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Accounting office explains internal service funds; ADS seeks transfer to ease SLA arrears and billing shift
Summary
A Department of Finance and Management presenter told the Senate Appropriations Committee that a proposed FY26 general-fund transfer would allow ADS to shift roughly $15 million in SLA billed services into a headcount-based allocation in FY27 without double-billing agencies.
A Department of Finance and Management (DFM) presenter gave the Senate Appropriations Committee an overview of internal service funds (ISFs) and the rationale behind a proposed change in ADS's billing methods, telling senators on March 28 that the change is intended to reduce year-to-year volatility in agency IT charges.
The presentation distinguished allocation-based ISFs (usually headcount or transaction-driven allocations that spread shared costs across agencies) from demand-based ISFs (billing departments that actually use a service, such as fleet or copy center billing). The presenter described the "vision" fund (finance/HR system) as a hybrid that charges HR-related costs by headcount and accounting-system costs by transaction volume.
Why it matters: ADS currently bills a set of services on a service-level agreement (SLA) or demand basis. DFM staff said the FY26 SLA pot is approximately $30 million in…
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