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Transparent Approach to Costing (TRAC) : an update

Transparent Approach to Costing (TRAC) : an update. Government Requirement. July 1998 comprehensive spending review Timescale is pre-determined Phased implementation with whole sector reporting from June 2001 Multiple agendas Accountability for public funds (government)

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Transparent Approach to Costing (TRAC) : an update

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  1. Transparent Approach to Costing (TRAC) :an update September 2004 - Presentations to Staff

  2. Government Requirement • July 1998 comprehensive spending review • Timescale is pre-determined • Phased implementation with whole sector reporting from June 2001 • Multiple agendas • Accountability for public funds (government) • Satisfy research sponsors (councils & others) • Joint costing and pricing steering group strategy ‘integrating financial and academic decision making’ September 2004 - Presentations to Staff

  3. Transparency Review 1. Background 2. Limitations of the data 3. The way forward 4. Conclusion September 2004 - Presentations to Staff

  4. 1. Background Objective of the review 99/00: “To establish a transparent and uniform approach to the costing of research (and other outputs) that can be implemented by universities and colleges at reasonable cost.” Now in 2004: “To extend methods to permit full economic costing of teaching, research and other activity at project level…. to satisfy Research Councils’ requirements.” September 2004 - Presentations to Staff

  5. 1. Background: Costing • Robust academic time allocation • Understand activity drivers for non-staff costs • space, library/learning resources, IT • Indirect costs to be fixed £/FTE • Hence basis for realistic pricing • Reduced on-going costs for HEI’s- should become embedded in normal institutional management processes September 2004 - Presentations to Staff

  6. 1. Background: Policy • Govt. Accepts sector has good cost management • Public sponsors recognise real cost of R and T • Higher recovery rates from govt., Charities, RC’s • 4-5% insured asset value to renew & upgrade infrastructure • Institutions have improved business processes • Costs of transparency seen as commensurate with benefits September 2004 - Presentations to Staff

  7. 1. Background: Figures to Be Reported • Costs & Income of teaching , research and other • T and R- publicly and non-publicly funded • Ten figures auditable and reconciled to accounts • Annual on previous year’s accounts • Signed off by head of institution • Backed by supplementary information • T,R,O by department, • R by sponsor type • Research Proposals based on full economic cost September 2004 - Presentations to Staff

  8. 2. Limitations of the Data • Lack of Staff time data since 2000/1 • Cost apportionment used to allocate costs within schools to the five TR headings • TPF, TNPF, RPF, RNPF, Other • Costs need to be split between teaching and research on basis of specialist space then further divided within categories on staff time • Staff office space divided on basis of split teaching: research % September 2004 - Presentations to Staff

  9. 2. Limitations of the Data • Cost pools group expenses • Need revised grouping of central support costs • Need to analyse property costs, particularly depreciation • Cost drivers determine how these costs are shared across individual schools • Calculated by stepped method which assumes only schools generate costs • Need to revise allocation of estates costs- currently only core school space counted without allocating space related to booking of central teaching accommodation, estates is a major driver and various weighted models need to be considered. September 2004 - Presentations to Staff

  10. 3. The way forward • All Schools required to participate • Value of information depends on high staff participation and positive feedback • TWC to improve cost pools and drivers • Need to incorporate routine data collection and processing within University activities • IT solutions: Full electronic data collection & new web site to be launched for information. September 2004 - Presentations to Staff

  11. 3. The way forward Benefits will be: • Will satisfy the Govt that UoG are a responsible recipient of funding • Potential to increase research income and external income • Better informed pricing decisions • Improved cost management • Better basis for allocation of resources & planning • Better understanding of cost structures & drivers • investment appraisal September 2004 - Presentations to Staff

  12. We need your help! • Headsof Department to brief staff on the importance of Transparency (TRAC) • 5 weekly time schedules to be completed by December 2004 for 2003/4 data • 6 weekly time schedules to be completed by June 2005 for 2004/5 data • From August 2005 staff only need to fill in 6-8 time schedules every 3 years • Data will not be used except for allocating costs for the return. No other Dept. will have access September 2004 - Presentations to Staff

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