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Klamath County staff warn internal‑service charges, ERP rollout will squeeze departmental budgets
Summary
Finance staff told the budget committee that internal‑service allocations (HR, finance, IT) and ERP/Tyler implementation are driving internal charges; departments must budget accurately or face higher apportioned costs. The committee discussed reserves and the ERP go‑live schedule.
County finance staff described internal services as the consolidated place for HR, finance, IT and central administrative support and explained the internal allocation spreadsheet that assigns costs to departments based on recent year spending and turnover.
Staff warned that internal‑service fees can rise when departments over‑budget, because the allocation uses the most recently closed fiscal year’s budget as a baseline. The finance presenter said that inaccurate or padded department budgets increase internal‑service charges for everyone and urged use of the budget resolution process to adjust lines during the year rather than leave inflated budgets that raise fees.
The department also said an equipment reserve has been used to support the county’s ERP/Tyler implementation; go‑live for finance and payroll are targeted in the coming fiscal year (finance July 1; payroll possibly Oct. 1 or Jan. 1), and post‑implementation costs are expected to draw down reserves. Staff projected a reserve carryover of about $152,000 and budgeted $223,000 for remaining project costs.
Why it matters: Internal‑service allocations affect every county department’s effective cost of doing business; ERP implementation timing and reserve depletion could require budget adjustments across multiple funds. Committee members asked clarifying questions but did not take a formal vote during this segment.
