to date.
“The TMF was created to invest in modern commercial solutions and drive faster adoption of shared services,” TMF Board chairwoman and Federal CIO Suzette Kent said at the time. “We are pleased to support a project that will accelerate the journey to make available modern payroll services for all agencies and drive efficiency across government.”