Contemporary management accounting

C ISLANDS FORUM FISHERIES AGENCY The Pacific Islands Forum Fisheries Agency (FFA), based In Honlara, Solomon Islands, advises member countries on fisheries management and development. It is made up of 16 member countries and one territory from across the western and central Pacific region, Including Australia, New Zealand, Fiji, Tonga, the Solomon Islands and Papua New Guinea. The fifty-ninth meeting of the Forum Fisheries Committee, held In the Marshall Islands in June 2005, considered the issue of overhead cost recovery for projects that are self-funded by members. Major self-funded projects Included the Vessel Monitoring System (VMS) operations, US Treaty Administration Fund, Federated States of Micronesia Arrangement and the Nauru Agreement. Every project undertaken by the FFA results in significant Increases In total overhead costs. Although not directly traceable to Individual projects, fallure to ts of self-funded projects results in an underestimate of the cost of the project and leads ember contributions and donor funding. Thus, the FFA set an overhead recovery rate at ts. While members and other stakeholders questioned the basis and the level of the cost covery principles, conducted in April 2007, strongly supported the use of staff costs as the Inded projects and the recovery rate of 66 per cent. ures, such as labour costs, are widely used cost drivers to allocate overhead costs to wever, In this case, the independent review was required to confirm the appropriateness costs to self-funded projects. ) (2007) titled 'How should the Pacific Islands Forum Fisheries Agency mating overhead rates' and evaluate the FFA's decision to all on salary costs. LO 7.7 REALLIFE