establish recovery of the National Energy Board (NEB) operating costs from serviced Agencies and Groups, Other Government Departments (OGD), Other Non-Federal Institutions and Non-Government Organizations (NGO), where cost recovery is not formally addressed nor specifically arranged in any Memorandum of Understanding (MOU) or in any Agreement;
form a basis of establishing charges in all new MOUs which will be entered into by the NEB.

This policy does not apply to any costs that are covered by the National Energy Board Cost Recovery Regulations.

Policy

It is the policy of the NEB to charge agencies and groups, which are serviced by the NEB, for the costs associated with delivery of non-regulatory services.

Definitions

Applied Overhead Hours - refers to the calculation of chargeable overhead hours which is based on the ratio of direct hours times the overhead hours within the "home" business unit (BU) of the staff as opposed to the whole NEB.

Direct Hours - are hours that are directly applied to a specific commodity or serviced agency for the purpose of cost recovery.

Full Cost - is the determination of the total costs to deliver the services or products including the costs of related services provided without charge by OGDs. Prior to establishing or amending an external charge, departments must determine the full cost to the government of the activity or product.

Indirect cost - is an item of cost that can not be reasonably identified with a specific unit of product or with a specific service, operation or cost centre.

Market-based - is a method of calculating charges based on market value or reasonable approximation of the value of the service or product delivered.

Non-regulatory services - are services performed by the NEB outside its regulatory mandate as stipulated in the NEB Act.

NGOs - are non-government organizations working with the NEB's staff or using NEB's facilities, normally, under co-sponsored projects.

OGDs - For the purpose of this policy, refer to other federal government departments and agencies which are serviced by the NEB.

Overhead Hours - are hours that can not be allocated to a specific commodity or serviced Agency/Group. Overhead Hours, also known as "Unallocated Hours", are captured by the TIME system as "non-specific".

TIME - refers to the NEB's time recording and reporting system. The system records and reports the allocation of all NEB staff time by category, for example, hours directly applied to commodities, goal and projects. Unallocated (overhead) hours are also reported.

Accountabilities

Managers are accountable for accurate recording of staff time and accurate coding of non-salary costs;
Corporate Services, Finance is accountable for ensuring compliance with this policy;
Business Unit Leaders, in consultation with Finance, are responsible for negotiating the terms of the MOU;
Chief Operating Officer is accountable for approving the MOU.

Costing Principles & Guidelines

A) Charges:

The calculation and set up of external charges must be in accordance with the Treasury Board's External Charging Policy and Guide to the Costing of Outputs in the Government of Canada;
Prior to establishing or amending an external charge, the NEB must determine the full cost of the service or activity. This will facilitate an open and informative consultation with the serviced Agency/Group as well as contribute to sound management practices and informed decision-making. Full cost estimates are required regardless of the approval authority or the basis on which external charges are applied;
The NEB is responsible for establishing the amount to be charged for the provision of non-regulatory services, as determined by the NEB to be appropriate under the following circumstances:

Cost-based external charges - apply to the provision of services and products and the granting of rights, privileges and access to, or use of, government resources for non-commercial use. In such cases, charges must not exceed the full cost (or a reasonable approximation);
Adjusted-Base Charges - are charges which are set lower than the full cost or market value and are approved by the NEB under certain conditions. Although the NEB is responsible for establishing the charges/fees, it must fully justify the reduction in accordance with one of the following:
- a full cost recovery or market-based charge would reduce consumption by such extent that the achievement of important program or other public policy objectives would be compromised;
- a full cost recovery would have a significant, detrimental impact on the financial position of the serviced agency/group and a fee reduction would be consistent with broader policy objectives; or
- demand may be insufficient to allow full cost recovery and the costs can not be reduced to make full cost recovery feasible.

B) Cost Factors:

The determination of the non-regulatory costs incurred by the NEB and OGDs must ensure that the integrity and accuracy of mandated regulatory costs are not impaired;
Salary costs are based on staff time as reported in the TIME system and the applicable (staff) salary rate. Salary costs include bonuses and other entitlements of the involved staff;
Applied Overhead cost is a calculated charge based on applied overhead hours times the BU's hourly rate;
Non-salary costs should include all actual expenses associated with the provision of the service, activity or product;
Costing of services, products or activities should incorporate all direct, indirect and applied overhead costs as well as any relevant costs incurred by OGDs in support of the services or products delivered. Examples of these costs include:

Without charge by OGD:
- Accommodation costs equivalent - Public Works and Government Services Canada;
- Employer's contribution to insurance plans.

C) Revenue/Collection:

On a quarterly basis, the NEB will issue an invoice to the serviced Agency/Group based on the (actual) value of the delivered service or activity or on estimated percentage of completion of the service or activity, whichever is appropriate;
Payment of the invoice is due within 30 days. Interest is applied on overdue accounts at 1.5% per month, compounded monthly. Federal institutions are not charged interest;
The recording of revenue and maintenance of the accounts receivable should be in accordance with the Generally Accepted Accounting Principles.

References

External Charging Policy by Treasury Board Secretariat; External Charging Policy - Part 1 of 2 [ASP]
Guide to the Costing of Outputs in the Government of Canada; Cost Recovery and Charging Policy [ASP]
Appropriate Dispute Resolution - Guidelines - July 2003 [PDF: 1033 KB]
NEB External Charging Policy - Dispute Management Process [HTML]

Enquiries

Enquires related to this policy should be directed to:

Corporate Services, Finance
Financial Advisor
Resource Management, Revenue & Cost Recovery
Telephone: (403) 299-3816

Approved:

______________________________
Business Leader, Corporate Services
and Senior Financial Officer

Date:

____________________

Canada Wordmark

External Charging Policy - Non Regulatory

Purpose