What is CDT Cost Distribution?
CDT Cost Distribution (service code Z901) is an expense line item billed to California Department of Technology (CDT) customers based on the amount of the customers total spending each month. This method is how CDT costs recovers the amount of administrative overhead expenses to provide services to our customers.
Services Recovered Through CDT Cost Distribution
CDT Cost Distribution recovers administrative overhead costs that support statewide service delivery.
These costs fall into two broad categories:
CDT Administrative Services
- Human Resources
- Rates & Cost Recovery
- Procurement
- Budget Development and Management
- Accounting and Financial Reporting
- Other administrative support functions
External Departmental Services
- Statewide Pro Rata (SWCAP)
- Government Operations Agency assessments
- Supplemental Pension Payments
Cost Recovery Target Calculation
CDT establishes an annual administrative Cost Recovery Target based on projected overhead costs. This target is evenly spread across the fiscal year to support consistent monthly recovery. The Cost Recovery Target is consistently monitored to ensure accurate cost recovery. If costs change during the fiscal year, the Cost Recovery Target is adjusted accordingly for the remaining months.
Cost Distribution Fee Calculation
Cost Distribution is recovered through a two-step rate application:
STEP 1 – Fixed percentage applied to pass-through services:
A fixed 3.5% Cost Distribution percentage is applied uniformly to all eligible pass-through service charges. The revenue collected from this step offsets a portion of the monthly Cost Recovery Target.
STEP 2 – Variable percentage applied to non-pass-through services:
Following the application of the fixed pass-through percentage, CDT calculates a single monthly percentage needed to recover the remaining Cost Recovery Target. This percentage is applied consistently to all non-pass-through service charges for all customers for the month. While the Cost Distribution on these services averages approximately 20% of a customer’s monthly invoice, the rate may vary month-to-month, including reductions in months with annual Microsoft Office 365 billing (Pass-Through).
See the Master Rates Table for applicable CDT Pass-Through Percentages.
More About CDT Cost Distribution
For questions, please contact ciobilling@state.ca.gov