Statewide cost allocation explained: central services billed across agencies; $70–80 million moves through budget

Jared Tetrault briefed the Joint Finance and Appropriations Committee on Jan. 7 on the mechanics of the statewide cost allocation plan, commonly referenced in agency budgets as SWICAP. He described SWICAP as a two-part process that both documents how the state proposes to allocate central-service costs to federal and dedicated funds and creates the budget-year adjustments visible in agency appropriations.

Tetrault said the Division of Financial Management prepares a SWICAP document that the federal cognizant agency (for Idaho, Health and Human Services) reviews. The plan describes how the state will allocate central service costs — such as legal services, payroll and accounting from the attorney general, state controller and state treasurer — to eligible state funds and programs. “It’s a partnership to say we’re gonna share those costs and we’re gonna make sure they’re shared equitably and fairly,” he said.

He explained the common drivers that determine each agency’s share: attorney general billings are largely driven by billable hours (excluding criminal division hours), the state controller’s portion is driven by accounting transactions and the number of active employees in pay periods, and the state treasurer’s allocation is tied to the number of warrants issued. SWICAP calculations use actual activity from a prior year; appropriations provided in year X are recouped in year X+2, so there is a standard two‑year lag between services provided and budget adjustments.

Tetrault walked through recent dollar examples: he said the controller’s 2023 appropriation was about $4,800,000 and estimated recoveries were planned; the treasurer’s 2023 recoverable costs were cited at about $966,000; the attorney general’s recoverable costs were listed in the transcript at about $16,000,000 to $14,000,000, and the combined general-fund appropriation to those central agencies was roughly $21,800,000 with about $19,800,000 recovered to date. He said overall SWICAP-related base program totals approach several billion dollars when the broader set of billings is included and that the budget book shows only the annual net change each year.

Tetrault also described “direct billing” items that appear inside agency appropriations — for example, risk management insurance, building services, information-technology service fees and billing for legislative audits — which ensure agencies have the appropriation authority to pay centrally managed costs such as liability insurance or ITS service fees. He noted recent changes: audit billings were expected to drop from roughly $1.5 million to about $1.1 million based on audit calculations, risk-management billings were projected down from about $18.3 million to $16.2 million, and ITS billings from about $39.7 million to $36.8 million.

Committee members were reminded that SWICAP calculations can create net increases or decreases at the agency level depending on how activity changed across the state. Agencies may challenge splits and provide proposed adjustments to DFM and LSO before the committee receives recommended appropriation changes. Tetrault told members the statutory authority for the SWICAP approach was in Idaho code (cited in the presentation as 67 35 31).