NDIT is primarily funded by Special Funds. Government and educational entities pay NDIT for technology services with money allocated in their budgets by the legislature. NDIT itself is an internal service fund operating from a revolving cash fund. Federal regulations prohibit NDIT's Total Net Assets from exceeding two times its average monthly expenditures.
NDIT generates monthly billing at the beginning of each month for services provided during the previous month. The services are divided into Data Processing, Telecommunications, and Micrographics billing statements.
In April of every even-numbered year, NDIT establishes budget rates from the upcoming biennium. These rates generally do not increase during the biennium because agencies do not have the ability to request additional funds. However, if costs for providing service decreases, NDIT may reduce its rates.
Effective October 1, 1998 the allowable portion agencies may apply towards the NDIT billings when charging federal programs is 100% for all bill codes. In July 1998 NDIT met with a representative from the Cost Allocation Division of the US Department of Health and Human Services. It was determined that the rates NDIT charges do not include any unallowable costs and that NDIT's retained earnings fall within the acceptable limits found in the Cost Principles for State and Local Governments (Circular A-87).