By GovFresh · June 3, 2016
According to NextGov, the Government Accountability Office is working on a report related to 18F’s financial operations, and the tone of the article reads as if the current status is less than optimistic.
From NextGov:
The unit, which operates on a fee-for-service basis, has struggled to balance revenue and spending since its founding in 2014 and is currently facing a projected fiscal 2016 shortfall of nearly $15 million, according to a draft GAO audit. ... While 18F’s quarterly revenue has grown three-fold since its inception, its expenses have outpaced revenue. 18F is currently spending an average of more than $1 million per month more than it recovers from the use of its personnel and programs. In fiscal 2016, 18F is projected to receive approximately $33 million for its services, but will spend almost $48 million.
I’ve mentioned before my thoughts on giving it time to incubate and hope GAO doesn’t focus solely on deconstructing 18F’s work in a skewed negative light, adding fuel to the government technology peanut gallery’s fire.
Of course, GAO has an important obligation to ensure agencies are operating ethically and fiscally responsible, the tendency to focus primarily on financial shortcomings without taking into account the potential and unrealized added value can be harmful.
Unfortunately, there’s no reliable way to holistically quantify the innovation and entrepreneurial contributions 18F has made, including unpaid work that’s been re-purposed by other cities or helped make citizens safer when accessing federal government websites.
It’s very easy, especially in a political environment, and especially for a high-profile organization like 18F, to be critical of its operations. There are a long list of items I’d like to see GAO look into and, right now, 18F isn’t one of them.
I’ve always admired GAO’s work and, hopefully, its assessment is fair and doesn’t reflect the tone of the article (the author of whom I also admire).
Every Silicon Valley startup that sees 18F’s revenue-expenditures ratio and customer adoption rate over the past years would be envious.
As I’ve said before, let’s give 18F some space.
Update
I just received the following message from Atlantic Media (NextGov’s parent company):
As you continue to report on the contentious inspector general audit that revealed the Obama administration's tech-consulting team 18F may have caused a data breach, I wanted to flag another investigation—this one by the Government Accountability Office— that will shine a light on 18F's finances. In a NextGov exclusive, Frank Konkel finds that 18F, which operates on a fee-for service basis, has struggled to balance revenue and spending since its founding in 2014 and is currently facing a projected fiscal 2016 shortfall of nearly $15 million, according to a draft GAO audit. Per its own projections, 18F is not expected to break even until at least fiscal 2018 and according to a source familiar with the draft GAO audit, the report is critical of 18F's cost-recovery plan, saying it lacks specific goals and measures. The full report is available here: http://www.nextgov.com/cio-briefing/2016/06/18f-tech-team-struggles-balance-its-books-soon-be-released-report-shows/128780/
I don’t want to turn this into a bigger issue than it is, or that they’re making, but to get an email “exclusive” with the subject “President Obama’s highly praised tech team is actually losing A LOT of money” is frustrating to see.
While $15 million is a lot of money, I just think journalistic and investigator general time would be best spent on programs that are impacting millions of people who depend on federal government services that costs hundreds of millions (and billions) of dollars and show no hope for progress or success.
18F doesn’t fit into that category. In fact, my bet is that 18F is helping the federal government (and those it serves) save time and money by introducing more sustainable, agile processes, and I hope costs savings is also accounted for in the report.
It’s important for media outlets like NextGov and agencies like GAO to pursue and shed light on oversight issues, but this just feels small potatoes in the bigger scheme of government technology things.