Chris Beynon (DRI)

Research Projects – Budget Preparation Chris Beynon External Funding Officer Department of Research and Innovation

Agenda  Overview  Costing Models  Directly Incurred Costs  Non-FEC Model & Example  fEC Model  Example – FEC Costing  Résumé  Q & A

Research Support Office (RSO) The RSO provides support, advice and guidance to all University staff Each School has a designated Pre-Award and Post-Award Officer Pre-Award supports activities up to the point of award (including contractual negotiation) Post-Award provides support in the financial management of grants

Project cost vs price Cost – cost to the University of all the resources needed to complete the project Price – amount actually paid by the funder

Terminology Direct Costs – costs attributable to the project, which may be:  Directly incurred – new costs which would not be incurred if the project did not go ahead e.g. research assistant salary, equipment, consumables OR  Directly allocated - costs that can be estimated to projects e.g. Principal investigator time, general technical assistance. Indirect Costs – costs which cannot be identified precisely for each research project, including items such as library, central services and departmental administration. Without this infrastructure research could not go ahead

Overview – Costing Models A research proposal will usually contain basic financial costs which may be defined under several major categories, depending on the cost model employed by the Funder The common models are based on  Full Economic Costs (fEC) i.e. true cost to University  New Costs plus overheads as a % of salaries (standard pre September 2005)

Overview – Costing Models Definition of fEC “A price which, if recovered across an institution’s full programme, would recover the total cost (direct, indirect and total overhead) of the institution, including an adequate recurring investment in the institution’s infrastructure” Introduced September 2005 for UK Research Council applications Now in use for some schemes offered by other funders, e.g. the Department of Health, British Academy

Overview – Costing Models Research Councils – will pay 80% of fEC (rest from Quality Research (QR) and institution’s own funds) Government Departments – per HM Treasury “should expect to pay 100% of FEC for research commissioned from universities” Charities – will continue to only pay directly incurred costs, therefore ensure any costs that can be classed as direct costs are included. Industry – pricing is market-based not cost-based but introduction of fEC should exert upward pressure on pricing and cost recovery as institutions start to understand full costs EU framework (FP7) – complex new model introduced with interim 60% overheads and 75% intervention rate (essential to consult DRI for budget preparation)

fEC Model - Objectives for fEC Universities to achieve sustainability by:- Establishing and recognising the fEC of activities Securing better prices Improving project management and cost recovery Investing in the institutional infrastructure Managing activity strategically - increased emphasis on management and teaching portfolios

Overview Always read the Funder’s Terms and Conditions in  Website  Scheme Guidance Notes Check  The Funder’s Priorities  Principal Investigator (PI) Eligibility Rules  Allowable Costs  Submission Route  Deadline

Directly Incurred Costs (DI) – fEC & non-fEC Directly incurred Costs are new costs specific to the project and include: Salaries of Staff employed on Project Equipment Travel & Subsistence Other Costs (e.g. consumables, recruitment, PC/laptops, sub-contractors)

Directly Incurred Costs – Staff Salaries To prepare estimate of staff costs with Sirius Cost Calculator ( Start & End Date of Employment % Full Time Employment Grade/Spine Point Classification e.g. Academic, APM, Technical

Directly Incurred Costs – Research Assistant Salary

Directly Incurred Costs – Technician Salary

Directly Incurred Costs – Non Salary Costs Equipment – purchase, VAT, installation and set-up, maintenance contract and insurance (Quotations may be required - refer to University Finance Department’s Procurement Website and Funder’s Guidelines) Travel and Subsistence – essential research project meetings, conferences directly relevant to project Consumables, including laboratory reagents; software licences; essential specialist publications; recruitment costs Replacement Teaching Costs; essential Staff Training & Development costs Project studentship fees and stipends

Non fEC Model – Indirect costs Sometimes known as overheads Refers to costs of room space, heat, light, water, University and School administration, such as library and computing facilities, departmental secretarial and technical services Overhead costs are NOT met by Charities Typically overheads may be charged as a % of total staff costs Consult Funder’s Terms and Conditions for eligibility and maximum overhead rate

Non fEC Model – Example

fEC Model – Cost Headings Costs are broken down according to four fund headings: DIRECTLY INCURRED DIRECTLY ALLOCATED INDIRECT COSTS EXCEPTIONS Note: Only academic and research staff draw down fEC costs

fEC Model – Directly Allocated Costs NB: Use the fEC Cost Calculator on DRI website for Swansea University costs Collaborative projects - partner HEIs to provide their fEC calculation Investigators’ Costs (PI and Co-I)  Estimate of time spent on project  Based on 100% FTE = 1650 hours/annum (44 hours/week)  Principal Investigator (PI) & Co-Investigators (Co-I)  Use of salary bands (e.g. Professor, Senior Lecturer, Lecturer 9, Lecturer 8)

fEC Model –Directly Allocated Costs (DA) NB: fEC Cost Calculator automatically calculates costs from total investigator/researcher time on the project Estates charges  Standard costs based on predominant departmental usage (Lab/Classroom)  Charge will be per FTE for academic & research staff only Infrastructure technician – Lab-based Schools only Other DA costs are already factored into the Swansea rates, e.g. use of most major research facilities & pool staff Charge out rates for two major facilities – CSAR and nanotechnology centre & one small facility

fEC Model – Indirect Costs NB: fEC Cost Calculator automatically calculates this cost Library services / learning resources Clerical/ secretarial Departmental services Central & distributed computing Cost of capital employed

fEC Model – Exceptions Equipment - New purchases of equipment remains a directly incurred cost. The Research Councils will fund up to £50K of equipment purchased on a project at 80%, and the remainder at 100%. Project Students – Student stipends and tuition fees will be funded at 100%

fEC Model – Preparing the costs Two online forms are available to help with costing your proposal: Sirius (DI staff salaries) fEC Cost Calculator (Investigator, estates and indirect costs) rt/Pre-award/ApplicationResources/ For UK Research Council applications, obtain a registered account (see Research Councils UK and )

Note: Laboratory - estates £ 12,139 Classroom - estates £ 6,181 Indirect £ 34,081 Lecturer 8 £ 40,426 Lecturer 9 £ 52,570 Senior Lecturer £ 64,572 Honorary £ - Professorial £ 83,089 Clinical - Lecturer £ 45,100 Clinical - Consultant £ 118,776 Technician £ 939

Example fEC costing – Research Councils

Résumé – Points to remember Check Funder’s guidelines for eligible costs Directly Incurred Costs (DI) to the Project are calculated in the same way for each model For non-fEC applications, estimate overheads if allowable For fEC applications, estimate PI and Co-I time on the project For fEC applications, use the fEC Costing Form to calculate the Directly Allocated, Estates and Indirect Costs Transfer fEC costs to Funder’s application form (e.g. Je-S)

Résumé – Notes Swansea fEC rates are reviewed annually by the Finance Department & the fEC Costing Form posted on intranet in February (follow link from pre-award website) Although Research Councils fund 80% of fEC, award holders receive 100% of the Directly Incurred Costs to manage the Project University policy is to prepare ALL applications for external funding under the fEC model, unless the Funder specifies otherwise Applications > £100K may require risk assessment BEFORE submission. Applicants must liaise with Ciaran Whyte, Planning and Strategic Projects Unit

Résumé – DRI Support Consultations via One-to-One meetings or , including advice on budget preparation Plan ahead – allow time for alterations & obtaining partner fEC costs AT LEAST 5 WORKING DAYS before deadline, calculate costs, forward costs to DRI for checking At least 4 working days before deadline, submit final document to School approver for submission to DRI 2 working days before deadline, DRI authorizer submits proposal electronically/signs document Web link t/

Résumé – DRI Support This timetable is the minimum required to get the application through the submission process - please allow more time whenever possible. For applications received less than 2 working days before the deadline, DRI verification may not be possible. Therefore the School must bear the impact of any inaccuracies or omissions.

Résumé – DRI Contacts Ceri Jones: Deputy Head, DRI: ext 5412 Julie Williams: Senior External Funding Officer, DRI: ext 5824 Pre-Award Team – Chris Beynon: ext 5015,  School of Environment & Society; School of Business & Economics; School of Law; Medical School (Biomedical) – Debbie Saunders: ext 2094  School of Human Sciences; School of Arts & Humanities; Medical School (Health Services Research) – Adrian Walters: ext 3724,  School of Engineering; School of Physical Sciences; School of Health Science

Preparing Research Application Budgets Thank you for your time Any Questions?