Cost recovery for community use
Setting rates for cost recovery
Fees paid by third parties to school councils for the use of school facilities must allow schools to recover additional maintenance and operational costs (for example, for electricity, water, cleaning, insurance, maintenance), and lifecycle costs proportional to each party’s use of the facility, but must not be set higher than required for cost recovery.
Schools are responsible for calculating a reasonable amount to charge third parties.
There are a range of methods that schools can use to estimate the costs of sharing their facilities with the community. The specific circumstances of each school may vary, so schools are encouraged to review these suggestions to help determine a method that suits their operational requirements.
Key considerations for cost recovery
When determining cost recovery fees, schools are encouraged to consider the following factors:
- Maintenance costs: regular expenses incurred for the upkeep and repair of facilities
- Insurance costs: costs associated with liability coverage and facility protection
- Utility costs: expenditures on essential services such as gas, electricity, and water
- Cleaning costs: costs of school cleaning and waste management services
- Administration costs: salaries of staff hired to manage agreements or invoicing and so on
Maintenance costs
Schools can consider what maintenance costs might increase with the additional use, considering schools buildings as well as grounds and other facilities. This might include costs like having hygiene bins in bathrooms emptied, consumables such as toilet paper and hand-soap, having gymnasium floors resurfaced, and the costs of servicing key equipment like air conditioning or heaters, as well as the periodic costs of replacing these items when they break down.
Schools can then estimate the total maintenance costs for this space over a set period (typically a year). These costs can then be divided by the total number of hours the space is used to generate an hourly cost.
For example, schools can assume that ‘ordinary’ maintenance costs are incurred over 1,600 hours per year (that is 40 hours per week × 40 school weeks per year).
To establish an hourly rate, the total annual maintenance cost could then be divided by 1,600.
Insurance costs
The requirements for insurance are outlined in the policy tab and the Insurance for Schools policy. Some third parties such as not-for-profit groups or individuals are not required to provide evidence of insurance (Certificate of Currency).
Where a third party does not have insurance, schools may choose to purchase additional public liability insurance from the Victorian Management Insurance Authority (VMIA) on behalf of third-party users.
If they do so, schools may choose to divide the cost of this insurance between the number of community partners they expect to cover, either evenly or in line with the extent of each partner’s use.
For further details see:
Utility costs
Schools are encouraged to consider additional costs of utilities such as electricity, gas and water.
Similar to maintenance costs, a simple way to calculate utilities costs is to look at the school's annual bill and divide by 1,600 hours to determine an hourly rate.
Alternatively, schools could divide a quarterly bill by 400 (10 school weeks × 40 hours per week).
Cleaning costs
Schools are encouraged to assess whether additional cleaning is required before or after community use of their facilities. In some cases, additional cleaning may not be required and schools can maintain their existing cleaning arrangements. In other cases, however, schools may need to arrange additional cleaning, for instance if the community use is happening at a time outside of the usual cleaning schedule like over the weekend.
However, if schools require additional cleaning due to the activities of third party users, they can contact their cleaning service provider to obtain a quote for the extra work, and then divide this cost between the parties hiring the facility. Schools may need to consider the minimum hours for which casual cleaning staff can be employed when engaging additional cleaning services. Schools are encouraged to work closely with their service provider to ensure they are compliant with the minimum engagement requirements.
Schools must follow the Cleaning policy and guidance in the Finance Manual to assist in determining the most appropriate approach for engaging additional services. Further detail can be found in the Cleaning policy and Finance Manual.
Cleaning fees
The exact cost for additional cleaning will differ depending on the timing and the size of area to be cleaned. Schools are encouraged to work with their cleaning provider to get an accurate quote for any additional cleaning and ensure they remain compliant with the minimum engagement requirements (minimum hours which can be worked). By working with cleaning providers schools may also be able to arrange for the cleaning to fit in with existing schedules, and as a result the providers may be able to offer some cost savings.
Administration costs
Schools may require additional support to manage the administrative work associated with setting up and renewing agreements with third parties. Schools can hire additional administration staff to support this work, and may wish to include a portion of a business manager's salary in the costs charged to third parties.
Reviewed 13 April 2026