1. Equipment Costing Workshops Costing and charging for equipment that can be shared with external institutions (and implications of charging internally) Finance Division Jonathan RoseKarl Wilson fEC AccountantDeputy Finance Manager Jonathan.Rose@admin.cam.ac.ukKarl.Wilson@admin.cam.ac.uk

2. Equipment sharing initiative – background Why are we here? RCUK revised guidance on equipment funding from May 2011 Increase in threshold for minor items to £10k (inc. VAT) Justification of all items £10,000 > £135,668 Evaluation of existing capital assets required (both within the institution and at other accessible locations) If successful, RC’s contribution likely to be limited to 50% of cost. Full business case for all items of equipment > £135,668 Equipment sharing Working Group formed by ROO Creation of equipment sharing database to facilitate asset evaluation Southern Regional Equipment Sharing Group

3. Format of the workshop 1.Presentation: a)TRAC and the Full Economic Cost (fEC) rates for Research b)Costing and accounting for Small Research Facilities (SRFs) c)Costing equipment to be shared with external institutions (Deadline 1 st June 2012) 2.The new equipment costing template – a detailed look 3.Break – biscuits! 4.Over to you – group discussion / questions and answers 5.Final thoughts and reminders

4. 1 (a) TRAC and the fEC rates for Research TRAC (Transparent Approach to Costing) – activity based costing method Formal return required by all HEIs to HEFCE/RCUK Attributes expenditure (per FS) to activity (also includes income) Identifies the direct costs of research and the indirect costs Indirect costs used to calculate our fEC rates: Indirect rate Estates rates (Lab and Non-lab) Infrastructure Technician rate Rates adjusted for costs recovered through MRF and SRF charges

5. 1 (b) Costing and accounting for SRFs Requirements of MRFs/SRFs strictly defined in TRAC guidance Any charge made to a Research Grant which relates to more than just consumables expenditure must = SRF! Annual process initiated by fEC Accountant: Costing template issued to capture data and meet TRAC requirement Annual “Full Economic Costs” to be identified Must be costs that are actually (or expected to be) incurred. No central or estates costs for SRFs Ensure costs can be accurately captured (i.e. through CUFS cost centre)

6. 1 (b) Costing and accounting for SRFs

7. 1 (c) Costing of equipment shared with external institutions Small Research Facility (no external sharing) Equipment shared externally (no internal charging) Include direct costs associated with running equipment Optional to include replacement costInclude replacement cost Do not include estates costsInclude estates costs Estimates of different types of usage (Teaching, Research etc.) important! Estimates of different types of usage less important Must have auditable records (potential to be audited by RC’s) Not likely to be subject to audit by RC’s Must account for costs re-charged to Research Grants each year No costs will have been recharged to Research Grants

8. 2. Costing template for externally shared equipment

16. Equipment costing workshops BREAK TIME!

17. 5. Final thoughts and reminders Charging for shared equipment Internal users Internal users will not be charged No action required DI consumables only? Re-charge at cost (Not an SRF) More than just consumables? Cost and charge as SRF External users Calculate full fEC (using new costing template) Charge full fEC price Decision tree:

18. 5. Final thoughts and reminders Factors to consider if already an SRF: Two charge out rates: 1) Normal SRF rate(s) 2) External sharers rate(s) (will be higher!) Grouped equipment:1) Separately cost equipment with different types of usage – rates will vary depending on type of use 2) Group equipment together and cost as one “facility” using assumptions about usage of each item – then calculate an overall rate per hour/day.

19. 5. Final thoughts and reminders General: Keep a usage record (see hand-out for an example) Particularly important with SRFs! Records for the whole year will help when setting the price Coding of income and costs: Set up a specific cost centre in CUFS – especially SRFs Journal costs across (monthly) / or directly code invoices on AP. Making re-charges: External to the University = external invoice Internal = internal trading invoice SRF internal to department = transfer of expenditure (not income - see hand-out)

20. 5. Final thoughts and reminders Timetable: Action Newly identified sharable equipment SRFs Initial costing completed 1 June 2012N/A Next review of costing October 2013October 2012 Subsequent costing reviews Annually thereafter

21. 5. Final thoughts and reminders Help, advice and support: Department / SchoolFin Div. supportContact details PhysicsJonathan Rose(7)66946 ChemistrySteve Wilson(7)60770 All other Physical Sciences depts.Annie Baxter(3)30582 Technology depts.Daniel Greenfield(3)30700 Biological Sciences depts.Karl Wilson(7)66904 Clinical School depts.Dean Harper(3)36705

22. 5. Final thoughts and reminders Any questions?