Why Allocations Are Established (Guiding Principles)
Per the OFM 2016 Rate Fair handout, forWaTech, allocations exist for core IT functions such as: State network, Network Security, State Data Center Debt Service, Office of the Chief Information Officer, and Enterprise systems fee. Additional WaTech allocations are in the Central Services Model (CSM). All allocations adhere to guiding principles and require OFM approval to be established.
From time to time, WaTech may consider new allocations with the following criteria:
- The services are established and mature (costs are predictable enough to model and set)
- The services are used by most state agencies (or, should be)
- The services are foundational to the enterprise of the State's business.
When Are Allocations Established or Adjusted?
Each year as part of the regular budgetary process:
- OFM may adjust the number of budgeted FTEs in an agency in the Central Services Model if this adjustment will make a significant difference. Because some of the allocations are based on formulas using FTEs, this has a ripple effect on the amount billed each agency in an allocation.
- Either OFM or the Central Service agency providing services for a particular allocation may request an adjustment to the revenue, the customer base or the methodology of spreading the cost of the allocation.
- If neither party requests a change to the allocation and the allocation is part of the Central Service Model, it will be automatically adjusted only for FTE changes or Cost of Living increases.
Often a request to adjust necessary revenue will be due to the approval of a Decision Package/Funding Request for additional revenue by the Central Service agency responsible for the service. These adjustments can be seen in the Central Services budget instruction materials that OFM produces; this example shows adjustments made due to the enactment of the FY2016 Supplemental Budget.
Allocation Process Graphic Overview
This is a visual depiction of the process for establishing a Central Service Model allocation. Read more about Determining Allocation Amounts & Customer Base.