Statewide cost allocation plan explained to JFAC: how central‑service charges flow through agency budgets

Jared Tetrault, budget analyst with the Legislative Services Office, briefed the Joint Finance and Appropriation Committee on Jan. 7 about the statewide cost allocation plan (SWICAP), explaining how central service costs are recovered and reflected in agency budgets.

Tetrault said SWICAP is a document the Division of Financial Management compiles and transmits to the federal cognizant agency (for Idaho, Health and Human Services) to describe how the state allocates central services across eligible funds and agencies. In the budget process, SWICAP adjustments typically produce appropriations or authority changes related to: attorney general legal services, the state controller’s accounting/payroll work, the state treasurer’s warrant processing, and several direct‑billing services such as risk management, building services, legislative audits and information‑technology services.

How it works: appropriations for central‑service agencies are provided in one biennium; the actual usage percentages (for example, billable hours or number of payroll employees) are calculated based on the completed fiscal year and then those percentages drive budget adjustments in the following biennium. Tetrault noted a roughly two‑year lag between the year costs are incurred and the budget year in which adjustments appear.

Numbers and examples: Tetrault presented recent figures showing the controller, treasurer and attorney general recovery calculations for FY2023 and explained that most controller and treasurer costs are fully recovered from agencies, while the attorney general typically recovers a smaller share (roughly 80% of AG costs in the example shown). He also noted direct billings for risk management (insurance) were about $18.3 million in base and expected to decline in the current cycle; ITS billings were approximately $39.7 million and similarly were expected to fall when the current adjustments take effect.

Why it matters: SWICAP ensures agencies receiving central services pay an equitable proportion of the costs, and the adjustments can move dollars among general, dedicated, and federal funds. Tetrault said the adjustments are visible in agency budget pages as line‑item changes (some up, some down) but that the committee is reviewing only the net changes as part of decision‑making.

Tetrault closed by offering to prepare a committee report with a more precise percentage breakdown on how central service costs are recovered across funds.

Ending: Committee members were invited to raise SWICAP questions during agency hearings; the plan and its calculations will be reflected in the agencies’ budget pages that JFAC members review as the session proceeds.