TRAC and FEC: Martin Jamieson January 2007

1. TRAC & FEC Martin Jamieson January 2007

2. INDEX • TRAC processes • TAS • Research Project FEC costing • Proposed changes to processes. • When FEC is NOT used. • Estates and Indirects + Distribution Policy • Interpretation of Management Accounts • Research Administration issues. • TRAC and Teaching

3. Glossary of Terms • FEC – Full Economic Cost – this requires that all of the costs of the research project are calculated. • DA – Directly Allocated Costs • DI – Directly Incurred Costs • Indirect Costs • Exceptional Costs • FTE – Full Time Equivalent – defined as 1650 hours pa (or 37.5 hours per week for 44 weeks) • TAS – Time Allocation Schedule • TRAC – TRansparent Approach to Costing.

4. Nomenclature • INDIRECTS - used to be the main source of financial contribution from Research projects (plus some salary recoups). • CONTRIBUTION – is the new term – it incorporates Salary Recharges (now also on Academic staff), Estates, & Indirects

5. TRAC Process

6. TRAC Process Statutory Accounts PLUS 2 ADJUSTMENTS TAS TRAC

10. Statutory Accounts PLUS 2 ADJUSTMENTS University Services - Cost Drivers TAS Estates Occupant, m2 Department Costs Teaching Research Other

11. University Services – Cost Drivers

13. Statutory Accounts plus 2 adjustments. University Services - Cost Drivers TAS Estates Department Costs Teaching Research Other Salaries – TAS Non-Salaries Estates – Occupant, m2, activity Indirect – Support (TAS) - US

14. Statutory Accounts 2005/2006 TRAC January 2007 • Department Costs • Research FTE rates for Estates and Indirects • Applications from February 2007 • Projects may start from February 2007, but • it could be late 2008before they start.

15. TRAC Return • Costs for 2005/2006 • Reported in TRAC return Jan 2007 • Used in Applications Feb 2007 – Jan 2008. • Award may be six months after application. • Start date may be three months after the award. • Estates and Indirect costs are indexed for two years to bring them up to date for the start of the project. • These rates are the year zero rates – and the FEC cost will be adjusted for inflation for the rest of the project life.

16. Time Allocation Schedule (TAS)

17. TAS

19. Project Costing

20. Research Project FEC Costing • PI plans project and identifies resources required. • R&E help by calculating FEC costs for project (FEC FTE Rates calculated from staff time) • PRICE – calculated from costs or based on market (depending on funder).

21. Resources • New RA1A for three years • PI time 15% • Technician 10% • Consumables15, • Equip 5, • Travel 2

24. Contribution • The contribution equals the PRICE paid by the funder less the marginal cost to the University of undertaking the research. (Typically the marginal costs equals the Directly Incurred costs that the PI manages.) • PRICE – DI = CONTRIBUTION

25. Avoid Double Counting • Do not charge a cost directly if it has already been included in your indirect cost rates. • General Funds staff will have been charged to Research or indirect costs based on their TAS return. • Time spent on support will result in costs being allocated as Indirect costs.

26. Proposed Changes

27. Proposed Changes • It is recommended that we split the DA Technical salary costs: • Named DA - Technician salary costs – this element will need to be justified and will be considered by peer review committees. • DA -Pool Technicians – these should be calculated as a rate per Research and Teaching staff time, not subject to peer review.

28. When FEC is used! • GENERAL RULE – All Research and Other services projects should be costed on a FEC basis. • Exceptions: • Travel Grants – the FEC value should be made equal to the Price Awarded. • Equipment Grants – FEC = PRICE • Studentships – RCs fund stipends, fees and RTSG, but will not pay for supervision, Estates or Indirects.

29. Estates and Indirects • Each year each Faculty gets a charge for all of its share of Estates and Indirects. • Across the breadth of its activities the Faculty must generate sufficient contribution to pay for Estates and Indirects. • All of the financial contribution from each new research project comes to the Faculty.

32. SENSITIVE TO VOLUME • The budget assumptions on the volume of research will determine the planned net contribution. • An increase in volume (more projects than planned) will increase the contribution. (Gross cont = Net Cont because the corporate overheads do not increase.)

33. Distribution Policy • Constrained by Faculties financial position. • Recommend distribution as a percentage of contribution (rather than variable rates for each of Salary recharges, Estates and Indirects). • Consider distributing a lower % during the year with the balance on a T-1 basis to allow the Faculty to ensure that it balances its books, before being more generous.

34. Interpretation of Management Accounts

36. Management Accounts • Management Accounts Example

38. Research Administration Issues

39. Research Changes • System Changes: • Agresso upgraded • FEC introduced • Research system updated • HR system updated • Volume of work increases in R&E and ROSS • Staffing: • tried to absorb increases in work with no new posts. • ROSS – have twelve grade 4 posts – 6 of whom have been appointed during the last year. We have a very good team and the new appointments are settling in very well.

40. Research Administration Issues • Data Quality – accuracy of PAF and data in both the Research System and Agresso. • Modernisation of Pay http://www.gla.ac.uk/services/finance/staff/research/index.htm • Notification of staff starting on a project must be within 28 days (PMF for new staff or email to ROSS for projects that only involve salary recharges) Notification of students starting. http://www.gla.ac.uk/services/finance/forms/formsindex.htm#QT

42. Research Admin Issues cont. • R&E – advice on justification of resources FEC Justification of Resources.doc • R&E – costing requisition form. Costing Request Form.xls • Author Pays Publications – costs need to be included in applications (rate varies from a few hundred £s to a few thousand £s) Author Pays Publications.xls

43. Streamline Research Administration • Need to simplify: • calculation of project costs, budgets etc • Reduce duplication in data input - transfer data between systems • Reduce duplication in authorisation – e.g. HR PMFs and PAF • Select administration processes that will simplify things for the PI – e.g. give them a budget = to the FEC value of the DI costs. • RPSG about to form working group.

44. TRAC Teaching

45. TRAC - Teaching • TRAC was focussed on research but is now being widened to look at teaching in more detail. • Voluntary return in Feb 2007. • Benchmarking – spring 2007. • Compulsary return Feb 2008.

46. Teaching Return • Cost of Publicly Funded teaching/FTE per HESA cost centre (department). • Expect that the 2008 return will be the first with more meaningful information. • What management information do we need? • What will we need? – e.g. in one or two years as the SFC complete their review of FE and HE teaching.

47. Actions • New collection of staff time information. • Decide what info. we want. • Design new form • Agree statistical sampling method. • MIS update web-program • Collect from April 2007. • Ask HoDs to validate data. • Compare with 2004/2005 • Generate annual equivalent data from new return.

49. ROSS Contact Details • finrossec1@mis.gla.ac.uk ENGN, FIMS, IGR, PHSC, RCBS • finrossec2@mis.gla.ac.uk IBLS, VETS • finrossec3@mis.gla.ac.uk Medicine • finrossec4@mis.gla.ac.uk Rest • finrosseu@mis.gla.ac.uk EU & Federal

50. Martin Jamieson University of Glasgowm.jamieson@admin.gla.ac.uk