TRAC and fEC: background,
implications and current situation
John Newton
Assistant Director (Costing, Pricing and Special
Projects),
Cardiff University
Background
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Transparency Review – PFT, NPFT, PFR, NPFR, O,S
UK Government expectations/commitment - 2002
JCPSG, TRAC and its strategy – methodology finally agreed
June 2005
Additional support for UK Research Councils
Implementation for Research Councils from September
2005
Cost-based pricing based on TRAC/fEC
Market-based pricing
Sustainability – Reporting of data to UK government,
Funders Forum, metrics
fEC
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Definition of fEC
Full economic costs based on TRAC – definitions of
activities, data, time allocation schedules, validation, testing,
internal audit- refer to http://www.jcpsg.ac.uk/
Cost models and rates vary between institutions
QA process – implications
Rates calculated for Estates and Indirect costs – generic
and lab-based departments
Breakdown of costs:
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Directly Incurred (DI) – note library costs
Directly Allocated (DA)
Indirect
Exceptional items
Indirect costs
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Cost driver model
Consists of:
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the Support time of academics
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clerical and administrative staff in
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academic departments (exc. DI/DA costs)
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non-staff costs in academic departments
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central services (Finance, Research Admin,
Libraries, Computing, etc)
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estates costs of central service departments
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Return on Financing and Investment Cost
Adjustment (RFI)
FTE calculation – TRAC Time Allocation Schedules/PGR
weightings
The total indirect costs for Research/total FTEs for
Research provides the indirect cost rate/FTE for Research
Annual calculation, using historical data for the previous
accounting year
Library/Learning Resources
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Materiality
Information Services - Library/Learning Resources, Media, IT, etc
Cost categories – staff/non-staff
Staff – costs to be analysed between
selection/acquisition/collection management, cataloguing,
binderies, enquiries/staffing reading rooms/training, shelving/book
retrieval, preservation/conservation, publicity, income-generation,
management/administration
Non-staff – costs to be analysed between
acquisition of books, acquisition of journals, inter-library loans, eservices (serviced access to external databases), special
collections, other costs not included above, estates costs of
libraries
Costs can be identified from accounting statements –
discussion/review
Main steps in allocation of costs
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Identification of costs of the HEI’s libraries – agreed by Librarian
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Allocation of these library costs tom academic departments/Library
income-generating activities – units using libraries and their
facilities are identified
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Allocation of these academic department library costs to activities
(i.e. T,R, O) – review by Finance
Note testing for fairness and reasonableness.
Learning Resource facilities (e.g. e-Learning, Blackboard) will be
similarly identified.
Step 1
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Attribute costs of internal services (e.g. cataloguing) to branch
libraries on basis of their use of each service (e.g. number of
books catalogued)
Attribute other central library costs (management, equipment, etc)
to branch libraries using appropriate cost drivers (e.g. cost,
number of staff/student FTEs, etc) as agreed with the Librarian
Central administration costs (such as Finance) and estates may
be attributed to libraries (this involves review of the HEI cost
model, allocation of costs and interaction with various managers)
Step 2
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The costs of each library are allocated to the academic schools
they service, based on appropriate cost drivers – agreed by
Finance and the Librarian.
2.
Cost pools (staff, non staff costs – broken down by type of cost) for
each library will be apportioned on the basis of cost drivers.
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Cost drivers may include the staff and student FTEs in the
appropriate academic schools, spend on categories of cost, usage
and other data. These will be discussed with the Librarian and
various data sources used – annual accounts, electronic data
collection systems, statistical sampling, etc
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Step 3
The costs of each library are allocated directly to T, R, O where
possible (e.g. research libraries to R). Finance will discuss with the
Librarian.
The costs of specific cost pools (e.g. books, periodicals, journals,
inter-library loans, etc) are allocated to T, R, O on the basis of
estimates, based on review and data sources, by the Librarian.
Staff costs could be allocated to T, R, O on the basis of staff and
student FTEs. Student FTEs will include Home/EC, Overseas and
PGR students. Weightings will be needed between staff and students
– the Librarian to determine.
Central costs (e.g. management, equipment) should be allocated in
proportion to all other library costs.
Costs of R costs may be split further between PF and NPF activities
on the basis of data derived from school time allocation schedule
returns for academic staff and the weighted PGR student FTEs.
Finance will advise.
Costs of T costs may be split between PF and NPF activities on the
basis of staff and student weighted FTEs, using data from electronic
systems. If staff numbers are relatively small in relation to student
numbers, then student numbers alone may be used. .
General
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Some costs may include central information services and/or IT staff
but similar cost drivers to those outlined will be used.
Similar attribution of costs will be used for IT services.
Costs are included in the HEI’s cost model and will be used to
calculate the costs of PFT, NPFT, PFR, NPFR, O for funding council
returns annually. The costs are also used to calculate the cost rates
for Research, Services Rendered/Consultancy, etc and used for
pricing and cost recovery on external funding proposals. Such rates
may also be used where library staff are classed as researchers as
outlined in the TRAC guidance.
Costs may be compared between libraries, compared over different
time periods, compared with other HEIs, etc
Cost rates specifically for the Library may be calculated for service
activities (such as information retrieval).
HEIs will have different resource allocation processes and some may
reallocate income derived back to library accounts. Note research
councils meet 80% of full economic costs on successful projects.
Conclusions
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Do not underestimate work in implementing fEC systems
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All staff across university are involved in fEC
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There are different funding regimes - Structural Funds, Charities, UK
Research Councils, EU, etc – which may affect inclusion of costs in
proposals for pricing purposes.
Contact
John Newton
Assistant Director (Costing, Pricing and Special Projects)
Cardiff University
P O Box 497
30 -36 Newport Road
Cardiff CF10 3XR
UK
Email: newton@cardiff.ac.uk