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Practical issues of fEC

Practical issues of fEC. John Newton National Co-ordinator for Costing and Pricing, JCPSG. Background Government expectations/commitment JCPSG, TRAC and its strategy Additional support for Research Councils Cost-based pricing based on TRAC Market-based pricing Sustainability. fEC

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Practical issues of fEC

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  1. Practical issues of fEC John Newton National Co-ordinator for Costing and Pricing, JCPSG

  2. Background • Government expectations/commitment • JCPSG, TRAC and its strategy • Additional support for Research Councils • Cost-based pricing based on TRAC • Market-based pricing • Sustainability

  3. fEC • Full economic costs based on TRAC – definitions of • activities, data, validation, testing, internal audit • Definition of fEC • Cost models and rates vary between institutions • QA process – Cardiff has robust processes now but…. • Rates calculated for Estates and Indirect costs – generic and lab-based departments • Breakdown of costs: • Directly Incurred (DI) • Directly Allocated (DA) • Indirect • Exceptions

  4. Directly Incurred (DI) costs • DI costs are: • explicitly identifiable as arising from the conduct of the • research; • are charged on the basis of the cash spent; and • are verifiable and auditable from accounting records • Types include: • Staff specific to a project – underpinned by an auditable • record (e.g. Technicians, RAs, consumables, travel, • equipment) • Facility usage –if usage/project and auditable costs charged on the basis

  5. Directly Incurred (DI) costs • Issues • Names of staff • RAs and RFs wholly working on the project and all salary • costs charged to the project treated differently to those working on a variety of projects • Hours in total over project • Cannot use pay bandings. Use actuals. • Use of equipment funded by Research Councils/double • Counting • How are estimates derived? Note later justification for audit. • Recording of costs as expenditure made • Indexation

  6. Directly Allocated (DA) costs • DA costs are: • shared costs based on estimates; and • do not represent actual costs on a project-by-project basis • Types include: • Departmental technical and administrative service staff • Costs to projects, based on a charge-out rate related to estimated costs

  7. Directly Allocated (DA) costs • Issues • PIs/Co-investigators – change from current procedure • Costs of staff that work on several projects are generally • directly allocated • Names • Hours (based on estimates – no timesheets) • Charged on the basis of standard charge-out rates and • estimated time • Lab technicians to be directly allocated by 1 August 2007 • Research Councils will not fund PIs more than 1650 hours/year – 100% of salary • Costs of major research facilities to be directly allocated by 1 August 2007 • Reconciliation between actual and estimated hours • Agreed estimated costs paid – no more, no less • Pay bandings – TRAC • Peer reviewers see all costs but not basis • Estates – FTE based on research staff on project or sq m • Indexation

  8. Estimating academic staff time/project (1) • General • Pay bandings/actual salary costs • 1650 hours • Hours conversion to FTEs • Confirmation of time estimates annually or as • required • Do not include time spent training or supervising • project or tied studentships on project but record • separately. • Determine total hours for project

  9. Estimating academic staff time/project (2) • Points to consider • Whether PI or Co-investigator • How many on project • Experience of RAs • General experience/aptitude • No. of partners • Type of equipment • No. of papers o be written • Sponsor requirements • Can include writing up time • Do not include dissemination • Methods • Zero-based • TRAC data • Time/RA – weighting as appropriate • Standards of department • Experience of older researchers • Peer discussion • -

  10. Indirect costs • Cost driver model • Consists of: • - the Support time of academics • - clerical and administrative staff in • - academic departments (exc. DI/DA costs) • - non-staff costs in academic departments • - central services • - estates costs of central service departments • - COCE • 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

  11. Exceptions • Include: • 100% fEC of equipment over K£50 threshold (total) • 100% of project studentship stipends and tuition fees (where applicable to project). Do not include as part of FTEs • Note indexation

  12. General • Charge-out rates to be determined by Finance but in liaison with all other relevant staff • Costs used to establish the indirect cost, estates cost and all other charge-out rates are reconciled to the financial statements plus the two cost adjustments • Rates can be revised for cost purposes but additional costs will not be paid • No double-charging • Terms and conditions for Research Council grants published in March 2005 - see http://www.pparc.ac.uk/jes/TCfECFinal.pdf • Peer Review and fEC. See http://www.pparc.ac.uk/jes/DSR_PeerReviewFAQv1.0.pdf

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