Statewide cost allocation explained to JFAC: how central service billing affects agency budgets

Jared Tetrault of the Legislative Services Office briefed the Joint Finance and Appropriation Committee on Jan. 7 on the statewide cost allocation plan (SWICAP), explaining how central service agency costs are recovered and how those allocations appear in agency budgets.

Tetrault said SWICAP is both a written plan that the Division of Financial Management submits to the federal cognizant agency (for Idaho, Health and Human Services) and a process that produces budget adjustments. “We need a state controller, and we need accurate payroll and accurate accounting… 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.

Under the plan, costs for central service agencies such as the Office of the Attorney General, the Office of the State Controller and the Office of the State Treasurer are allocated to eligible state entities based on formulas tied to billable hours, payroll activity and warrants issued. Tetrault said that in practice the plan operates on a two‑year lag: costs appropriated in one fiscal year are allocated based on actual usage and then considered in the budget two years later.

He described two SWICAP components that appear in agency budgets: central service fees from the attorney general, controller and treasurer, and “direct billings” for agencies such as risk management, building services, information technology and Legislative Services Office audits. Tetrault said direct billings give agencies the appropriation authority they need to pay recurring charges such as insurance premiums, building rent and audit recoveries.

Tetrault gave numerical examples of recent allocations. For the 2023 to 2025 cycle, he reported the controller’s appropriation as roughly $4,800,000 and the treasurer’s around $966,000; the attorney general’s billable recoveries were shown in the roughly $14–16 million range. He said most years the controller’s and treasurer’s costs are nearly fully recovered, and about 80% of the attorney general’s central service appropriation is recovered and deposited back to the general fund; the combined general‑fund appropriation cited was about $21.8 million with approximately $19.8 million recovered.

Tetrault also listed recent direct‑billing baselines and adjustments: Legislative audit billings were about $1.5 million and expected to decline to about $1.1 million based on current audit calculations; risk management base billing was roughly $18.3 million with a proposed change to about $16.2 million; Information Technology Services billing was shown at $39.7 million expected to decrease to $36.8 million; other central services were cited near $20 million to $24 million. He said the total program impact across all affected agencies in the presentation amounted to about $7.978 billion when aggregated across state funding sources.

Tetrault said SWICAP adjustments usually show up in the budget book as a set of line items that increase or decrease an agency’s general and federal fund appropriations depending on usage; agencies can contest allocations with DFM during the reconciliation process, and the committee ultimately appropriates the recoveries. He emphasized that the plan seeks to keep cost sharing equitable and to ensure agencies have sufficient authority to pay central services rather than facing gaps in coverage.