Statewide cost-allocation (SWICAP) explained: how central service billing affects agency budgets

Jared Tetrault, budget analyst with the Legislative Services Office, gave the committee a high-level explanation of the statewide cost-allocation plan (SWICAP) on Jan. 7, describing how central-service costs are recovered from state agencies and how those adjustments appear in the budget book.

Tetrault said SWICAP is a plan prepared by the Division of Financial Management and submitted to the federal cognizant agency (for Idaho, Health and Human Services) to document how the state allocates central costs across eligible agencies and fund sources. In practice the plan ensures that costs for statewide services—principally the Office of the Attorney General, the Office of the State Controller and the Office of the State Treasurer—are distributed equitably to agencies that receive the services.

The part of SWICAP that most often appears in appropriations before this committee is the two-year recovery cycle: costs appropriated to central agencies in one fiscal year are measured and apportioned based on actual activity; those calculated recoveries are then applied as budget adjustments in the subsequent biennium for agencies that benefitted from the central services. "There's always a two-year lag," Tetrault said.

Tetrault summarized how recoveries are measured by central function: Attorney General charges are largely based on billable hours (with certain exceptions such as the criminal division), the State Controller allocation is tied to accounting transactions and the number of active employees per pay period, and the State Treasurer allocation is based on the number of warrants issued. He noted the plan excludes costs that are not statewide in nature.

Tetrault also outlined the direct-billing items that appear in agency budgets—risk management, building services (Capital Mall), the Legislative Services Office audit billings and Information Technology Services (ITS)—and provided the committee’s current estimates for those components. For example, audit-billing recoveries were about $1.5 million in the base and are estimated to fall to roughly $1.1 million in the next cycle; risk-management billings were about $18.3 million in base and are estimated to fall to about $16.2 million; ITS billings were about $39.7 million and are estimated near $36.8 million.

Tetrault provided several example figures from the 2023-to-2025 cycle to show the mechanics: the controller’s FY2023 appropriation for central services was presented as roughly $4,800,000 in his slide materials and the treasurer’s cost recovery figure was about $966,000; the attorney general’s recovered costs were in the multi‑million range. He said agencies receive DFM’s calculated allocation by October and can discuss splits between general, dedicated and federal fund sources before the budget is finalized.

Tetrault emphasized that recoveries generally return money to the general fund: agencies pay DFM and the payments are deposited back into the general fund so that costs are ultimately borne across state funds in proportion to activity. He also told members that adjustments in any one direction may sometimes reflect timing, workload shifts (for example, increased attorney-general hours for litigation), or one-time variations in agency transaction volumes.

Committee members asked clarifying questions; Tetrault said staff will follow up with more detailed reports by agency so work-group members can examine splits between general and federal funds.

No formal action was taken; the presentation provided context members will use as they review agency budgets and the SWICAP adjustments that appear in the legislative budget book.