Frequently Asked Questions (FAQ's)
Q: What is fEC?
A: Full Economic Costing is a method of costing
projects and activities that takes into account all direct and indirect
costs, including an element for sustaining the institution over the
long term.
Q: What is TRAC?
A: The Transparent Approach to Costing introduced
the financial systems required to support the costing of Teaching,
Research and Other activities at the level of the whole institution.
The exercise is based on historic data.
Q: TRAC and fEC
are both “Costing”. What is the difference?
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TRAC
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fEC
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Timing |
Retrospective |
Forward-looking |
Level of detail |
Institution |
Project / Activity |
Purpose |
Bench-marking |
Informs pricing decision |
Q: Why
do we need TRAC and fEC?
A: To become sustainable. The HE sector is becoming
more “commercial” in its relationships with its stakeholders
and has had to adopt “fuller” internal systems in response.
The JCPSG have promoted TRAC as a part of such systems in order to
bring the sector up to speed at a relatively uniform rate. The detail
of TRAC has been about costing, but the message is about Sustainability.
Q: What is sustainability?
A: Being able to keep going in the long run. Obviously,
knowing the cost of a project is not going to make an institution
sustainable. That requires (successful) strategic thinking. But strategic
thinking and decision-making depend on good information, and TRAC
and fEC are designed to provide part of that information.
Q: Who
has to use TRAC and fEC?
A: fEC – Everyone planning a new project;
TRAC – Senior Management, and the annual HESA Return.
Q: What
is the process of “Costing”?
A: Calculate the fEC cost using the new Project
Costing Form (PCF);
Calculate the price:
- Using Sponsor rules; or
- Using market information;
- Identify source of top-up funding if there is shortfall (ie Cost
exceeds Price);
- Obtain Head of School approval.
Q: When does
it start?
A: fEC based costing of projects is mandatory from
1st August 2005 (New financial year). TRAC “started” in
1999.
Q:Is
there any training in fEC?
A: Training sessions for School-based staff have
been run from March to June 2005, covering the background and general
principles.
The University is purchasing fEC Project Costing Software (from
InfoEd) and will offer training in its use from its implementation
(expected February 2006)
Until then, the Research Accounting Section are providing
extra help by taking data from Project
costing form FEC1 and calculating the fEC cost.
Q: What is the Project
Costing Form (PCF)?
A: The PCF will supersede other forms. The current
form is called 'fEC1' (see above). This will be superseded in Februrary
2006 by InfoEd. From then, the form will be generated electronically
by fEC Project Costing Software which the University is purchasing
from InfoEd. It will perform most of the calculations for you, including
retrieval of salary information and the calculation of the estates
and indirect costs. It will also (In time, it will interface with
the J-ES Joint electronic submission system, thus avoiding double-keying)
generate pricings for major sponsors. The system will be web-based,
so it will be available from any networked computer.
Q: Things
keep changing. Why?
A: The introduction of fEC is forcing the involvement
of stakeholders in the HE sector. Some are better prepared than
others. The Research Councils have embraced fEC and are amongst
the best prepared, yet they delayed finalising the design of
their application form until June 2005.
Other sponsors are still deliberating on their response, and it would
be realistic to expect this to take years.
Also, the application of fEC to Teaching has not yet been discussed
(See next Q).
Q: Does
fEC apply to Teaching?
A: Not yet. The use of fEC in Teaching is no mere
rumour and is certain to come. This is likely to require further changes
to TRAC/ fEC methodology.
Q: Will all
academics have to complete timesheets?
A: No. There will be no more time recording than
at present. At present, most academic staff are asked to complete
a Time Allocation Schedule as part of the TRAC data collection exercise.
This will continue. Researchers on EU projects are required to keep
timesheets. And sponsor “dip-stick” visits will require
the basic everyday evidence of activity such as desk diaries, electronic
organisers, and laboratory notebooks.
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