Costing Space
Reynold Dias
Financial Resources Management
Monash University
1
Presentation Overview
• Monash’s strategy – charging for services
• Prerequisites for costing space
• Costing methodology
• Costing outcomes
• Policy development and review
• Key factors for a successful project
• Summary
2
Monash’s Strategy – charging for services
• 100% of revenue directed to areas that earn the revenue
• All centrally provided services are charged to areas that use or
gain a benefit from these services (Services include payroll, IT
support, provision of space, security, cleaning,…...)
Areas that are charged include:
– Faculties, schools and departments
– Central support divisions
– Monash entities with a commercial focus
– Non Monash entities
• Matching of revenues and expenses easily against each entity
3
Non financial prerequisites for costing space
• A space information database – to understand
the space types, square metres, buildings,
occupancy, etc.
• A space quality classification system - premium
quality, high quality, etc.
• A space cost classification system - high cost,
low cost, etc.
• Programmed spaces and their utilisation in
hours
4
Costing Methodology
• No profit component – just cost recovery
• Includes full costs:
– Direct costs - maintenance, insurance, OHS,
capital costs, space management costs, etc
– Indirect overhead costs – payroll, HR services, IT
support, financial management, space, etc.
• Life cycle approach to recognising capital costs
• Use of accrual accounting principles
5
Costing Outcomes
• Cost of dedicated space - $rate/m2 based on:
– Space quality (4 quality types)
– Cost type (2 cost types)
Example: A premium quality office space is $150 per m2
• Cost of programmed space (lecture theatres,
classrooms, etc) - $rate/hour based on :
– Technology of space (2 types)
– Seating capacity (5 types)
Example: A high tech. lecture theatre with seating capacity
between 100 and 150 is $50 per hour
6
Policy development and review
• Keep policy at a high level – Monash’s space charging
policy is just 6 pages. It includes:
– Detailed description of cost components included in the
space charge
– Calculation of charges for different types of space
– Definition of quality and cost classifications
– Exceptions, transition arrangements, timing of charges etc.
• Constant review and feedback – iterative process of
review by space users
• Communication and discussion at all levels across the
university
7
Key factors for a successful project
• Need strong commitment and support from university
executive and needs alignment to the university’s
strategic goals
• Don’t get caught up in detailed costing or policy
development - deal with the exceptions as they
emerge.
• Need to have an open and transparent approach
• Communication of strategy and benefits as well as
dealing with emerging issues and situations raised by
customers is important – around 80% of the effort
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Involvement of customers
Alignment with university strategic directions
Non financial
Information for
costing
Costing
Methodology
Costing
Outcomes
Space charging policy
Summary
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