COMMITTEES   |   Federal Cost Allocation and Regulatory Reform Working Group

About the Working Group

Issue Statement: Each fiscal year, Congress appropriates funds for grants to state governments to further national goals, support delivery of federal programs and assist state government operations. Implementing these funded programs at the state level invariably requires the acquisition, configuration, deployment and maintenance of information technology (IT). The technology and services are purchased with federal funds by program agencies and must be allocated and accounted for under 2 CFR Part 225, Principles for State, Local, and Indian Tribal Governments (OMB Circular A-87). For nearly a decade, states have been optimizing these IT investments through consolidation strategies and leveraging common services to be more efficient and cost effective. Currently, federal regulations on cost principles and other regulations do not acknowledge this evolution in state IT business models. Clarity, consistent interpretation and flexibility in the use of federal funds for IT acquisition, operation and delivery of enterprise services are lacking. Regulatory reform is necessary.

Goals and Objectives: As a key NASCIO advocacy issue, the ultimate goal is a total rewrite of current cost allocation and other constraining regulatory provisions so it will be beneficial to the State CIO community. The objective of the work group will be to ensure that State CIOs and state cost allocation experts have the opportunity to deliberate, comment and help construct a focused report on the critical reforms that are required.

Deliverables: The working group will build on the efforts of the previous Ad Hoc Working Group and the AGA Partnership for Intergovernmental Management and Accountability and their A-87 working group. The key deliverable is an in-depth review and impact analysis of relevant sections of 2 CFR Part 225 (OMB A-87) with specific examples cited and with recommended language changes or deletions linked to each provision. In addition, related process and regulatory interpretation issues will be addressed beyond A-87, including specific federal agency regulations or guidance that thwart enterprise IT business models. This deliverable will be the foundation for future OMB discussions and federal agency negotiations. The work group will continue to partner with the AGA, as they seek to advance specific A-87 reform issues around finance and interest issues.

Committee Roster

Gloria Edmond, State of South Carolina Anne Fletcher, State of New Jersey Arlan Holmes, State of Missouri Barbara Hoover, State of New Hampshire David N Kroening, State of New York Leo Laporte, State of Michigan Todd Olson, State of Colorado

Dr. Craig P Orgeron, PhD, State of Mississippi Cindy Reed, State of Texas Steven Schafer, State of Nebraska Edward Shapiro, Commonwealth of Massachusetts Barbara Teusink, State of South Carolina Ann Timmons, State of New Jersey