Background information

From out of the welter of Higher Education sector acronyms come TRAC and fEC.

What are they and how have they become linked?

TRAC is shorthand for the Transparent Approach to Costing.

The government was concerned that despite the size of their budgets, many Higher Education Institutions were unable to say how much they spent on their core activities: Teaching and Research.

In financial jargon, separation of costs is known as 'costing'. (Confusingly, so is the process of estimating costs for a project, or product).

Hence, via a cascade of groups and bodies come TRAC - the Transparent Approach to Costing. Laid out in 3 manuals were instructions on how an institution was to split its costs between Teaching and Research. There was an 'Other category' and some significant sub and sub-sub categories, but the object was to report a division of costs at the level of the whole institution.

The process of implementation was phased over 5 years, with the process being completed by July 2004.

History of TRAC and Requirements of Phase 1

Now comes phase 2. Having set up the appropriate systems in phase 1 (TRAC), Higher Education Institutes now have received TRAC Volume III dedicated to Full Economic costing (fEC).

In essence, while phase 1 asked Higher Education Institutions to split their cost for Teaching and Research across the whole institute, fEC is about attributing costs to each individual project or activity. While the current (Autumn 2004) emphasis is on research projects, fEC methodology can be applied to any activity in particular Teaching.

The fEC approach will become compulsory for the principal government funders of research, the Research Councils, from September 2005. Higher Education Institutes are encouraged to use it as a basis for all other research funding applications from the beginning of 2005.

What is fEC?