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Planning and Resource Allocation Office

 

Transparent Approach to Costing (TRAC), Time Allocation Survey (TAS) and Full Economic Costing (fEC)

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

The 3 main stages of the process were as follows:

The Transparent Approach to Costing (TRAC) was introduced in main 3 stages:

1. TRAC Return 

This was introduced in 1999 across the Sector as a method of identifying the costs of Teaching (public and non-publicly funded), Research (public and non-publicly funded) and Other activities at institutional level. The TRAC Return, which now also includes income against each of the five headings, continues to be submitted to HEFCE each year. This costing methodology is used as the basis of the production of the University's fEC rates, and data for TRAC Teaching.

A pre-requisite of this first stage of the TRAC process was to quantify general levels of Research under-funding. It also highlighted significant problems of investment in the HE infrastructure across the sector.

 2. TRAC Full Economic Costing (fEC) Research

This second stage was introduced across the Sector in September 2005. This in effect applied the TRAC methodology at an individual research application level.  fEC provides a method to calculate the full costs of research projects leading to improved cost recovery in order to improve the sustainability of research.   Pre-fEC the absence of robust data on the full economic costs of research had led institutions to underestimate the costs of research. As such grant applications were made mainly on the basis of direct costs together with a fixed allowance for overhead cost where these were recoverable from sponsors.  

3.TRAC Teaching  

This third stage was introduced in 2007 to develop and implement a national framework for the costing of teaching based on the principles of the TRAC methodology. The purpose is to identify Teaching costs by subject for HEFCE fundable students. This produces data at Subject Level (HESA cost centre level) to inform the review of public funding teaching methodology by HEFCE. From February 2008 an annual TRAC Teaching Return has to be submitted to HEFCE.

The introduction of fEC has been consistent with the requirements and guidance as set out in TRAC Guidance

Implementation of fEC

At Cambridge, a Steering Group was set up in April 2004 to oversee the introduction of fEC which recommended the setting up of a project to manage its introduction. 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 delivery of the requirements of fEC Research and TRAC Teaching.

At appropriate stages during the project tasks were embedded. Research Services Division (now named Research Operations Office) 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 the Board could consider the project as having been completed successfully”.

Post Project

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 an Officers’ Group will remain in place.

Other areas of post project work include:

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.
Review the relationship between TRAC/fEC and the University’s Resource Allocation Model.
Ensure embedding requirements are understood and implemented across the relevant Divisions of the University