Full Economic Costing

fEC (Full Economic Costing) is a development of TRAC, the Transparent Approach to Costing, which is a costing methodology now used in all UK higher education institutions

The first focus for the implementation of fEC has been Research, helping to calculate the full economic cost of individual research projects and the recovery of that cost where possible. The benefits to the University have included additional funding with a contribution towards sustainability, improved costing methods and management processes, and increased stakeholder confidence.

The initiative was extended to include the identification of Teaching costs at HESA Cost Centre level in 2007.

The extension to all Other university activities is under review.

Implementation of fEC

The University’s fEC Project was in place from 2005-2008.

The project was set up to implement university wide training, comprehensive documentation process a university wide communication programme. A robust Project management structure was also introduced to ensure the deliver of the requirements of fEC Research and TRAC Teaching.

At appropriate stages during the project tasks have been embedded. RSD related tasks were fully embedded in February 2007, as agreed by the fEC Project Board. Embedding of tasks in Finance Division and PRAO began in 2007 and was finalised in 2008.

It was agreed at the fEC Project Board meeting held on 8 November 2007,
“…that theGroup could consider the project as having been completed successfully”.

Post Project

Quality Assurance

A new Sector wide process for the validation of TRAC/fEC processes within universities has now been introduced. The Quality Assurance Validation (QAV) process has been developed by Research Councils UK (RCUK). It aims to provide a mechanism to ensure that the TRAC methodology is being applied correctly across institutions, and that all costs are being calculated correctly. In parallel, the process provides assurance to the Research Councils on the application of fEC methodology in applications and the calculation of the fEC rates. The process also provides assurance to the Higher Education Funding Councils that they can place reliance on the figures in the annual TRAC Return.

The process comprised the completion of a detailed self-assessment questionnaire submitted to RCUK in January 2008 (the questionnaire was sent to the Project Board before submission) and an audit visit undertaken by KPMG on behalf of RCUK. Sanctions could be imposed if universities were found not to be compliant. The visit took place in July 2008 and the University was found to be applying all areas of TRAC/fEC in line with guidance.

TRAC Teaching Return

The University’s first mandatory Return was submitted to HEFCE in April 2008. This is now an annual requirement with future submissions made to HEFCE in February each year.

Final Embedding of fEC.

The process of agreeing and confirming responsibility for ongoing tasks and acceptance process has been completed. The following remaining management structure remains for the time being:

  • TRAC Teaching Steering Group - The University convened a TRAC Teaching Steering Group in March 2007 to take forward the University’s approach to this requirement overseeing the production of TRAC Teaching Return to HEFCE and submitting regular reports to the University’s Planning and Resources Committee. The Steering Group is to continue for the foreseeable future to ensure the ongoing development of the quality and understanding of the data.
  • Officer Groups. To ensure the ongoing embedding and benefits of TRAC/fEC two Officer Groups currently remain in place.

Other areas of post project work include:

  • Look to extending TRAC/fEC to all remaining university activities as outlined in the HEFCE Financial Memorandum.
  • The ongoing development of management information in conjunction with Schools/Departments/RSD, to feed into the University’s planning process and inform strategic and policy decisions.
  • Sustainability: an overarching aim of fEC is sustainability and universities must be in a position to measure this by 2009.
  • Review of the University’s Research Income Policy.
  • Review the link between TRAC/fEC and the University’s Resource Allocation Model.
  • Final Post Project Evaluation Report.
  • Ensure embedding requirements are understood and implemented across the relevant Divisions of the University
  • TRAC Teaching – development of data quality and identification of costs e.g. widening participation etc. and developing the University’s overall approach through other internal related groups.
  • Understanding the costs of post graduate research students.