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Four Ways ARPA Relief Funds Can Help Government Modernize IT

The federal government is showering state and local governments with $350 billion in relief funding, including for IT. A cloud leader at Oracle looks at how that money can help agencies take the modernization plunge.

The last two years have left government leaders acutely aware of this fact: Many agencies are behind on IT modernization, and systems need to be shored up. Only 12 percent of states, 8 percent of cities and 4 percent of counties have moved more than half of their systems and applications to the cloud, according to the most recent Digital States, Cities and Counties surveys conducted by the Center for Digital Government*.

Fortunately, as a second wave of unprecedented federal funding begins to roll out via the American Rescue Plan, state and local government technology leaders have a once-in-a-career opportunity to modernize some of their jurisdictions’ most mission-critical systems and functions — but they must act quickly.

There is $350 billion in much-needed relief on the table for state and local governments, including funding for IT. For government, this is an opportunity to invest in the future by transferring key systems to cloud, investing in better data practices, strengthening cybersecurity and developing a more comprehensive view of constituents to coordinate service delivery in new ways.

Let’s look at some investment areas governments should consider innovating with this wave of funding:


Arguably no government service was as critical during the pandemic as unemployment benefits. According to the U.S. Bureau of Labor Statistics, as many as one in four American workers received unemployment aid during the pandemic. This volume of need became painfully apparent when unemployment agencies still running legacy mainframe systems couldn’t respond to the demand surge.

In contrast, cloud delivers a robust, reliable and scalable infrastructure that secures core functions and maintains high performance even amid surges in use. Cloud solutions can also help agencies address fraud, which surfaced as a significant challenge during the pandemic. Solutions that automate eligibility verification or leverage AI can pinpoint anomalies humans have difficulty catching, such as claims coming from foreign IP addresses or payments to multiple claimants routed to the same bank account. Not only can the cloud help agencies more rapidly distribute aid, it can ensure it gets into the right hands.

In Los Angeles, the city provided $36 million in direct financial assistance to folks hit hardest by the pandemic, such as workers who had jobs in restaurants, seasonal workers, self-employed individuals and more. The city’s online application process screened using embedded fraud detection. In only three months, the program distributed more than 35,000 pre-paid debit cards to households in need, serving more than 100,000 people with $36 million.


Similarly to unemployment benefits, the pandemic generated extraordinary demand for social services such as food assistance, child-care assistance and Medicaid. In response, the federal government gave states expanded authority to extend Supplemental Nutrition Assistance Program (SNAP) benefits to citizens and to be more creative in how they support constituents. While the increased assistance was welcomed by citizens, adjusting to the change created challenges for many states. From a technology perspective, it often meant reconfiguring legacy IT systems managing SNAP, Temporary Assistance for Needy Families (TANF), the Low Income Home Energy Assistance Program (LIHEAP) and child-care assistance.

For Kansas IT decision-makers, the adjustment was simple. The state recently migrated its integrated eligibility system to the cloud. Because the new architecture provides flexibility and scalability to react to new federal mandates, Kansas health and human services leaders issued an additional $11 million in SNAP benefits to approximately 60,000 citizens in one night.


Cybersecurity is another crucial area for investment, especially with many employees working remotely. Government agencies house very sensitive data that must be protected, no matter what device an employee signs on from, or where they are. Investment in cloud solutions can strengthen municipalities’ security posture through built-in security controls, zero-trust architecture, encryption and AI which can pinpoint suspicious behavior both within and outside of government systems.


In a world where people can order groceries to their doorstep within an hour, people expect seamless service from the public sector. Governments have to invest in technology for a more dispersed world.

One consideration is the creation of front-end portals — from utilities to permitting and licensing and beyond. Governments can consolidate services into a “one-stop shop.” Rather than a restaurateur waiting in line for permits, or a citizen dialing a 1-800 number to report a broken streetlight, municipalities can deploy easy-to-use online tools to interact with constituents and better meet their needs.

This also frees up staff to do higher-value strategic work. As staff accustomed to working with mainframes and other on-premise solutions begin retiring, a new generation of workers are entering the field. These workers expect to use cutting-edge technology to perform engaging and thoughtful tasks — not mundane work that an automated system can perform.


The modernization campaign on the horizon will look different from previous efforts. Some governments will invest in a full-scale “rip and replace” operation, migrating entire systems, although many are likely to do so in a more modular fashion over time to lower implementation risks. Even so, such projects can take years and are too often based on static requirements and assumptions that may shift before project completion.

Others will implement “move and improve” efforts, shifting key operating environments to the cloud, thereby increasing performance and capacity with minimal user disruption.

Finally, an “edge” approach focuses on increasing time-to-value by targeting the highest-priority improvements and rapidly standing up solutions. Given the lessons learned these past 24 months, many governments will likely focus on these kinds of projects by deploying agile solutions using cloud as a common development platform.

No matter the modernization approach, as the new funding rolls out, the most critical consideration is that infrastructure investments align with priorities that can sustain agencies into the future. Cloud can provide this longevity. As the public sector modernizes, leaders should consider whether those investments can meet their needs today, tomorrow and in years to come.

*The Center for Digital Government is a part of e.Republic, which is Government Technology’s parent company.