The following better practice checklist can be used for developing an effective fee-setting framework. Our listed expectations are not exhaustive and do not cover all of the requirements of government policies and instructions, but rather provide structured prompts to guide entities’ considerations.
|Better practice principles for fee-setting
|Policies and procedures
- ensure there is authority to charge fees through legislation
- develop an overarching fee-setting policy for the entity
- document the purpose, scope and desired level of cost recovery for each fee or fee group
- maintain a fee register in accordance with Treasurer’s Instruction 810.
- document the basis of the costing exercise and approach used
- develop a costing model for each fee or fee type
- document the assumptions and methods for calculating costs and revenue
- document all sources of cost and revenue information.
|Costing and pricing
- obtain actual cost information to input into the cost model
- allocate direct/indirect/capital costs based on approved assumptions and methods
- expected revenue
- level of cost recovery
- price to be charged
- obtain approval from the CEO and the Minister(s) for new and revised fees
- update subsidiary legislation through Gazettal.
- review fees at least annually
- every 3 years or after significant changes, conduct a full review of fees, including policies and procedures, and the costing model.
See also Figure 1 on page 3 for our ‘Better practice fee-setting framework’ diagram.