1. What is FEC? Full Economic Costing

2. Background  1998 Spending Review – Extra Research Funding  TRAC: All Universities were in deficit for research Significant underspend in infrastructure  In 2002 additional funding was awarded plus initiatives like SRIF 1 and 2, SRIF 3, JIF, and SPUR 1 and 2 in NI  Overall aim of FEC is sustainability of the research base

3. What is Sustainability? The University is being managed on a sustainable basis. If taking one year with another it is recovering its FEC across its activities as a whole and is investing in its infrastructure at an appropriate rate to maintain future productivity This will require the calculation of FEC

4. FEC Cost Types and Definitions Directly Incurred (DI): Expenditure that is incurred specifically for the project such as new staff, travel, consumables. Directly Allocated (DA): Estimated costs of services (such as existing staff time and facilities) used by the project that are shared by other activities and projects. Indirect: University Overheads allocated to the project. Central administrative cost.

5. Facility (i.e. estates) and overhead (i.e. indirect) costs are based on the academic/research hours spent on the project. Estates Cost: £15,697/FTE Lab £9,417/FTE Desk Indirect (ID):£30,380/FTE FTE, Full time equivalent (1 person for 1 year x 100%) Procedure to establish the rates are audited.

6. Research Council Definition  Standard Year =1,650 hrs =44 wks  Hours in Standard Week=37.50 hrs

7. Choices – Costing v Pricing  No choice with cost – FEC method gives cost  Do have choice with price i.e. 50% of FEC 70% etc Funder ‘type’ sets the %  Strategic pricing at less than 100% of FEC will require high level approval

8. FUNDER% FEC Research Councils80% UK Charities *No change to present methodology European Commission *No change to present methodology Local Authority100% Industry/Commercial100% UK Government **100% NHS Trusts80% R&D Office80% The proposed costing and pricing policy for University of Ulster external grants is as follows: - * FEC will still be calculated – Partnership Fund ** NI Departments, particularly Invest NI, will be kept under review for strategic reasons to see if 100% will apply to projects funded from this source