Officials explain statewide cost-allocation plan and how it affects agency budgets

Jared Tetrault, a budget analyst with the Legislative Services Office, told the Joint Finance and Appropriation Committee on Jan. 7 that the statewide cost-allocation plan (SWICAP) allocates central-service costs from the attorney general, state controller and state treasurer to eligible state agencies and fund sources, and that the process operates on roughly a two-year lag.

Tetrault explained that the Division of Financial Management compiles a formal SWICAP document that the state sends to its federal cognizant agency (Health and Human Services for Idaho) to justify how central costs will be shared for federally funded programs. The plan's purpose is to recover allowable central-service costs equitably so the state and federal grantors each bear appropriate shares.

Why it matters: SWICAP adjustments are routine but affect agency appropriations and can change line items for attorney general fees, controller fees, treasurer fees, information-technology services and risk-management billings. Because the plan uses actual activity from prior years, changes appear two years later in the budget cycle.

Tetrault said the central service agencies include the attorney general, the state controller and the state treasurer. He described three measurement bases commonly used: billable attorney-general hours (excluding the criminal division), active payroll counts for controller allocations and warrant counts for treasurer allocations. He said the process results in appropriation adjustments several years after the base-year activity: "There's always a 2 year lag." The committee was shown example amounts: the controller's 2023 appropriation reflected roughly $4.8 million in recoverable costs, the treasurer around $966,000, and attorney-general recoveries in the tens of millions (approximately $16 million in the referenced year).

Direct-billing items that routinely appear on agency budgets, Tetrault said, include risk management (insurance), building services for the capital complex, legislative audit billings and information-technology services. He noted that the governor's budget and agency submissions sometimes correct billing errors and agencies may contest allocations before the committee considers the adjustments.

Tetrault described how DFM calculates the percentages after each closed fiscal year and notifies agencies of the proposed adjustments by October. Agencies review the allocations and include the resulting adjustments in the following budget cycle. The analyst emphasized the intent of the program: "We need a state controller, and we need accurate payroll and accurate accounting just as much as you do when it comes to the expenditures of federal funds."

The committee heard that the SWICAP program's recovered amounts flow back into the general fund and that most controller and treasurer costs and roughly 80% of the attorney-general costs are typically recovered and deposited to the general fund. Tetrault said the total program budget affected by SWICAP and related direct-billing items exceeds several billion dollars and that line-item movements in the budget book often reflect only small net changes after offsetting increases and decreases across fund sources.

Ending: Tetrault offered to provide the committee a more detailed report with percentages and a breakdown by billing component on request; he said the office would prepare additional detail if members needed it while working agency budgets.