Fees and Charges
Source: data.gov.uk (2018-10-29)

CYC Internal Audit Reports 2017. These reports are presented to the Audit and Governance Committee for consideration, and are also included with the agenda papers for the [relevant meetings](http://democracy.york.gov.uk/ieListMeetings.aspx?CommitteeId=437). 

Reports are also grouped together by calendar year and published at this York Open Data platform. Reports for other years are available at the [__CYC Internal Audit Reports__](https://data.yorkopendata.org/dataset?q=internal+audit&sort=score+desc%2C+metadata_modified+desc) datasets.

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Fees and Charges 2016-17 
City of York Council 
Internal Audit Report  
 
 
 
 
 
 
Business Unit: Economy and Place 
Responsible Officer: Corporate Director of Economy and Place 
Date Issued: 12th October 2017 
Status: Final 
Reference: 10580/003 
 
Overall Audit Opinion 
Reasonable Assurance 
Actions 
0 
0 
P3 
P2 
P1 
2 
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Agenda Item 9

 
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Summary and Overall Conclusions 
 
Introduction 
Councils can charge for services delivered in order to raise revenue and to cover the cost of providing the service. The Localism Act 2011 
developed the powers that councils have in terms of fees and charges that were originally set down in the Local Government Act 2000. The 
amounts that can be charged are either set by the Government or the council and may be limited to cost recovery in order to avoid excessive 
charges being made to deliver surplus income for the council. 
 
The council has several fees and charges that are agreed each year by the Full Council as part of the budget setting report that is presented in 
February. The amount of money the fees and charges generate varies between £1k and £250k per year depending on the service. 
Objectives and Scope of the Audit 
The purpose of this audit was to provide assurance to management that procedures and controls within the system will ensure that: 
 
 Fees and Charges are correctly calculated on a regular basis. 
 
 The principals behind the Fees and Charges are understood and can be explained when necessary. 
 
The audit reviewed a sample of six fees and charges within the Economy and Place directorate. These were selected following discussions with 
the Assistant Director of Planning and Public Protection. The following fees and charges were reviewed as part of the audit: Animal Health, Court 
Cases, Premises Licence, xxxxxxxxxxxxxxxxxx, Private Taxi Hire Licenses and New Roads and Street Works. 
Key Findings 
The methodology behind the calculations for the fees and charges was generally understood by the Service Managers and the majority were 
correctly calculated, however, improvements could be made to support the business case behind them to ensure an appropriate level for the fees 
are set. The basis for including costs and monitoring demand for the service were not always known which meant it was not possible to confirm 
whether the fees were set at appropriate levels or whether there was justification to change their level.  
 
An annex has been included to provide details of individual fees and charges reviewed. 
Overall Conclusions 
The arrangements for managing risk were satisfactory with a number of weaknesses identified. An acceptable control environment is in operation 
but there are a number of improvements that could be made. Our overall opinion of the controls within the system at the time of the audit was 
that they provided Reasonable Assurance. 
 
 
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1 Business Case Supporting Fees and Charges 
Issue/Control Weakness 
Risk 
The business case to support the level of fees and charges was not always 
known. 
Charges are not being set at the optimal level. 
Findings 
Fees and charges can be set based on the costs involved in providing the service, the demand level for the service or because the fees were 
set based on political decisions that were taken either by the council or the government. The following issues were noted with the setting of the 
level of fees and charges. 
 
 The costs that were involved in setting the charges were not always known therefore it was not possible to confirm whether the fees that 
were set covered all the costs in providing the service. In particular it was not always possible to confirm whether indirect costs such as 
overheads, enforcement or costs from other services had been correctly included in the calculation.  
 
 The demand for the service was often based on historical assumptions that had no supporting evidence. For example fees were set on the 
basis that demand would not change because York was a popular tourist town. Although this would justify the assumption that demand for 
services wouldn’t fall it is not known whether the level of fees could be increased above what is currently charged based on the demand for 
the service. 
 
 In five out of six cases in the sample it was not known whether there was a surplus or deficit for the service or what level the surplus was 
even though in some cases it was likely to be quite large. In addition there was no adequate explanation for the surpluses or the political 
reasoning behind them. 
 
Agreed Action 1.1 
This has been shared with all Heads of Service across Economy & Place. They have been 
asked to consider the rationale for fees when setting as part of the next budget round. The 
primary focus will be on those charges that raise the highest level of fees. Managers are to 
consider costs, charges of other authorities and policy implications. 
Priority 
2 
Responsible Officer 
Corporate Director of 
Economy and Place 
Timescale 
28th February 2018 
 
  
 
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2 xxxxxxxxxxxxxxx 
Issue/Control Weakness 
Risk 
xxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx. 
Findings 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
Agreed Action 2.1 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx 
xxxxxxxxxxxxxxxxx 
Priority 
2 
Responsible Officer 
Corporate Director of 
Economy and Place 
Timescale 
30th November 2017 
 
 
 
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Annex 1 
 
 
 
 
Regulatory 
Charge 
2016/17 
Budgeted 
Income 
Comments 
Animal Health 
£9,820 
Due to the small number of animal establishments the amount of income generated is small and not material. The 
cost element has been calculated with a working paper to support this, however, the level of income has not been 
calculated. Given that the charges are included on the NL209 cost centre which includes ten other charges and 
therefore it is not known whether there is a surplus or deficit for these charges. 
Court Cases 
£14,410 
The basis for the cost element has been calculated appropriately. Income, however, has not been estimated 
because it is not possible to predict whether court cases will be successful or how the court will award costs. Given 
that the basis of the charge is that only costs relating to cases are recovered then a deficit will occur on this 
because not all prosecutions will be successful. However, the level of the deficit is not known because the income 
and expenditure relating to the entire service is included on one cost centre. 
Premises 
Licenses 
£249,560 The level of the charge is set by the Government with the methodology for the current level being introduced in 
2005. The amount of income is fairly fixed because the license fees are set by the Government with the number of 
licensed premises not changing significantly. However, the amount of administration and enforcement work is not 
known and it may not cover the level of income meaning there is a significant surplus. Given that the cost centre for 
the charge is NL209 and is shared with other charges the level of surplus is not known. 
Private Taxi 
Hire 
£192,100 The taxi account should balance to zero and although the surplus is quite high at the end of the 2016/17 financial 
year this is due to be reduced over the following three financial years. No significant issues were noted in settings 
fees or estimating the costs of the service. 
xxxxxxxxxxxxxx xxxxxxxx 
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx 
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx 
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx 
New Roads 
and Street 
Works 
£209,540 Some of the charges are set by the Government with others by the council, however, it is not known how the 
council's element was set as general overheads have not been apportioned to the relevant cost centre. The amount 
of income depends on the workplan that utility companies agree with the council and whether the utility companies 
follow this. There appears to be a surplus on this account but it was not possible to confirm the level of this surplus 
because the number of fines received from contractors for poor performance varies from year to year.   
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Annex 2 
Audit Opinions and Priorities for Actions 
Audit Opinions 
Audit work is based on sampling transactions to test the operation of systems. It cannot guarantee the elimination of fraud or 
error. Our opinion is based on the risks we identify at the time of the audit. 
 
Our overall audit opinion is based on 5 grades of opinion, as set out below. 
 
Opinion 
Assessment of internal control 
High Assurance 
Overall, very good management of risk. An effective control environment appears to be in operation. 
Substantial 
Assurance 
Overall, good management of risk with few weaknesses identified.  An effective control environment is in 
operation but there is scope for further improvement in the areas identified. 
Reasonable 
Assurance 
Overall, satisfactory management of risk with a number of weaknesses identified.  An acceptable control 
environment is in operation but there are a number of improvements that could be made. 
Limited Assurance 
Overall, poor management of risk with significant control weaknesses in key areas and major 
improvements required before an effective control environment will be in operation. 
No Assurance 
Overall, there is a fundamental failure in control and risks are not being effectively managed.  A number of 
key areas require substantial improvement to protect the system from error and abuse. 
 
Priorities for Actions 
Priority 1 
A fundamental system weakness, which presents unacceptable risk to the system objectives and requires urgent 
attention by management. 
Priority 2 
A significant system weakness, whose impact or frequency presents risks to the system objectives, which needs to 
be addressed by management. 
Priority 3 
The system objectives are not exposed to significant risk, but the issue merits attention by management. 
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