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2.8  Policy process and CRIS requirements

Policy process

An important part of the research and planning is establishing the process that the analysis and reporting will need to go through to give effect to any recommendations.

Depending on the specifics of the situation, a cost recovery analysis might need to go through several steps and iterations, such as reporting and briefing decision makers (such as Ministers and Cabinet on the outcome of the analysis, organising consultation with stakeholders, organising legislation or regulation (if it is required), making plans for implementation as well as ongoing monitoring and review. The exact process will depend on the specifics of the situation. Please contact your Vote team if you have any questions.

CRIS requirements

Two Cost Recovery Impact Statement (CRIS) templates have been designed to ensure that cost recovery regimes are based on sound analysis and assumptions and gaps are documented. More detail on the two CRIS templates and when they should be is in the overview section.

As part of fulfilling the CRIS requirements, entities will need to design a high-level cost recovery model at the point where the ability to cost recover is being considered by Ministers. Consultation with the entity's Finance and Operational teams will be required. The high-level model will then be outlined in the stage 1 CRIS.

The basic information required to develop a high-level cost recovery model are:

  • the policy outcome being sought
  • estimates of expenses and revenue for the activity
  • any underlying assumptions, and the way in which any changes to them might affect the financial estimates
  • providing incentives for efficiency in the delivery of the outputs
  • an indication of the outputs needed to fulfil the activity (such as the steps outlined in the example in section 4.1)
  • identification of some of the options for cost recovery charges, and
  • an estimate of the cost recovery charges.

Consideration should also be given to issues such as the degree of flexibility required in the policy design to enable the right degree of agility in the operational design (so as to not need to get agreement to policy change for minor changes to the operational design), and the way in which the entity will demonstrate transparency in pricing (for example, by benchmarking).

Once the initial policy has been agreed to, the high-level model will then form the basis of the detailed design of the cost recovery, which will then form the basis of the stage 2 CRIS.

The stage 2 CRIS is intended to work as a living document. When a cost recovery regime or fee level is reviewed, the stage 2 CRIS should be updated to reflect any changes that have happened since the initial analysis.

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