COBI 2015 - ISF - Human Resource Management

Overview
Issues
Performance
Background
Financials

Sources Uses

FY 2016 Appropriation

The ISF operated by DHRM provides consolidated services to all state agencies. The ISF has three programs: Field Services, Payroll Field Services, and Legal Services.

Funding History

Related Publications

DHRM Proposal to Shift Costs

Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $12,678,600 from all sources for ISF - Human Resource Management. This is an 8 percent increase from Fiscal Year 2015 revised estimated amounts from all sources.

Staff Analysis

The Department of Human Resource Management (DHRM) is comprised of a single appropriated line item and an internal service fund (ISF). The ISF provides field office services and payroll services for state agencies, and collects agency contributions for Attorney General legal services. As both the appropriated line item and the ISF provide statewide service, it is often difficult for the department to determine which line item should be charged for which expense. This has resulted in annual expense transfers between the line items.

In order to simplify financial accounting and streamline statewide processes, DHRM and the Governor's Office of Management and Budget (GOMB) have recommended shifting the Administration, Policy, and Information Technology programs into the ISF. This would require rate adjustments, as well as a new rate for Core IT systems, to capture the $2.5 million ongoing that would return to the General Fund. If the Legislature were to appropriate this ISF impact based on current funding spreads, it would result in a net ongoing savings to the General Fund of $1,125,300. The fees listed under the Financials tab reflect those required to fund this transition. The analyst recommends shifting these programs to the ISF and approval of the fees listed on the Financials tab.

For the FY 2016 base budget, the Analyst recommends approval of estimated revenues of $12,054,600 and 142 FTE for the DHRM Internal Services Fund. Should the Legislature approve shifting the above mentioned programs to the ISF, appropriations and additional FTE will be included in a subsequent appropriations act.

Balanced Retained Earnings

While some retained earnings are necessary for an ISF to cover any unforseen costs fluctuations, the amount of retained earnings itself should not fluctuate much. If retained earnings continually grow or shrink, the ISF is over charging, or under charging, for its services and needs to re-evaluate its rate structure.

DHRM Retained Earnings Balance

Core Agency Employees per HR Field Staff

In order to measure ISF efficiency, DHRM tracks the ratio of HR field staff to core agency employees. In FY 2014, there was one HR field staff for every 133 core agency employees. Core Agency Employees per HR Field Staff

Customer Satisfaction

Every year, DHRM sends out a customer satisfaction survey to the state agencies for which it provides service. This survey is designed to measure how well DHRM is meeting their mission as well as to identify areas for improvement.

DHRM Customer Satisfaction Survey Results

Statute

UCA 67-19-5(6) allows the department to operate an internal service fund in accordance with UCA 63J-1-410 for the human resource functions the department provides.

In order to control the size, mission and fees charged to state agencies, the Legislature imposed 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, FTE, capital acquisitions, rates, fees, and other charges; published the annual rates and fees in an appropriations act; and appropriated the ISF's estimated revenue.

Working capital for operations must be provided from the following sources in the following order: 1. Operating revenues, 2. Long-term debt, and 3. Appropriations 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 and the deficit working capital is greater than ninety percent of the value of the ISF's fixed assets.

Rates are based on a detailed analysis of the costs of providing human resource functions statewide. The intent behind creation of the ISF was to save money or at worst be revenue neutral with improved coordination and control.

Display By:

Program

Funding Source

Expenditure Category

Appropriation Type:

Appropriation History by

Programs	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
ISF - Field Services	9,674,300	9,481,600	10,096,000	11,124,500	11,635,700	(1,213,400)	10,422,300	1,026,900	11,449,200
ISF - Payroll Field Services	580,100	549,700	453,100	0	0	860,300	860,300	(84,400)	775,900
ISF - Core HR Services	0	0	0	0	0	0	0	0	0
ISF - Legal Services	0	450,000	0	237,800	453,500	0	453,500	0	453,500
Total	$10,254,400	$10,481,300	$10,549,100	$11,362,300	$12,089,200	($353,100)	$11,736,100	$942,500	$12,678,600

Sources of Finance	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Dedicated Credits Revenue	0	0	0	0	0	0	0	624,000	624,000
Dedicated Credits - Intragvt Rev	10,254,400	10,481,300	10,549,100	11,362,300	12,089,200	(353,100)	11,736,100	318,500	12,054,600
Total	$10,254,400	$10,481,300	$10,549,100	$11,362,300	$12,089,200	($353,100)	$11,736,100	$942,500	$12,678,600

Categories of Expenditure	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Personnel Services	9,387,400	9,000,100	9,599,000	9,871,400	10,513,000	157,000	10,670,000	624,000	11,294,000
In-state Travel	10,600	11,000	9,400	14,600	15,000	(10,000)	5,000	0	5,000
Out-of-state Travel	10,400	9,800	15,500	15,300	30,000	(10,000)	20,000	0	20,000
Current Expense	358,100	1,141,800	537,300	478,700	974,600	(21,100)	953,500	(150,000)	803,500
DP Current Expense	549,800	919,500	796,100	740,900	515,900	253,600	769,500	0	769,500
DP Capital Outlay	0	0	(166,700)	0	0	0	0	0	0
Capital Outlay	13,500	9,400	18,200	0	0	0	0	0	0
Other Charges/Pass Thru	207,400	139,600	279,500	39,200	40,000	(4,500)	35,500	(5,000)	30,500
Depreciation	0	0	0	18,100	19,600	(19,600)	0	0	0
Total	$10,537,200	$11,231,200	$11,088,300	$11,178,200	$12,108,100	$345,400	$12,453,500	$469,000	$12,922,500

Show Table | Show Additional Information

Other Indicators	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Budgeted FTE	144	143.80	150.10	142	142	0	142	0	142
Actual FTE	113.87	118.30	124.80	123	0	0	0	0	0
Authorized Capital Outlay	0	54,300	0	0	0	0	0	0	0
Retained Earnings	3,130,300	2,388,500	1,544,500	1,728,300	1,210,200	(298,800)	911,400	(449,100)	462,300

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.