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ADVISORY

Principles of the Reduction of Administrative Burden using the Standard Cost Model. Petra Exner Nicosia, 16 th March 2010. ADVISORY. Agenda. 1. SCM Basics (9:00 - 09:55 am) 2. Examples of mapping of Information Obligations and Data Requirements (9:55 - 10:10 am). Standard Cost Model.

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ADVISORY

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  1. Principles of the Reduction of Administrative Burden using the Standard Cost Model Petra Exner Nicosia, 16th March 2010 ADVISORY

  2. Agenda 1. SCM Basics (9:00 - 09:55 am) 2. Examples of mapping of Information Obligations and Data Requirements (9:55 - 10:10 am)

  3. Standard Cost Model The Standard Cost Model (SCM) is designed to measure the effect of government regulation on businesses simplified, consistentmodel for estimating the administrative costs does not focuson the policy objectives of each regulation high degree of detail in the measurement provides transparency and a leverage for reduction approaches

  4. Information Obligations Information Obligations (IO) are the obligations • resulting from regulation • to provide information and data • to the public sector or third parties Furthermore: • Transfer of the data to the public authority or private persons is not a mandatory criterion • includes the duty to have the information available for inspection or supply it on request

  5. Administrative Costs Costs of compulsory obligations Content requirements: Support of the government policiese.g. resources distribution, tax collection, behavioral regulation Information Obligations: Support of governmental regulation and legal control - Costs of regulation Administrative costs e.g. trade registration Direct financial costs e.g. tax payment Material costs e.g. filters for harmful emissions

  6. Administrative Costs The following costs are not administrative costs: • Financial costs, such as premiums, duties, penalties and repayments • Substantive compliance costs, such as (technical) facilities in connection with hygiene • Acquisition of professional qualifications • Statutory information requirement for which the entrepreneur receives a payment from the commodity board or industrial board • Turnoverlost by the entrepreneur as a result of compliance with information requirements • Irritation burdens, or the quantitative expression of annoyance • Costs induced by exercising a right to complain

  7. Data requirement 1 Data requirement 2 Data requirement 3 Data Requirements Definition: The specific information that must be provided in order to comply with an Information Obligation Function Mapping of different frequencies Facilitate reporting and the assessment

  8. Identification of Information Obligations Regulation Does the paragraph contain an Information Obligation for a business? no Continue with the next paragraph probably an IO: yes Reference to a not specified information transmission? identify relevant DR Identify target groups probably DR: yes Supply of specific business data? If related to several target groups: probably several IO identify relevant IO probably IO: no Connected to other Information Obligations? Link to some other regulation? deduce DR from subordinated regulation Decision if IO/DR when linked regulation is identified

  9. Calculation Model Legislation Laws, decrees, administration instructions Information Obligations and Data Requirements Reports, permits, certifications, registrations Administrative activity Standardized process for complying the legal requirements Time (H) Price (T) Additional costs (A) Population (N) Frequency (F) x x + Costs per administrative activity (P) Annual quantity of administrative activities (Q) Administrative costs = P x Q

  10. 7 1 10 11 3 12 Retrieving relevant information from existing data Familiarization with the Information Obligation Submitting the information Filing the information Filling forms Copying Types of Required Actions Central idea of SCM : every Information Obligation is a process that consists of collecting and/or transferring data. This process can be mapped through a given set of action types Example: Acquiring a permit Reasons for using standardized types of required actions: Supporting process modeling and standardization Facilitate reporting and the assessment

  11. Types of Required Actions Familiarizing with the information obligation Training members and employees about the Information Obligations Retrieving relevant information from existing data Adjusting existing data Producing new data Designing information material Filling forms and tables, including recordkeeping Holding meetings Inspecting and checking Copying Submitting the information Filing the information Buying (IT) equipment & supplies Other

  12. Standardization

  13. Phases of SCM Projects Phase 3 Calculation and reporting Phase 2 Data capture and standardization Phase 0 Project Set up Phase 1 Preparatory analysis

  14. What’s next?1. Further activities What is to be done with the SCM results? • Reduction analysis and implementation • SCM is concerned with the: • Time of the administrative activities (duration) • Wage of the employee involved (cost) • Quantity (number of affected businesses or cases) • Frequency (How often is the obligation required) • EU reduction goal: 25% • Cyprus reduction goal: 20% • Influence of SCM on further legislative procedure • Ex ante measurement of new legislation • Further development: impact assessment, better regulation

  15. What’s next?2. Institutionalization of SCM Reason for an Institutionalization: independent organization for • Monitoring reduction process • Checking further legislation drafts for IO’s • Updating baseline measurement Forms of organization • Independent unit (independent from other institution (NL, GER, EU) • Interdepartmental steering group: core in MoF, satellite units in other ministerial departments (NL, GB, DK, GER) • External support for updating, incl. involvement for business organizations (DK)

  16. What’s next?3. Future tasks of government units Tasks and duties • Monitoring reduction process • Achieving consent about reduction goals for the different departments and the reduction measures to be taken • Addressing results to responsible unit (e.g. parliament) • Auditing further legislation drafts for IO’s during the legislative procedure • Reporting progress • Updating baselinemeasurement Concerned organizations • Ministry of Finance • Other Government departments • Private Sector

  17. Agenda 1. SCM Basics (9:00 - 09:55 am) 2. Examples of mapping of Information Obligations and Data Requirements (9:55 - 10:10 am)

  18. Example

  19. Example

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