full economic costs (fec)
DESCRIPTION
Full Economic Costs. Staff presentation. June 2008. overview of fEC and link to TRAC to review fEC - the Government costing model for HEIs (in place as since September 2005) introduce recent changes to fEC and potential impact to department budgets - PowerPoint PPT PresentationTRANSCRIPT
Full Economic Costs (fEC)objectives of presentation
Full Economic Costs
Staff presentation
June 2008
• overview of fEC and link to TRAC
• to review fEC - the Government costing model for HEIs (in place as since September 2005)
• introduce recent changes to fEC and potential impact to department budgets
• to discuss how fEC is handled at QMUL
• pre-award considerations
• post-award matters and reporting
TRACFull Economic Costs
Staff presentation
June 2008
what is TRAC?It isn’t:
TRACFull Economic Costs
Staff presentation
June 2008
Uses standard methodology for costing our main activities• teaching• research• other
Uses staff surveys to allocate academic time
Use of cost drivers to allocate space costs and all other overhead costs e.g. Finance Department
Introduced to look at the cost of undertaking research.
Now it has been expanded to calculate the cost of teaching
Transparent Approach to Costing
TRACFull Economic Costs
Staff presentation
June 2008
why is it important?
It enables the College to calculate the cost of its major facilities in a uniform way
It enables the College to calculate the cost of teaching
It is likely to be used by the funding council to determine our annual grant
It is used to calculate the rates for full Economic Costing
TRACFull Economic Costs
Staff presentation
June 2008
why is it important?
If we do not follow TRAC guidance this is what could happen:
TRACdefinition of fEC
Full Economic Costs
Staff presentation
June 2008
“A price which, if recovered across an institution’s full programme, would recover the total costs (direct and indirect) of the institute including an adequate recurring investment in the institution’s infrastructure”
TRACwhat makes up the fEC?
Full Economic Costs
Staff presentation
June 2008
fEC is made up of:• directly incurred costs• directly allocated costs• indirect costs• exceptional costs
Research councils will pay a fixed percentage of 80% of these costs as the total grant (excluding exceptional costs)
Charities are exempt from fEC and continue to pay full direct costs only
Other sponsors have adopted a partial-fEC approach
Government organisations have been instructed to pay out at 100% fEC
TRACwhat makes up fEC?
Full Economic Costs
Staff presentation
June 2008
DI Costs DA Costs Indirect Costs
Exceptional Items
RAs PI & Co-I costs
full indirect costs
equipment > £50k
lab technicians
estates costs PGR stipends
travel pool technicians
PGR tuition fees
consumables & equipment < £50k
TRACdirectly incurred costs
Full Economic Costs
Staff presentation
June 2008
• research assistants• travel and subsistence• consumables• new equipment – 100% of costs will be paid above a threshold of £50,000 (but only 80% of the £50K below the threshold) Actual costs; can vire between headings
TRACdirectly allocated costs
Full Economic Costs
Staff presentation
June 2008
• PI & Co-Investigator costs• estates costs• pooled laboratory technicians• use of major research equipment/facilities
These are based on estimated costs, not actual costs
Directly allocated costs cannot be vired
TRACPI time
Full Economic Costs
Staff presentation
June 2008
• use 1650 hours per year as 1.0 FTE (220 days x 7.5 hours)• include time for project management, writing papers, dissemination & final report writing• use ‘salary bands’• individual PI time charged to RCs/public funders is not to be double charged, i.e. <100%• need systems for accurate estimating of time required and simple record of time spent e.g. notes/log book, meetings, etc.
TRACestates cost
Full Economic Costs
Staff presentation
June 2008
• separate from indirect costs• the £/fte charge applies to PI, PDRA, Co-I, visiting & PGRA (weighted)• there are different rates for type of space: Estates - classroom rate per fte Estates - laboratory rate per fte – excludes cost of laboratory technicians and Major Research Facilities (MRFs) Three MRFs have been identified – BSU, Genome Centre and Nanovision• will not change over life of project but is indexed for inflation
TRACindirect costs
Full Economic Costs
Staff presentation
June 2008
• includes all central service departments including their estates costs and support time of academics• is a set charge per FTE, recalculated annually• the £/fte charge applies to PI, PDRA, Co-I, visiting & PGRA (weighted)
pre-awardeligible and ineligible costs
Full Economic Costs
Staff presentation
June 2008
Eligible costs are “project specific, based on actual costs and auditable”This must be explicit within the application/justification of resources
Included within the estates/indirects:• redundancy costs• maternity costs• maintenance and insurance costs of existing equipment
Need to avoid double counting
Facilities costs – QM only just setting up to handle Major Facilities Centres. Running costs of all other facilities already form part of our estates and indirects
pre-awardthings to note
Full Economic Costs
Staff presentation
June 2008
Staff time on projects to ensure 100% DICProjects that run at a loss need to be signed off
Including technical and clerical support on grants• STFC have standard guidelines, other councils vary• departments must ensure that sufficient support costs are being requested• pooled staff and the use of DA vs DI
Emeritus status and contract staff• post must outlast project and support given by department during period of grant
Joint projects• costings provided by host institutions• costs must be approved by RGA prior to submission
pre-awardthings to note
Full Economic Costs
Staff presentation
June 2008
EU grants are routinely being under-costed and not being passed for internal approvalAs with UK/OS funding these grants will not be accepted unless the department agrees to pay the shortfall
Use of “ball park figures” in outline proposals is not acceptable
Audit requirements• must have a complete paper-trail – costing to application form to award to post-award and final reports• PI/Co-I commitments
post-awardcalculation of internal budget
Full Economic Costs
Staff presentation
June 2008
20% unfunded by the sponsor is supported by the PI/CoI time, estates and indirect costs
Residuals are transferred to the dept’s overhead account i.e. XXX1000
post-awardFull Economic Costs
Staff presentation
June 2008
fec award Internal Budget
Direct Incurred Staff 129,777.55 113,477.00 129,777.55
Studentship & Fees 48,029.00 48,029.00 48,029.00
Travel & Subsistence 16,074.00 12,859.20 16,074.00
Directly Incurred Costs 12,170.00 9,736.00 12,170.00
Exceptional Items 0.00 0.00 0.00
Equipment 43,743.00 34,994.40 43,743.00
Consumables 0.00 0.00 0.00
Recruitment costs 1,500.00 1,200.00 1,500.00
Other DA - Technician - J Dupuy 2,395.00 1,916.00 2,395.00
Tuition Fees 10,609.00 10,609.00 10,609.00
TOTAL DIRECT 264,297.55 232,820.60 264,297.55
allocated staff 19,967.00 15,973.60
est 29,389.00 23,511.20
idc 125,700.00 100,560.00
totals for overheads 175,056.00 140,044.80
Total awarded 372,865.40
Overhead Budget 108,567.85
Total Income 372,865.40
Overheads as a % of directly incurred staff 82.14%
post-awardfinancial management of project
Full Economic Costs
Staff presentation
June 2008
• planning required by the PI – more accountability• virements between DI and DA costs are not allowed• funds provided for equipment costing more than £25,000 may not be used to buy other equipment, nor transferred to another heading, without prior written approval• DI Staff – Indirect and estates costs are driven by man months and not values as with pre-fEC grants• implications – any reduction in man power will result in a loss of income to the dept• support Staff – DI or DA costs?• DI – Project specific posts – time sheets required for appointments less than 1 fte• DA – Support staff who are appointed over several projects or pool technicians• studentships are funded 100%. It is expected that a student will be charged for the full term of the appointment. Partial studentships to use funds is not acceptable.
post-awardactivation of grant
Full Economic Costs
Staff presentation
June 2008
No change – grant must be activated with the appt of DI staff
Non-staff expenditure must not be charged prior to this dateException – when DI staff costs are not awarded then the grant may be activated by ‘Other DA Costs’ e.g. support staff
Note: Starting Certificates must be submitted within 42 days of the start date. Failure to inform RGA that the grant has been activated will result in the grant lapsing
post-awardfinal reports
Full Economic Costs
Staff presentation
June 2008
Change – From 1 April 2008 you will need to attach an accompanying document as part of the JeS validation. You will provide a short statement describing whether there was any significant difference between the planned and actual expenditure on the grant, and providing reasons for the difference if this is the case.
post-awardsustainability
Full Economic Costs
Staff presentation
June 2008
fEC is here to stay – need to recognise implications
Loss of income is not an option!