Class B cemetery trusts – fee approval process
Departmental policy and legislative instruments acknowledge that cemetery trusts are best placed to determine the services required by the communities they serve and the appropriate level of fees for those services. Under s. 39 of the Cemeteries and Crematoria Act 2003, cemetery trusts must, when fixing fees and charges, have regard to the costs of operating and managing any public cemetery for which they are responsible, and the need to provide for the maintenance of that public cemetery in perpetuity.
The role of the department in approving fees for cemetery services is to review applications for fee increases from cemetery trusts to ensure that there are no anomalies in a trust’s application, and to seek justification for increases outside the annual consumer price index (CPI) process.
Annual consumer price index increase
Under s. 43 of the Act, all trust fees of $50 or more are increased annually in accordance with CPI, unless a trust specifically requests and provides an acceptable argument why the increase should not be applied. The CPI increase is based on the All Groups Consumer Price Index number (for Melbourne) for the current December quarter. Fees increased by CPI are effective from 1 July each year.
Setting fees and charges
Under s. 39 of the Act, a cemetery trust may fix fees and charges, or a scale of fees and charges, for its services. In fixing fees, a cemetery trust must have regard to the costs of operating and managing each of its public cemeteries, as well as the need to provide for the maintenance of each of its public cemeteries in perpetuity.
Revenue raised by cemetery trusts through the charging of approved fees and charges is expected to:
- encompass current cemetery operational costs
- cover repairs or replacement costs associated with cemetery facilities and equipment
- ensure adequate financial reserves for future operation.
When setting fees and charges, trusts should also ensure there is a direct relationship between the fees charged for cemetery services and the actual cost of these services. This process ensures trusts are able to provide a transparent account of their current fees to members of the public who may wish to purchase cemetery goods and services.
The Department of Treasury and Finance developed the Cost recovery (guidelines) to clarify the Victorian Government’s policy principles underpinning cost recovery arrangements. The guidelines provide a rigorous framework for use by government entities when considering, developing and reviewing user charges and regulatory fees. They ensure that cost recovery arrangements in Victoria are transparent, efficient, effective and consistent with legislative requirements and government policy. To access the guidelines, visit the Department of Treasury and Finance .
Approval of fees and charges
Cemetery trusts cannot charge any fee that has not been approved by the department and published in the Victorian Government .
Under s. 40 of the Act, a cemetery trust must make a formal application to the department for consent to make or vary its scale of fees. For Class B cemetery trusts, the department’s fee application form must be signed by three trust members and lodged by the trust with the department. The trust must provide a justification for any proposed new or increased fees, and a breakdown of the total proposed fee amounts.
Class B cemetery trusts – guidelines for approval of fees
There are guidelines to assist Class B trusts when they apply for fee increases outside the CPI process.
The guidelines and associated documents have been developed in conjunction with the Cemeteries & Crematoria Association of Victoria and its members. The guidelines and supporting documents are available for use by Class B cemetery trusts.
The guidelines have been developed to:
- provide Class B trusts with standard fee descriptors and tools to assist in developing fees that are transparent in terms of what consumers actually purchase and how fee amounts are determined
- provide descriptors and amounts that accurately reflect the services provided
- enable trusts to meet their operational and maintenance obligations under the Act
- provide consistency across the cemetery sector in terms of how services are priced and described.
Under s. 41 of the Act, a notice of the approval of any amended or new cemetery trust fees must be published in the Victoria Government Gazette before the fees become effective. Cemetery trusts cannot charge any fee until a notice is published in the gazette.
The fees are also published online.
Time period to approve cemetery trust fees
The time taken from lodgement with the department until approval is approximately 3–6 weeks, providing the department does not need additional information from the trust regarding its application.
Applying the approved scale of fees
Section 44 of the Act requires a cemetery trust to charge its approved fees. Fees are only to be waived or reduced on grounds of extreme hardship or other special circumstances.
Exemption of fees and charges from approval
Under s. 40A of the Act, the Secretary to the department may exempt specified fees and charges, or scales of fees and charges, from being approved under s. 40 if, in the Secretary's opinion, there is no public benefit in those fees and charges being approved.
The annual application of CPI will not apply to any fees that are subject to an exemption under s 40A of the Act.
Class B cemetery trusts – financial reporting requirements
The cemetery trust is responsible for the stewardship and proper accounting of its income and expenditure, assets and liabilities.
Abstract of accounts
The financial year for trusts ends on 30 June. Section 52 of the Act requires that an abstract detailing the financial transactions for that year be signed as correct by three trust members and witnessed, and lodged with the department by the following 1 September. This is to be accompanied by copies of bank statements with balances of accounts and investments for that year.
If the trust has income or expenditure of less than $100,000 the abstract must be verified by a statutory declaration (last page on abstract form) that is signed by at least three members of the trust and witnessed as a statutory declaration before being forwarded to the department.
A list of professionals who can sign a statutory declaration is available from the Australian Government Attorney-General's Department .
See Abstract of accounts for more information on this topic.
All sections of the abstract of accounts form need to be completed, or marked ‘not applicable’ (N/A) or ‘nil’, where appropriate.
Certificates as to the balance of investments and also funds at the bank at the end of the period must be forwarded with this form.
The abstract form and any accompanying documentation need to be forwarded by the 1 September of the current financial year to the Cemeteries and Crematoria Regulation Unit.
Audit of the abstract of accounts
The department requires those trusts with income or expenditure in excess of $100,000 up to $1 million (inclusive) to arrange for the abstract of accounts to be prepared and reviewed in accordance with the Australian Accounting Standards by a professionally recognised practising accountant or registered company auditor.
Trusts with income or expenditure above $1 Million are to arrange for the abstract to be prepared and audited in accordance with the Australian Accounting Standards by a registered company auditor or professionally recognised practising accountant.
Income includes revenue from fees and charges, interest from bank accounts, returns on investment and other income, but does not include government grants. The audit must be printed on letterhead or, if letterhead is unavailable, must be accompanied with documentation that indicates auditor’s qualifications. The trust must submit a copy of the required review or audit report, along with copies of bank and investment statements to the department when submitting the abstract.
Preparing an annual budget
It is recommended that each trust prepare for its own use a budget statement for the coming financial year, to be considered at a budget meeting held in April or May.
This budget statement should detail:
- proposed expenditure on both maintenance and development works
- anticipated revenue from the trust’s fees and charges, based on the anticipated number of funerals.
- goods and services tax (GST) collected on anticipated sales, less credit for GST on the anticipated purchases, assuming (as is recommended, depending on the revenue of the trust) the trust is registered for GST and has an Australian business number
- funds and investments on hand, in both the general account and perpetual maintenance account.
The trust is then in a position to determine whether its current fees and charges are appropriate to its requirements for income. It is recommended that a realistic level of fees be charged to reflect the actual cost of operating the cemetery, including the provision of funds for the perpetual maintenance obligations under the Act.
Other Financial Management Documents
Financial guidelines for class B cemetery trusts
Asset Capitalisation Threshold
Change in Asset Capitalisation Thresholds Process
Cost of inventory
Cemetery Land Accounting Policy
Q & A Cemetery Land Accounting Policy - implementation issues
Mausoleum establishment and construction requirements
Methodology for the valuation of Victorian cemeteries for financial reporting purposes
Modelling the financial impact of the application of AASB 102 Inventories to cemetery land designated for interment purposes - Final report - August 2008