Auditor-General’s overview

Setting and administering fees and levies for cost recovery: Good practice guide.

E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou

A public organisation needs to follow a robust process when it sets and administers a fee or levy for producing a good or providing a service. This is vital for ensuring the integrity of the charging regime.

Parliament, the public, and fee and levy payers need to have confidence that public organisations have the proper authority to charge the fee or levy, and that they are charging an amount that reflects the costs of producing the good or providing the service.

This guide provides guidance on settings fees and levies to recover costs. It is an update on the guide we published in 2008, and has been expanded to cover some levies as well as fees.

It also updates the principles that public organisations should consider when making any decisions on setting and administering fees and levies: equity, efficiency, justifiability, and transparency.

These principles apply equally to fees and levies. We have updated them to recognise changes in public expectations, particularly the need for transparency and engagement. Whether you are setting a new charge or reviewing an existing one, these principles should guide your decision-making.

This guide also sets out the matters that we expect public organisations to consider when calculating the costs of producing goods or providing services and setting charges to recover those costs.

Our guidance complements the guides produced by the Treasury and Taituarā – Local Government Professionals Aotearoa. Those guides provide further support and information, particularly on the policy processes that precede any decision on whether to charge for producing a good or providing a service and the amount of that charge.

I hope that this guide will help public organisations with the statutory authority to charge fees or levies to do so in a way that improves the trust and confidence of fee and levy payers, Parliament, and the broader public.

Nāku noa, nā

Signature - JR

John Ryan
Controller and Auditor-General

19 August 2021