September Presentations to Staff1 Transparent Approach to Costing (TRAC) : an update

September Presentations to Staff2 Government Requirement July 1998 comprehensive spending review Timescale is pre-determined Phased implementation with whole sector reporting from June 2001 Multiple agendas –Accountability for public funds (government) –Satisfy research sponsors (councils & others) –Joint costing and pricing steering group strategy ‘integrating financial and academic decision making’

September Presentations to Staff3 Transparency Review 1. Background 2. Limitations of the data 3. The way forward 4. Conclusion

September Presentations to Staff4 1. Background Objective of the review 99/00: “To establish a transparent and uniform approach to the costing of research (and other outputs) that can be implemented by universities and colleges at reasonable cost.” Now in 2004: “To extend methods to permit full economic costing of teaching, research and other activity at project level…. to satisfy Research Councils’ requirements.”

September Presentations to Staff5 1. Background: Costing Robust academic time allocation Understand activity drivers for non-staff costs –space, library/learning resources, IT Indirect costs to be fixed £/FTE Hence basis for realistic pricing Reduced on-going costs for HEI’s- should become embedded in normal institutional management processes

September Presentations to Staff6 1. Background: Policy Govt. Accepts sector has good cost management Public sponsors recognise real cost of R and T Higher recovery rates from govt., Charities, RC’s 4-5% insured asset value to renew & upgrade infrastructure Institutions have improved business processes Costs of transparency seen as commensurate with benefits

September Presentations to Staff7 1. Background: Figures to Be Reported Costs & Income of teaching, research and other T and R- publicly and non-publicly funded Ten figures auditable and reconciled to accounts Annual on previous year’s accounts Signed off by head of institution Backed by supplementary information –T,R,O by department, –R by sponsor type Research Proposals based on full economic cost

September Presentations to Staff8 2. Limitations of the Data Lack of Staff time data since 2000/1 Cost apportionment used to allocate costs within schools to the five TR headings –TPF, TNPF, RPF, RNPF, Other –Costs need to be split between teaching and research on basis of specialist space then further divided within categories on staff time –Staff office space divided on basis of split teaching: research %

September Presentations to Staff9 2. Limitations of the Data Cost pools group expenses –Need revised grouping of central support costs –Need to analyse property costs, particularly depreciation Cost drivers determine how these costs are shared across individual schools –Calculated by stepped method which assumes only schools generate costs –Need to revise allocation of estates costs- currently only core school space counted without allocating space related to booking of central teaching accommodation, estates is a major driver and various weighted models need to be considered.

September Presentations to Staff10 3. The way forward All Schools required to participate Value of information depends on high staff participation and positive feedback TWC to improve cost pools and drivers Need to incorporate routine data collection and processing within University activities –IT solutions: Full electronic data collection & new web site to be launched for information.

September Presentations to Staff11 3. The way forward Benefits will be: Will satisfy the Govt that UoG are a responsible recipient of funding Potential to increase research income and external income Better informed pricing decisions Improved cost management Better basis for allocation of resources & planning Better understanding of cost structures & drivers investment appraisal

September Presentations to Staff12 We need your help! Heads of Department to brief staff on the importance of Transparency (TRAC) 5 weekly time schedules to be completed by December 2004 for 2003/4 data 6 weekly time schedules to be completed by June 2005 for 2004/5 data From August 2005 staff only need to fill in 6-8 time schedules every 3 years Data will not be used except for allocating costs for the return. No other Dept. will have access