[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6297382,"mediaKeyId","2510148-6d08a65f1f1f9053775e8942589aa52e","parentId",2510148,"title","State IT leaders defend chargeback model, propose hybrid pilot to reduce agency IT rates","audioSeconds",4305,"startMs",631000,"endMs",4936000,"viewUrl","/Search/View?dp=1&key=2510148-6d08a65f1f1f9053775e8942589aa52e&start=631&end=4936","thumbnailUrl","https://assets.pipeline.soar.com/2510148-6d08a65f1f1f9053775e8942589aa52e/thumbnail_631000.jpg","articleUrl","/articles/6297382/North-Dakota/State-IT-leaders-defend-chargeback-model-propose-hybrid-pilot-to-reduce-agency-IT-rates","mediaUrl","https://secure.pipeline.soar.com/6297382-ca25a33245977b2ffa31d43bddca731d/orig.mp4?Expires=1771292625&Signature=RIy50Cm2v~r1KGrRcvq9WLJDP8WLMBkJe3W0onPy~pOEWRyFgsJqETRFvu82jo4it5AASAbPHfA3jZQGtTdUXKNxQM~sqmpBlk~RZn~4Bi3qmey2NNzNdgx6sP~Cz75SKXSIa36Q2LLZzI3WyNMHbCw41zvPjb5DoVsRzxzkP5EWzjY2ErfRKN3xCbSg63w0HfHjXId5dLk7wwYD9E~bUo7xJg0jvqfcdyRYU-ish9BCQl94iAem38SECt9-fDAuos2pC69DiP3Ohdgb27dpzIYYeZW38GAhsHfnYoqr0LwjXEBKXcax7~3sI~jmRPo7PQsuYi0fX3e3ilbPxQe4CA__&Key-Pair-Id=KUT5TJCACFTXG","author","North Dakota Legislature","date","2025-03-05T00:00:00Z","article","Corey Mach, chief information officer for the state of North Dakota, and Greg Hoffman, deputy chief information officer and chief financial officer for NDIT, gave the House Appropriations Committee a high‑level overview of the agency’s budget, its chargeback rate model and options for moving to a hybrid funding approach.

NDIT provides applications development, data services, infrastructure and desktop support, and cybersecurity for state agencies. Mach explained the agency is financed primarily by chargebacks: agencies are appropriated money and NDIT invoices them monthly for services. “We are funded as part of a chargeback,” Mach said, adding the process requires agencies to know IT costs years before the biennium begins.

Hoffman told the committee how the chargeback is built. NDIT combines vendor costs, staffing, infrastructure and overhead into service fees and publishes rates in April of even‑numbered years; those rates take effect the following July and govern the two‑year biennium. Fees are billed on agreed metrics — per user, per device or per connection — and agencies can drill into invoices electronically. “We have to charge, one agency the same rate for the same service as another agency,” Hoffman said, noting federal accounting rules constrain how rates may be allocated across general, special and federal funds.

Both senior leaders said the chargeback model creates duplicative appropriation signals: the legislature appropriates money to agencies, which then pay NDIT; some of those costs are effectively double‑counted. NDIT proposed identifying systemwide expenses that could be funded with a general‑fund appropriation to reduce agency rates. Mach and Hoffman said they plan to pursue a limited pilot in the next biennium that would general‑fund one or more services and test “show‑back” accounting so federally funded agencies still reimburse their share of costs without driving inconsistent rates.

The committee heard operational details and pain points: setting rates for the 2025–27 biennium started in early 2024, but the rates agencies use to prepare budgets can be based on assumptions made 30–42 months before the last invoice is sent. Hoffman warned vendor pricing volatility can change the forecast; he said recent Hewlett‑Packard notices indicate hardware fees could rise by roughly 9–14 percent. He also described NDIT’s ticketing and intake process for daily support and a queue and prioritization process for larger development projects.

Cybersecurity was a sustained topic. Mach described how NDIT’s security team detected and performed forensics after a multi‑state incident involving PowerSchool — a third‑party student information product — and then coordinated outreach with K–12 district IT offices and DPI to start remediation and account security steps. The agency said federal funding after COVID accelerated its cybersecurity investments and created a “whole‑of‑government” security program.

Committee members pressed for more detail on staffing and funding mixes. Mach said NDIT has roughly 500 employees across its divisions and that the two largest divisions are business applications and technology/desktop support. Hoffman said NDIT keeps limited operating balances consistent with federal OMB 87 rules and that the agency does not operate to generate profit — it must break even. The pair said some work is contracted when internal staff cannot fill needs or incidents require surge capacity.

NDIT also described prior procurement research. Hoffman said a March 2024 request for information for a managed voice service produced only one complete cost proposal; vendor staffing estimates were materially higher than current state staffing costs for the same work. He said NDIT will continue pursuing RFIs to evaluate cost reduction opportunities but that vendor transition costs and multi‑year contracts complicate vendor swaps.

Mach and Hoffman told the committee they will pursue a combination of: (1) agency meetings to get earlier IT planning input, (2) targeted pilots to general‑fund selected services while preserving show‑back to federal and special funds, and (3) continued rate‑setting improvements to reduce surprises for agencies. No formal committee action or vote occurred; the discussion centered on options to simplify funding and reduce rate pressure on agencies.

The Appropriations Committee indicated interest in exploring a pilot and asked NDIT to provide further breakdowns of staffing by division, the portion of spending billed to federal versus state funds, and options for continuing appropriations and selected general‑fund pilots.","mediaType","Video","parentTitle","House Appropriations 03/05/2025","oneSentenceSummary","Corey Mach, chief information officer for the state of North Dakota, and Greg Hoffman, deputy CIO and CFO for the state IT department, told the House Appropriations Committee that the agency’s chargeback funding model forces agencies to budget IT costs years in advance and proposed a limited pilot to general‑fund selected services and lower agency rates.","taxTitle","Appropriations, House of Representatives, Legislative, North Dakota","taxId",28310,"location","North Dakota","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6297378,"University system reports enrollment gains, presses legislators for targeted funding for workforce, research and capital",6516,5896000,12412000,"/Search/View?dp=1&key=2510148-6d08a65f1f1f9053775e8942589aa52e&start=5896&end=12412","https://assets.pipeline.soar.com/2510148-6d08a65f1f1f9053775e8942589aa52e/thumbnail_5896000.jpg","/articles/6297378/North-Dakota/University-system-reports-enrollment-gains-presses-legislators-for-targeted-funding-for-workforce-research-and-capital","https://secure.pipeline.soar.com/6297378-1a43a11aa7b5d06b7963ffe0a128b286/orig.mp4?Expires=1771292625&Signature=j-HxcFOYt0Nwm-bjE3d3MVqYF-m892fIzcgWu~uc2qgl-NnjzPwCWyXhSU-KJM631rX9665lpKpduVtpKRDjmWI1iTRlFGRXntzjANKY~H45Cx1aBurxPuMPQIxzsFtY4y~Ri1y~QuDKR~~DNpvOCDwh6aQSsyywVUGURnIZFMPpfuzLbPUgk4hF60Xn4U6R9-QKea0CzpXJjZ3WDK6ntdQ9h4OSRoFCTm3stacUJvIwzl~nO~WsdFzKLKH1iucYht6Ci2E0QRBheqlCC5f4xTNvageI~ngoD1yXa0rYekjenupqBd4J5b795LeyPN3e246KVPgnripGIFESRYJr9Q__&Key-Pair-Id=KUT5TJCACFTXG","Kevin Black, a member of the State Board of Higher Education, and Chancellor Mark Hager presented systemwide results and priorities to the House Appropriations Committee and said the system is focused on workforce, research and affordability.

Board member Kevin Black said the system’s strategic plan, Envision 2035, centers on workforce needs in energy, agriculture and health care, growing research capacity, and public‑private partnerships. “We need to find ways in higher education to make AI practical, understandable and applicable,” Black said, arguing the state should prepare graduates to use and support advanced technologies.

Chancellor Hager reported the system is seeing growth: enrollment and FTEs are at the highest levels in several years, graduation rates improved and FAFSA completion rose after state coordination with K–12 and campuses. Hager highlighted the system’s reputation for campus civility during national campus tensions: “In North Dakota, our campus is known for civility and kindness,” he told the committee.

Leaders described a lengthy list of budget requests and changes under consideration in Senate Bill 2,003. The board emphasized the importance of challenge grants (the Senate version included $25 million, compared with higher proposals in the governor’s plan), and asked for support of targeted workforce innovation grants, high‑performance computing, and capital projects. Key details presented by university finance staff and the system office included:

- Funding formula and credit weights: the system’s funding formula translates completed credit hours into weighted credits; preliminary calculations for the 2025–27 base showed institution‑level adjustments tied to weighted credits and a minimum‑payable floor (a 96% floor to prevent abrupt drops). The system asked the committee to consider rate equalizations and targeted adjustments for specific program weightings.

- Specific adjustments included a $1.5 million appropriation to address a Dickinson State change in the credit completion factor, $1.2 million for Lake Region State College after moving two programs into the CTE cluster, and $13.6 million for NDSU’s professional pharmacy weighting change (Senate language changed the program weighting). Committee staff said they will show detailed line‑by‑line calculations in division work.

- Program and operating requests: the system asked for funding for nursing simulation equipment and faculty, continued funding for the Dakota Digital Academy and the statewide longitudinal data system, workforce education innovation grants for smaller institutions, and two institutions’ requests tied to national security and research infrastructure (UND and NDSU). The Senate included funding increases for a mix of those items.

- Shared services and enterprise systems: Core Technology Services (CTS) urged a cloud‑readiness investment and presented a multi‑year enterprise resource planning (ERP) modernization plan; the system office requested $10 million for cloud‑readiness work to prepare PeopleSoft‑based systems for a cloud transition.

Board members and campus leaders highlighted dual credit and workforce alignment as priorities: several campus speakers and trustees urged flexibility to expand dual‑credit offerings, better k‑12/higher‑ed alignment and stronger employer partnerships so more students can earn stackable credentials and enter high‑demand jobs quickly. Student Association President Sammy Weber told the committee affordability, on‑campus housing quality and access to mental‑health services remain top student concerns.

Finance staff provided the committee with a detailed breakdown of Senate Bill 2,003’s changes; the Senate version funds a selection of the board’s requests including challenge grants at $25 million, high‑performance computing at $2 million, $12 million for UND’s national security initiative and $12 million for NDSU’s research initiative. No final appropriation was made in the committee; divisions will review specific line items and the committee requested supplemental spreadsheets showing how the funding‑formula calculations produced institution allocations.

Committee discussion focused on duplication of programs across campuses, maintaining affordability, how to expand dual‑credit without reducing program quality, and the need to measure return on investment for public‑private partnerships and challenge grants. Presenters committed to providing more detailed worksheets and program‑level data in the division hearings that follow.","Kevin Black, a member of the State Board of Higher Education, and Chancellor Mark Hager told the House Appropriations Committee enrollment, FAFSA completion and graduation rates are improving systemwide and outlined the board’s budget priorities for workforce training, research infrastructure and targeted capital investments.","actionData","errors"]

Article not found

State IT leaders defend chargeback model, propose hybrid pilot to reduce agency IT rates

University system reports enrollment gains, presses legislators for targeted funding for workforce, research and capital