LESSON 14 ASSIGNMENT: FIRE PREVENTION 2

Lesson 14 Assignment: Fire Prevention Cost Recovery and User Fees System

Introduction

Financial management is crucial in the smooth running of fire services and operations.
There are numerous aspects of financial management that fire service organizations can apply to
avoid running into financial problems. For example, fire service organizations can prepare and
submit appropriate budgets to relevant authorities early enough for approval to bolster their
preparedness. The adopted budgets are usually categorized into operating and capital
improvement (Jones & Diamantes, 2020). Cost recovery and user fee systems are often used to
recover costs incurred by fire service organizations when performing government services. This
report discusses numerous cost recovery aspects and user fee systems.

Literature Review

The fire service organization I work for has a fire prevention cost recovery and user fees
system. The fire service organization charges fees on fire safety inspections and code violations.
Most importantly, the company abides by the relevant fire service laws governing fire prevention
cost recovery and user fees system when delivering services. Additionally, the organization
applies a standard method when estimating costs, a practice that allows standardization. The
approach entails a cost allocation plan that helps in the fee-setting process, and the finance
department plays a significant role in this activity. The organization also uses the volume of
activity data to estimate the revenue collected from fees and tracks the number of hours spent on
different fire prevention services (Jones & Diamantes, 2020).
However, it is integral to acknowledge that different types of fees may be associated with
new and existing construction, including permit, inspection, and plan review fees. Permit fees are
calculated based on the time required to inspect the construction process. In contrast, inspection

LESSON 14 ASSIGNMENT: FIRE PREVENTION 3
fees are mainly determined by the time needed to inspect and prepare a report on organizational
findings. At the same time, plan review fees are based on the type of construction plan, the
number of fire protection devices, square footage, and the time the reviewer spends to
accomplish specific tasks (Jones & Diamantes, 2020). It is worth noting that additional review
fees must be included, especially if the plan is rejected.
Finally, an organization’s cost recovery and user fees system can present the following
advantages. Firstly, it can help in determining the taxable income of an organization. With a
defined taxable income, the government can levy taxes on an organization and use the revenues
collected to invest in productive projects. Secondly, the cost recovery and user fee system can
promote fairness because it ensures a uniform methodology is applied across the industry when
calculating the costs of conducting fire inspections and other activities (Jones & Diamantes,
2020). Despite promoting impartiality, the standard fees are sometimes unaffordable to
individuals with low socioeconomic status. The main undoing of standardizing costs is that all
households pay the same prices for services irrespective of the differences in income (Spearman,
2019).

Conclusion and Recommendations

Fire service organizations have a role in ensuring that they adopt better financial
management systems, a process that can guarantee accountability. Notably, cost recovery and
user fee systems can ensure that organizations do not overcharge people when providing
services. One way is ensuring a fire service organization implements standard methods and
practices to promote transparency and accountability. One of the best recommendations to
improve cost recovery and user fees system is to encourage standardization to ensure service fees
are constant in all locations.

LESSON 14 ASSIGNMENT: FIRE PREVENTION 4

References

Jones, A. M, & Diamantes, D. (2020). Principles of fire prevention. Jones & Bartlett Learning.
Spearman, K. (2019). Financial management for local government. Routledge.