Agency of Digital Services says year‑in‑arrears SLA billing drove $27.6 million in back charges; agency seeks more predictable model

MONTPELIER — Officials from the Agency of Digital Services told the House Appropriations Committee on Jan. 16 that a year‑in‑arrears billing model for IT services generated roughly $27.6 million in SLA (service‑level agreement) back charges for fiscal year 2024 and contributed to $2.6 million in growth from the previous year.

Kate Slocum, chief financial officer for the Agency of Digital Services, told the committee that ADS funds most operations through internal service funds and recoups costs through a mix of an "ADS allocation" spread across state headcount and consumption‑based SLA invoices. "The SLA...truly is a credit card," Slocum said, describing how agencies consume services during one year and receive an invoice months into the next fiscal year.

The nut graf: the billing timing and recovery model has made costs difficult for agency budget planners to predict, committee members said, and ADS officials described several near‑term steps and longer‑term IT projects intended to improve transparency and predictability.

ADS officials explained that the allocation line covers core, statewide services such as networking and cybersecurity and is billed early in the fiscal year; SLAs…