Agencies are still figuring out the best way to establish and govern IT working capital funds two years after passage of the MGT Act.
The Technology Modernization Fund—a central pot of money to provide loans to agencies for IT upgrades—is a useful tool but the ongoing push to establish internal agency working capital funds will be the real success, administration officials said Wednesday.
While the TMF gets a lot of attention, the fund is only half of the modernization effort enacted as part of the Modernizing Government Technology, or MGT, Act passed in late 2017. The law also called for individual working capital funds in which agencies could deposit leftover funding from other areas to be put toward IT modernization efforts.
“The real staying power is in the working capital fund. That is the thing that is going to last. That is the thing that helps us create a more modern and nimble government going forward,” Federal Chief Information Officer Suzette Kent said during an event Wednesday hosted by ATARC and the General Services Administration.
Kent said the main benefit of working capital funds is that they allow agencies to hold on to funding over multiple years, even if the money was originally appropriated for use within a single fiscal year. Due to long lead times with appropriations and acquisitions, the germ of an idea can take several years to come to fruition, Kent said, which flies in the face of the government’s customer-focused modernization efforts.
“If we wait two years to deliver that, that’s not being customer-responsive. And we lose the trust of the citizen when we ask, ‘What should we be doing?’ then say, ‘OK, I’ll see you in four years,’” she said. “Agencies that have established the fund or are working to establish the fund are moving in the direction of supporting lasting change.”
But creating those funds was not as simple as passing the MGT Act.
After the legislation became law, agencies began looking at the possibilities but many found they could not just start putting money into a fund. Some agencies did have working capital funds that could be used for this purpose but many had funds but not reprogramming authority and still more had neither, according to Federal Deputy CIO Margie Graves.
“We are still working through that. But I must say that adopting this methodology and approach is already showing huge paybacks for not only those who have won TMF money but also for agencies who are having substantive conversations with their CFO about how they find money” to add to the working capital fund, she said.
“It’s really about reimagining your program funding in a digital world,” she added.
Graves said she has also seen this with agencies that applied for TMF money but were not or have yet to be chosen. Those officials are now going back to their agencies with detailed modernization plans—including full business cases, acquisition strategies and repayment plans—that can act as shovel-ready projects for reprogrammed funds.
That has been true for the Small Business Administration, which was the first agency to get specific congressional authority for an IT working capital fund, said CIO Maria Roat, who also sits on the TMF Board.
To date, SBA has set aside $6 million in the fund using a congressional authority that allows the agency to reprogram up to 3% of money appropriated to the salary, expenses and business loan program accounts in any given year.
“We’ve put money in it; identified six areas around agency enterprisewide modernization activities where we’re going to focus the money; and then, right now, we are working on our governance for the IT working capital fund,” Roat said on the panel with Graves.
Roat said the governance framework will be similar in function to that of the TMF Board.
“We do have an investment review board at SBA and we’re working through the governance on that,” she said, noting the most recent draft was waiting in her inbox for review. “We’ve been working through how we will manage that fund and what the role of the investment review board will be.”
The first of the six projects on deck will be to centralize the agency’s half dozen or so IT help desks, Roat said. SBA will be looking at how to consolidate those service desks and create an omnichannel experience for users.
From there, the team plans to look at things like cross-referencing data to get a better view of the customer and updating the backend of the SBA.gov website.