Most projects funded through the Technology Modernization Fund (TMF) have not yet achieved their expected cost savings, according to a new report from the Government Accountability Office (GAO), although the program anticipates yielding roughly $1.6 billion in savings in the coming years.
The report found that between fiscal year (FY) 2018 and 2025, the TMF invested about $1.03 billion in 68 unclassified projects across 40 agencies.
Of the 68 projects, 24 expect to generate a combined $1.06 billion in cost savings. As of June 2025, 11 of those projects had collectively realized about $13.5 million in savings, while the remaining 13 had not yet begun to achieve savings.
According to the report, the limited savings to date were not unexpected because 21 projects, representing about $1.04 billion, or 98.3%, of the total expected savings, anticipate achieving those savings in FY 2027 or later.
However, the remaining projects are not all designed to reduce costs. Thirty-seven projects do not expect to generate cost savings but are intended to provide other benefits, such as mitigating security risks. Seven additional projects were canceled before June 2025 and no longer expect savings.
The report also examined the performance of completed projects. Of the six completed TMF projects that expected cost savings, two met or were on track to meet their expected savings within 10%, while four did not meet or were not on track to meet their savings goals.
Officials overseeing the projects that fell short cited several factors, including the removal of planned functionality and higher-than-expected system migration costs, which resulted in tens of millions of dollars less in actual savings than originally estimated.
The TMF was established by Congress in 2017 through the Modernizing Government Technology Act and is administered by the General Services Administration (GSA). The fund provides financing to federal civilian agencies for projects that modernize aging information technology systems.
In his response to the report, GSA Administrator Edward Forst told GAO that the TMF has financial benefits beyond savings described in the report.
“Distinguishing between cost savings and cost avoidance understates the full financial benefit generated by TMF investments, as significant amounts of money that agencies did not have to spend are categorized as cost avoidance, rather than included in realized savings totals,” wrote Forst.
Unless Congress takes action, the TMF’s authorization to make new investments is scheduled to expire on Sept. 30, 2026.