Return on Investment

Revenues and Expenses

Unlike most state departments and agencies, the ICN operates with fee-based revenues rather than General Fund appropriations. 

ICN runs the state-wide Network, which often exceeds 70 percent utilization, with 81 employees and has not received a general fund appropriation since Fiscal Year 2004 for the operation of the Network.  ICN’s financial statements are shown using Generally Accepted Accounting Principles (GAAP). As a government entity in a fee-for-service environment, ICN uses accrual accounting with a measurement focus emphasizing the matching of revenues with costs of services, including depreciation of assets such as network equipment and fiber.  To more accurately compare ICN’s financial position with other State of Iowa agencies, a Budget to Actual report is prepared to show the cash to be received and spent during the year.  To more accurately compare ICN’s financial position with other State of Iowa agencies, a Budget to Actual report is prepared to show the cash to be received and spent during the year.

Operating and Capital Asset Revenues

The Operating & Capital Asset Revenues graph illustrates the operating revenues and capital asset appropriations that ICN has received during the past five (5) fiscal years.

  • Capital asset revenues are appropriated from infrastructure funding sources such as the Technology Reinvestment Fund.  This ensures ICN eligibility to receive a portion of the Universal Service Fund.  An investment must be made by the State to receive reimbursements on behalf of Iowa schools and libraries. The Equipment Appropriation has provided that investment requirement allowing the ICN to receive approximately $1.7 million annually.
  • During this time frame, a majority of the operating revenues have been realized from the Network’s biggest users, State Government Agencies. 
  • Besides supplying the video and data services to authorized users, the ICN is the corporate telecommunications for the state government enterprise and provides line side telephone services on the Capitol Complex and other locations in the metro Des Moines Area.  
  • Government survivability is a priority. Capitol Complex redundancy for telecommunications services is available through the ICN.

Operating and Capital Asset Revenues bar graph
Asset Revenue details


Expenses by Vendor Type

The Expenses by Vendor Type graph demonstrates the monies that go from the State’s Network, that are received as user fees, and then distributed to private sector companies.

ICN relies on partnerships that have been created with various private sector companies to deliver services to authorized users.

  • The largest percentage of ICN expenses are the “last-mile” connections provided to ICN users by the private sector.
  • ICN also uses a private contractor for network maintenance. Their experience in staffing the Network Operations Center and delivering repair and maintenance services in the field is vital.

In many cases, the ICN is the broker that enables government, educational, and medical users to receive volume advantages that they would not receive otherwise.

  • ICN does not have the last mile connections linking the backbone to the authorized users in the communities. Private vendors have the advantage of working with one customer, the ICN, instead of a number of smaller organizations.

Expenses by Vendor Type bar graph
Expenses by Vendor Type details