Cost Recovery Implementation Statement - Australian Government (Page 4 of 7) in pdf

3.3

Design of regulatory charges

Guide:

The level of information should be proportional to the complexity, materiality and sensitivity of the

activity, but should make clear the relationship between charges and costs of outputs/business

processes of the activity. Where it is impractical to list each charge, the charges can be grouped

but the basis for the grouping should be explained.

 Which regulatory charges (cost recovery fees and/or cost recovery levies) are used?

 Why was this type of charge chosen?

 How do the charges relate to costs of outputs/business processes of the activity?

 Where is the current schedule of charges published?

The relationship between charges and costs of outputs/business processes may vary, depending

on the type of charges. For cost recovery fees, include the methodology for calculating the fees,

supported by one or two examples. If more than one method is used, explain the differences and

why different methods have been used. For cost recovery levies, include the methodology for

calculating the levy, explain how it is distributed among levy payers (e.g. flat/tiered levy rates or

other proxy method). If using proxies, show how they reflect cost drivers. Provide examples of

calculating the overall and individual levy payments (see paras 88-95 of the CRGs).

Any expected exemptions and/or waivers in relation to charges should be identified, including

their policy rationale, statutory authority, and impact on expenses and revenue for the activity. If

entities are still expected to incur expenses in providing the activity to those who are exempt from

paying charges, funding source(s) for these expenses should also be identified.

Below is a possible presentation of the relationship between charges and outputs/business

processes of the activity. It should be modified to suit the activity.

 What are the charge rates and revenue estimates for the current budget year?

Charge

Type Rate

Estimated

Output

Business process

title

volume

total revenue

Charge 1 Fee

300

= $X × 300

Output 1

Business process 1.1

Charge 2 Fee

100

= $Y × 100

Output 1

Business process 1.2

Charge 3 Levy $Z

= $Z × 10

Output 2

Business process 2.1

Output 3

Business process 3.1

Business process 3.2

Business process 3.3

TOTAL

RISK ASSESSMENT

Guide:

Describe the risks of charging for the regulatory activity; these may be associated with the

complexity, materiality and sensitivity of the activity. Explain internal controls, systems or

procedures to identify and engage with risk at each stage of the cost recovery process. The

Charging Risk Assessment (CRA) tool and stakeholder feedback are useful means of identifying risks

(see paras 57–63 of the CRGs).

 What risks are associated with charging for the regulatory activity?

 How will the risks be managed?

Page 4 of 7

Cost Recovery Implementation Statement - Australian Government Page 4

Related Articles

Related forms

Related Categories