Most agencies still don’t have MGT Act-enabled working capital funds

About a year-and-a-half after the Modernizing Government Technology (MGT) Act was signed, most agencies still don’t have IT working capital funds, as required by the legislation.

So what’s the holdup?

“One of the things we encountered was agencies saying, ‘Well, we’re creating a fund within our agency to be able to capture the savings effectuated in FITARA, but our lawyers are telling us we can’t use them. We can’t put money in them because that’s an appropriations function,'” Rep. Gerry Connolly, D-Va., chairman of the House Committee on Oversight and Reform’s Subcommittee on Government Operations, said during the eighth Federal IT Acquisition Reform Act hearing Wednesday.

“Some agencies I don’t think seem to have that problem, but others do,” he went on, before asking the two witnesses — U.S. CIO Suzette Kent and Carol Harris, director of IT management issues at the Government Accountability Office — for their views on how to solve this issue.

“We believe in some cases it needs to be fixed legislatively,” Kent replied.

But Harris, at least in theory, disagreed. “When MGT was passed, the intent was that transfer authority would be there,” she said. “So, while I’m not a lawyer, it kind of boggles the mind that you would need additional legislation to offer that transfer authority.”

“I know Mr. Hurd would share your view, and so do I,” Connolly responded. “Our view is — the law is the law. We passed the law. It’s quite clear what the intent is.”

The MGT Act, which was penned by Rep. Will Hurd, R-Texas, aims to help agencies invest in long-term IT modernization projects by allowing them to put aside unused IT budget for this purpose. But while this sounds like a good idea, implementation hasn’t been super smooth.

In the most recent FITARA scorecard just three agencies — the Small Business Administration, General Services Administration and Department of Labor — received A grades, meaning they have existing working capital funds where the CIO in charge of IT funds. Four more, including the Department of Agriculture and Department of Homeland Security, have plans in place to get an IT working capital fund off the ground. But the majority of the agencies — 16 in total — received C or D grades for this component of their FITARA scores, indicating that they have a department working capital fund not specific to IT or that they do not have a working capital fund at all.

The MGT Act also created the Technology Modernization Fund, a central and cost-recoverable IT modernization fund that lends money to agencies for discreet projects. So far, TMF has awarded a total of $90 million in potential funds to projects at the departments of Energy, Housing and Urban Development, Agriculture, Labor and GSA.