Statewide cost allocation (SWICAP) explained: how central‑service bills shift across agency budgets

Jared Tetrault told the Joint Finance and Appropriation Committee on Jan. 7 that the statewide cost allocation plan (SWICAP) establishes how central‑service costs are recovered across state agencies and fund sources and that the results appear as routine adjustments in agency budgets.

Tetrault described SWICAP as two things: a formal allocation document prepared by the Division of Financial Management and a set of budget adjustments that the committee reviews. “For Idaho,” he said, the Division of Financial Management submits the plan to the federal cognizant agency (HHS) and the plan explains how the state shares the costs of central services such as the attorney general, state controller and state treasurer.

The committee heard that the plan’s mechanics differ by central service: attorney‑general costs are allocated largely by billable legal hours (excluding criminal work), controller costs by accounting transactions and number of active employees per pay period, and treasurer costs by the number of warrants issued. Tetrault said the allocation is intended to be equitable so an agency that consumes 1% of a central service’s time pays roughly 1% of that cost.

Because the plan compares actual activity in a completed fiscal year to the prior appropriation, the budgeting effect follows a two‑year cycle. Tetrault told members that fiscal activity in 2023 is reflected in the 2025 budget cycle, so agencies and the committee commonly see a two‑year lag between the activity that generated costs and the year when recovery appears as a budget adjustment.

Tetrault showed the committee program‑level dollar examples from the most recent cycle: the office of the state controller had been appropriated about $4,800,000 in 2023 for central‑service work and is generally expected to recover most of its costs through SWICAP billings as agencies are charged; the state treasurer’s recoverable amount was shown at about $966,000; and the attorney general’s recoverable costs were shown in the example near $14,000,000 (with exceptions for criminal work). He said the total program that SWICAP affects can be roughly $7,978,000,000 when all agency appropriations and fund sources are included; committee members were told that the line‑item effect the committee reviews is typically just the net change from year to year.

Tetrault also described “direct billings” that appear in agency appropriations for items such as risk management (insurance), building services for the Capitol Mall, legislative audits and state IT services; these appropriations ensure agencies have authority to pay risk or rent bills that are billed centrally. He said those direct billings can both increase and decrease year to year; for example, he expected LSO audit billings to fall from about $1.5 million to about $1.1 million based on current calculations.

The presentation concluded with an offer to provide more detailed breakout reports on personnel, liability and IT billing if committee members want the underlying data for particular agencies.

Ending: Committee members thanked Tetrault and said the SWICAP mechanics will become clearer as agency budget presentations and work‑group reviews proceed.