Waste of the Day: $91 Million Cost-Cutting System

Topline: The federal government has spent over $91 million on implementing its cost-cutting Technology Business Management system, but the new system has not led to any identifiable cost savings because of the Office of Management and Budget’s “lack of action and guidance over the last eight years,” according to an Aug. 18 report from the Government Accountability Office.

A cost-cutting system that doesn’t cut costs at all – because no one uses it

Key facts: The Technology Business Management system was developed by a nonprofit in 2012 to help companies track the value of their spending on information technology. For example, the system might help a company consolidate its cloud storage systems or decide if it would be worth it to buy more laptops. 

Shortly after President Donald Trump began his first term in 2017, the Office of Management and Budget announced that the whole government would gradually begin using the tech management system.

Most agencies have started using some parts of the system, but progress has been stalled for years, according to the GAO. In 2022, the government had still not issued new guidance on implementing the system besides its instructions from 2017.

The guidance that has been issued lists two simple steps: create a plan for implementing the system with specific milestones and dates, and find a reliable way to keep track of technology expenses. Of the 26 agencies that are supposed to use it, only six of them are following both steps completely, the GAO found. Four agencies are not following either step.

The 26 agencies have spent at least $91 million of taxpayer money to implement the system, including to hire contractors, buy software licenses and train employees. The actual dollar total is likely much higher; only 12 agencies reported all of their costs to the GAO.

A mixed record

Twenty of the agencies said they have found some benefit from the system, with some saying it is now easier to write their technology budgets. However, 19 agencies told the GAO that they have not saved any money so far. A few agencies said it had made them more efficient but could not give a dollar number of how much money it helped them save.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Summary: Cost-cutting measures that only create more paperwork and red tape are unlikely to actually generate savings. Perhaps the tech management system will be successful eventually, but spending $91 million on a system that has no identifiable savings is a waste of money.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

About the image

Photo by Alexander Grey on Unsplash

This article was originally published by RealClearInvestigations and made available via RealClearWire.