On events that I have run, I have taken a middle path. The exchequer collected the on-board fees of servants I engaged, but I paid them. Not everyone can afford to do that, but it seemed like the proper master/servant relationship at the time.
I believe that autocrats should have some discretion in this matter. Of course, the bottom line is that they have to cover their expenses and hopefully return a small profit to the barony. Although we are an educational organization, we are not a charity and cannot let ourselves go broke over bad money management (as if the exchequer would allow it!) Within these limits, however, autocrats and head cooks should be able to make some decisions. If the discretion is abused, then we will deal with correcting it.