Many organizations collect fees from users on a regular basis to help fund business activity. Often, public organizations collect fees to support services that it provides to the community or province. Fee setting involves a review of current fees, and fee systems that are in place. It evaluates any changes that should be made to ensure proper cost recovery. This process entails an extensive review of current documentation and assignment fees, mapping of current and future states, research on similar organizations, developing a framework for rationalization, review of findings with staff, and in some cases the development of an activity based costing model.
Sample Acton Experience:
This Government Ministry collected a variety of fees to support services that it provides to Albertans. Acton provided a review of current fees for future rationalization purposes, as well as conducting research on similar organizations for comparison purposes.
Acton created a framework for the rationalization of the current fees, and produced an activity-based costing model to revise these fees. Acton also assisted with the development of a strategy for a systemic review of fee setting within the organization. This involved creating an inventory of the existing fees, the development of a revenue framework for the Department, identification of ‘at risk’ fees developed in the revenue framework, and provide guidance in the development for a strategy to address fee issues.
Acton worked with a Government Ministry to help develop a new process for how land leases and rents should be allocated. Acton helped to give the organization a better understanding of the cost of assignment fees using a systemic approach to calculate the assignment of fees for its leases.
Working with department staff, Acton reviewed current documentation and data, mapped the current and future-state processes, consulted with staff to obtain activity estimates and finally develop an activity-based costing model to develop assignment fees. Specifically, the calculation of leases will now be simplified, focusing on Provincial royalties rather than zones and assignment fees. As part of this shift, assignment fees will be charged back to the applicant as the cost of doing business.
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