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State of Ohio - Controlling Board Request
STATE OF OHIO
CONTROLLING BOARD
30 East Broad Street, 34th Floor
Columbus, Ohio 43215-3457
(614) 466-5721 FAX:(614) 466-3813
FUND/APPROPRIATION REQUEST Controlling Board No.
DAS0100971
Status:  Approved
Meeting Date:  2/26/2018

GENERAL INFORMATION

Agency
Administrative Services


Division/Institution
Ohio Office of Information Technology

Authorization Requested Pursuant
to Revised Code Section 131.35
Increase Appropriation Authority
Create a New Fund
Establish Appropriation Authority
Fiscal Year(s)
2018-2019
Bill No.
H.B. 49

FUNDING INFORMATION
Fund
Group
Fund
Code
Appropriation
Line Item
Fund/Appropriation
Line Item Name
FYCurrent Appropriation AmountAmount of Increase or New Fund Total
Appropriation Amount
1330 100607 IT Services Delivery 2018
2019
$127,132,306.00
$0.00
$24,754,000.00
$0.00
$151,886,306.00
$0.00

SIGNATURES
     
Robert Blair 02/26/2018
   
Agency Director or Authorized Agent On The Date Of
   
02/08/2018 Christine Morrison
   
Date Controlling Board President/OBM Director
   
AGENCY CONTACT
Name:  Jennifer Leymaster Title:  Chief Financial Officer
Phone:  (614) 644 - 9653 Fax:  () - E-Mail:  Jennifer.leymaster@das.ohio.gov
REQUIRED EXPLANATION OF REQUEST
  The Department of Administrative Services respectfully requests Controlling Board approval to increase appropriation authority in the amount of $24,754,000 for FY18 in Fund 1330, ALI 100607, IT Services Delivery.  
  In FY 2013, the Department of Administrative Services Office of Information Technology (OIT) implemented an IT Optimization strategy to modernize the way the state does business. This effort has transformed state IT infrastructure into a consolidated and uniform design that can leverage common tools and shared resources, enabling the state to reduce enterprise spending on IT infrastructure by more than $160 million when compared to pre-optimized spending levels.

This fund gets revenue from charges billed to agencies for many different IT services OIT provides to them. As agencies have become more reliant on DAS OIT for IT services, we incur the increased cost of providing that additional support. In general, the requested appropriation increase in the DAS OIT budget will act as a pass-through that enables DAS OIT to provide services and pass the costs along to agencies - reflecting the economies of scale made possible by IT Optimization activities - through charges that are already accounted for in agencies' operating budgets.

When DAS put together its budget request, we estimated the amount of IT services we would provide to agencies and the costs necessary to provide those services. The nature of IT projects is such that they do not necessarily follow the anticipated schedule. As a result, while the changes described above have successfully led to gains in efficiency and reliability and savings at the enterprise level, it is challenging to project the precise amount of funding needed and when for the state's evolving central IT costs in the context of the normal biennial budget request cycle.

Approval of this request will not increase the FY 18 IT service rates that DAS charges its agency customers.

IT Optimization is driving changes in the services we deliver, how we deliver them, and to whom we deliver them. Within this dynamic environment, we can now determine that we have appropriation needs in the current fiscal year due primarily to these factors:

- More than 6,000 agency servers have been migrated from siloed environments to the state's centralized, virtualized environment, which requires increased data center management services and costs. As server migration does not always follow a predictable schedule, the cost of supporting some of these additional servers was not factored into the FY 18 appropriation request.

- We have experienced higher-than-anticipated demand for certain services, such as storage and mainframe services and the corresponding customer service center support, from more state and local government customers than were projected. These customers include some state higher education institutions. DAS OIT is pleased to share the benefits of consolidated IT service delivery with these customers but requires appropriation authority to support that increased demand.

- A portion of the requested increase will fund hardware refreshment and related maintenance for the state's consolidated OneNetwork service. This amount was inadvertently omitted from the FY 18 appropriation request. Another portion of the requested increase will fund a contractual increase in the state's enterprise office productivity software, Microsoft Office 365.

When the cost impact of IT Optimization activities on the next fiscal year can be more precisely estimated, we will return to the Controlling Board to request a similar adjustment to the FY 19 appropriation for this line item.

 
   
Attachments Controlling Board Request No.: DAS0100971
Attachment TypeAttachment Description
Other FY12 and FY17 State IT Spending

Fund/Appropriation Request 
Required Information
Controlling Board Request No.: DAS0100971
1. Identify the source of additional revenue (e.g., increase in fee, increase in state or federal grants, etc.).
  Revenue is received through monthly or quarterly billings for services.
   
2. If applicable, explain why creating and/or increasing a new fund and/or line item is more appropriate than depositing the revenue into an existing fund and increasing the appropriation authority of an existing line item.
  NA - 1330 is an existing fund.
   
3.
Time line: Has the revenue been received? No
 
When is the revenue expected to become available? DAS OIT receives revenue monthly or quarterly as agencies are billed
4. For federal funds only, provide the following information:
 
a. Grant identification number from the Catalog of Federal Domestic Assistance:
b. Amount of state matching funds required: 0
c. Source (appropriation line item) of that match:
d. Statutory or executive authority for participation in the program:
  Include a brief summary of the text or a copy of the reference.  
 
   
5. How will the additional appropriation and/or cash be used?
  Additional appropriation will be used to continue the operations of IT Services which includes maintenance, software and hardware support and licenses.
   
  Provide the following information below relative to this budgetary adjustment. NOTE: If a new fund and new appropriation authority are being requested, the "Current" and "Requested" columns are not required.
 
Account Category Account Category Description Current Appropriation Authority Requested Increase in Appropriation Total Appropriation Authority
500   Personal Services - Payroll   $25,615,495.00   $0.00   $25,615,495.00
510   Purchases Personal Services and Others   $32,111,840.00   $2,178,000.00   $34,289,840.00
520   Supplies and Maintenance   $67,400,308.00   $19,408,000.00   $86,808,308.00
530   Equipment   $2,004,663.00   $3,168,000.00   $5,172,663.00
550   Subsidies and Shared Revenue   $0.00   $0.00   $0.00
570   Capital Items   $0.00   $0.00   $0.00
590   Judgements, Settlements and Bonds   $0.00   $0.00   $0.00
Other   Other   $0.00   $0.00   $0.00
Total: $127,132,306.00 $24,754,000.00 $151,886,306.00
   
6. For each additional amount shown in the table, provide a short description of what the dollars will be used to accomplish. For example, if increasing a subsidy account category, provide detail on the added recipients or the allocation formula for distribution of moneys. For Account Category 500, respond to specific questions in number 9 below.
 
Account Category Short Description
500
510 Various purchased personal services
520 Equipment and software maintenance and licensing costs
530 Various pieces of equipment
550
570
590
Other
   
7. Will this transfer be used to maintain current service levels, expand an existing program or activity, or begin a new program? Explain.
  The funding will be used to maintain current service levels as the services supported by OIT continue to grow.
   
8. Based upon the response to number 7, explain how these services or programs would have been funded if this
additional funding were not available.
  They would not be funded.
   
9. Account Category 500-Personal Services:
 
a. Explain why changes are being requested in the personal services account category 500.
b. How many existing staff are being affected by this transfer? 0
What appropriation line item are they currently being paid? 
c. How would these existing staff have been affected if these additional funds were not available?
d. Will new staff be hired as a result of the additional funds?  No
   
10.  List any other transfers involving these appropriation line items and/or cash approved by the Controlling Board in the current biennium, including the date and requested amount of the adjustment(s).
 
ALITransfer DateTransfer AmountCBR Number