Agency of Digital Services proposes $96.5M FY27 budget, shifts to predictable enterprise chargeback model

Kate Slocum, chief financial officer for the Agency of Digital Services (ADS), told the Senate Institutions committee on Jan. 27 that ADS has submitted a FY27 budget proposal of about $96.5 million and has reworked its finance structure to make IT spending more predictable for agencies.

"In '27, we are, we put forward a budget of, $96,500,000," Slocum said during the committee briefing, explaining that the single internal-service fund that previously covered most ADS costs has been broken into multiple funds to better reflect how services are consumed. She said the change is intended to make chargebacks clearer and to reduce a legacy pattern of deficit spending tied to timesheet and ad hoc billings.

The agency said it will establish several internal service funds, including a so-called "bespoke" fund of about $5 million to cover hardware and specialized software stock and an enterprise products fund for standard platform services consumed across the executive branch. ADS said moving consistent services into a core enterprise category lets the agency recover costs more predictably and reduces the year-in-arrears cover-the-deficit model that had grown hard to control.

Slocum also reported cumulative savings and cost avoidance that ADS attributes to consolidation and reuse: "Since the creation of our agency, we've been able to identify over $48,000,000 in savings and cost avoidance," she said, and that the agency continues to identify roughly $2.5–$3.5 million a year in efficiency gains.

ADS staff described legacy timesheet billing rates ($84–$88 per hour in prior documents) and said reliance on timesheet-based chargebacks produced an unsustainable deficit in some field services. Agency presentations discussed options including raising rates to better recover costs; presenters warned some transcript figures about the size of the deficit are inconsistent in the record and are noted in the clarifying details section below.

Committee members asked whether municipalities or other external customers could be charged for some services; ADS said municipalities already pay for certain licences and that the immediate goal is predictable recovery, not profit generation.

What happens next: ADS requested committee feedback and said the budget package will move through the administration and Joint Fiscal Office review. The presentation materials and an annual report are available to the committee for follow-up questions and deeper line-item review.