GAO Advises OMB to Require Agencies to Finish Implementing the TBM Framework

The federal government is implementing the TBM framework, a commercial best practice for managing IT resources, to better oversee and benchmark federal IT spending. Adoption began in 2017 to be phased in over several years and help federal agencies better manage IT resources and provide spending transparency.

The TBM taxonomy includes a standard set of categories that agencies are required to use in their annual IT budget requests. The taxonomy is organized into four layers intended to show an organization’s total IT spending from different perspectives:

• Cost Pools: Describe IT spending using terms that are often closely aligned to an organization’s general ledger accounts, which capture expenditures and expenses for financial reporting.
• IT Towers: Describe IT spending in terms of the assets and technologies that an organization typically uses to develop and support products and services.
• Products and Services: Describe IT spending in terms of the technology solutions that the organization provides to its internal and external users (e.g., computing devices and software, infrastructure services such as facilities and networks, and shared services for core operating capabilities).
• Business Units and Capabilities: Describe IT spending in terms of how products and services support the organization’s business units, customers, and business partners. This layer also describes IT spending in terms of the capabilities and processes that enable business outcomes.

GAO found that OMB currently only requires agencies to implement part of the TBM framework. To date, agencies are only required to report IT spending and budgets in terms of cost pools and IT towers, and OMB has not expanded on requirements to include the rest of the taxonomy. 

According to a report done by the TBM Council in 2016, the framework could be used to benchmark federal IT spending to a peer group, a standard, or over time to analyze trends. Such insights and performance trends could provide guidance regarding which investments should be maintained or reduced. In addition, benchmarking could provide information regarding the cost-effectiveness vendors.

However, GAO found progress and results of government-wide TBM adoption are limited. Specifically, OMB’s plans for government-wide TBM adoption stalled and did not include the entire taxonomy or maturity measures. OMB’s initial plans for FY 2019 through 2021 required agencies to begin incrementally reporting the first two layers (cost pools and IT towers) as part of their annual IT budget requests. After 2021, OMB continued to require TBM reporting of the cost pools and IT towers layers for fiscal years 2022 through 2023. However, OMB has not expanded on the requirements to include the rest of the taxonomy. Also, although agency-report TBM data is available on the IT Dashboard, OMB and GSA have not taken additional steps to enhance the usefulness of the data for benchmarking efforts.

OMB and GSA officials told GAO that TBM implementation continues to be a priority. However, GAO believes without documented plans for implementing the remainder of the taxonomy, uncertainty will cloud agency efforts.

GAO made seven recommendations to OMB and GSA:

• OMB should direct the federal CIO to establish plans and time frames for government-wide TBM adoption to include the remaining elements of the taxonomy.
• OMB should direct the Office of Federal Financial Management and Budget Review Division to work with GSA's TBM program management office to determine appropriate next steps for updating budget object classification codes to better align agencies' financial management systems with the TBM taxonomy.
• OMB should direct the federal CIO to work with GSA to establish an approach for assessing the maturity of agencies' TBM implementation.
• OMB should direct the federal CIO to require all agencies to complete and submit the TBM maturity model assessment tool to OMB and GSA.
• OMB should direct the federal CIO to ensure that known limitations in the TBM data for FY 2021 are publicly disclosed on the IT Dashboard.
• OMB should direct the federal CIO to analyze inconsistencies in agency-reported TBM data to determine why agencies are reporting differences between their TBM and IT portfolio spending data.

GSA should direct the Office of Government-wide Policy's Director of IT Data Transparency to ensure that TBM benchmarking functionality is developed for the IT Dashboard.