Internal Service Funds (ISF) employ business practices to provide a service or product for other state and governmental agencies. Typical services include motor pools, computer centers, mail processing, facility management, or other large functions that can be centrally coordinated. They are set up to take advantage of economies of scale, to avoid duplication of efforts, and to provide an accounting mechanism to adequately identify costs of certain governmental services.
During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $168,402,700 from all sources for ISF - Administrative Services. This is a 4 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $150,000 in new approprations from the General/Education Funds.
In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:
The following are performance measures tracked within this organization.
In order to control the size, mission and fees charged to state agencies, the Legislature imposes statutory controls (UCA 63J-1-410) that require ISFs to respond to the legislative budget process. No ISF can bill another agency for its services unless the Legislature has:
- Approved the ISF's budget request
- Approved the ISF's rates, fees, and other charges
- Published those annual rates and fees in an appropriations bill
- Approved the number of FTE as part of the annual appropriation process
- Appropriated the ISF's estimated revenue based upon the rates and fee structure
No capital acquisitions can be made by an Internal Service Fund without legislative approval.
No capital assets can be transferred to an Internal Service Fund without legislative approval.
Working capital for operations (defined as Current Assets less Current Liabilities less Long Term General Fund Borrowing) must be provided from the following sources in the following order:
- Operating revenues
- Long-term debt
- Appropriation from the Legislature
To eliminate negative working capital, an ISF may borrow from the General Fund as long as:
- The debt is repaid over the useful life of the asset
- The Division of Finance does not allow the ISF to have deficit working capital greater than ninety percent of the value of the ISF's fixed assets
ISFs operated by the Department of Administrative Services (DAS) provide consolidated services to all state agencies. DAS operates several ISFs that are funded by rates charged to state agencies and others:
- Division of Finance
- Division of Purchasing and General Services
- Division of Fleet Operations
- Risk Management
- Division of Facilities Construction and Management
The Legislature removed the Division of Information Technology Services (ITS) from DAS during the 2005 General Session and placed it in the new Department of Technology Services (H.B. 109). The change became effective on July 1, 2006 (FY 2007).
In the 2006 General Session, the Legislature changed the Office of State Debt Collection from an internal service fund to a restricted special revenue fund by passing S.B. 214, Office of State Debt Collection Amendments.
n the 2010 General Session the Legislature passed legislation (H.B. 402, Department of Administrative Services Modifications) allowing the department to change the operation of most of its divisions from appropriated to an internal service fund.
The Legislature intends that appropriations for Fleet Operations not lapse capital outlay authority granted within Fiscal Year 2015 for vehicles not delivered by the end of Fiscal Year 2015 in which vehicle purchase orders were issued obligating capital outlay funds.
SB0002: Item 198
The Legislature intends that the Finance Internal Service Fund Consolidated Budget & Accounting Program may add up to two FTE if new customers or tasks come on line. Any added FTE will be reviewed and may be approved by the Legislature in the next legislative session.
SB0002: Item 200
The Legislature intends that the Division of Fleet Operations discontinue charging agencies a flat rate for fuel, and that the fuel pass-through charged by the Division be actual cost as reflected in Senate Bill 8, State Agency Fees and Internal Service Fund Rate Authorization and Appropriations.
SB0002: Item 202
The Legislature intends that the DFCM Internal Service Fund may add up to three FTEs and up to two vehicles beyond the authorized level if new facilities come on line or maintenance agreements are requested. Any added FTEs or vehicles will be reviewed and may be approved by the Legislature in the next legislative session.
Dedicated Credits -- Intragovernmental Revenue come from charges to customer agencies. Premiums are collected by Risk Management for its insurance programs. Restricted revenue comes from the Workers Compensation Fund administered by the Division of Risk Management.
COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.