IT department outlines continuing appropriation plan and chargeback tradeoffs

North Dakota Information Technology (NDIT) staff told the Legislature’s Information Technology Committee that the department’s 2025 budget changes—most notably continuing appropriation authority for an operating fund—are intended to reduce duplicative appropriations and improve responsiveness to agency needs. "It was an inefficiency and the incentive structure was, you know, it wasn't encouraging cooperation," NDIT Chief Information Officer Corey Mott said, describing the previous model where appropriations and internal chargeback authority were effectively duplicated. Why it matters: NDIT operates as an internal service provider that bills state agencies for IT services. Historically the biennial budget process required appropriations to agencies and separate authority to NDIT to bill and spend the same money; continuing appropriation authority lets NDIT spend certain client funds without a second appropriation and can shorten procurement and delivery times. NDIT and fiscal staff outlined a potential shift: general‑fund support for core enterprise services (leadership, enterprise licensing and basic infrastructure) while preserving chargebacks for agency‑specific or optional services. Officials said funding the base enterprise costs centrally could lower per‑agency rates and reduce the recurring narrative in appropriations hearings about why IT rates rise. "If we general fund some of those base costs... it gives more transparency because you're not hiding the costs of what that is across a portion of a rate that's paid by every agency," Deputy CIO Greg Hoffman said. Committee members and fiscal staff flagged complications: some agencies are largely federally funded or use a mix of federal, state and special funds; moving costs onto a general‑fund base could reduce federal drawdown or complicate compliance. NDIT noted federal rules limit how internal service funds may be used and the federal government monitors fund balances; NDIT must maintain a reasonable fund balance (federal guidance commonly allows up to about 60 days of operating cash). Staff said additional analysis is needed to test billing models, including showback approaches to preserve federal reimbursement, and to estimate budget impacts. The packet also included a recent financial statement showing NDIT’s operating fund had a fund balance of about $7.1 million at the latest monthly close. Next steps: NDIT will prepare pro forma options and work with agencies and the committee to model tradeoffs, including administrative costs to preserve federal billing and eligibility. The committee did not take formal action but directed staff to continue study and prepare detailed pro formas for the next meetings.