fec: The UK s Full Cost Model How does it work in practice?
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1 Profesjonalisering av forskningsadministrasjon Budsjettering og regnskap fec: The UK s Full Cost Model How does it work in practice? Dr Antony Weir ARMA Deputy Director and Head of Research & Legal Services, Heriot-Watt University The Professional Association of Research
2 UK University Research Funding Funding Arising from Government Science and Research Policy Funding Arising from Government Higher Education Policy Universities Other Research Funding (charities, EC, international, business, donations, other Government policy areas, etc.) The Professional Association of Research
3 Dual Support System Government (BIS) Research Councils Science & Research are the responsibility of a single UK Government Department: Business, Innovation & Skills (BIS) which funds Research Councils (RCs) Research Council funding is allocated competitively to specific research projects Grants range from 1,000s to 1Ms but a typical engineering research grant might be k Universities Funding Councils (QR) Governments (BIS, devolved administrations) Annual large grants (QR) are given out by Government Higher Education Funding Bodies (HEFCs) Funding is to support rresearch strategy, capability, infrastructure, staff & PGRs Distributed according to research quality as measured by research assessment (RAE now REF) Total grants range from 100,000s - 100Ms The Professional Association of Research
4 Dual Support Reform Under-investment in University Research Infrastructure reports Cross-cutting review of science and research Comprehensive Spending Reviews (CSR) Transparency Review (followed CSR 98) Science and Innovation Strategy Sustainability of University Research consultation all accept that university research underfunded (or universities overtrading in research) The Professional Association of Research
5 TRAC & fec TRAC: TRansparent Approach to Costing An approach to all University activity Divided Teaching Research Other fec = the research costing model Full Economic Costing The Professional Association of Research
6 The TRAC & fec Bargain Governments would fund research project based on their true cost (now at 80% of fec for funders in the Science budget) provide additional money for research encourage other funders to pay 100 % of fec. Universities must shape up their accounting systems to fully understand and identify all costs meet full costs of all research infrastructure report on financial performance (Annual Transparency Review return) cost all research (whether government funded or not) using fec achieve financial sustainability The Professional Association of Research
7 fec: Project cost elements Directly Incurred (DI) (new) staff, dedicated technicians, consumables, travel, equipment purchase, Research Facilities Charged on the basis of actual spend Directly Allocated (DA) Academic time based on estimated effort on project Estates pooled technicians, pooled equipment (expressed as /FTE) Charged on the basis of estimated costs Indirect Expressed as /FTE The Professional Association of Research
8 fec: Exceptions Funded at > 80% fec Large equipment items were provided at 100% Research student fees and stipend were funded at 100% Not funded Research student supervision (that s teaching) Inflation (but is part of fec of research) Use of central computing services General equipment, stationery, telephone and post etc (used by multiple projects) Patenting The Professional Association of Research 8
9 Birmingham, 16 February 2011 The Professional Association of Research 9
10 Costing Systems Siriusweb pfact In-house systems Ideate InfoEd (research administrators) Heriot-Watt uses an in-house Excel spreadsheet The Professional Association of Research
11 Birmingham, 16 February 2011 The Professional Association of Research 11
12 The Professional Association of Research
13 Some things don t change What resources does the project require Proposals in different currencies VAT Funders regulations Give the research support enough tome to prepare the budget The Professional Association of Research
14 Questions Who does the (full economic) Costing? Can you separate resources from experimental design fec introduction gave UK RMAs more control over proposal submission Close association with costing reinforced the association between RMAs and process / administration The Professional Association of Research
15 Questions Academic and researchers expectations Who owns the overhead Extra payments to academics in an fec budget? Academic time How much time do they really spend on a research project claim as much as reasonable... but not too much How much time do they actually spend on research altogether (compared to teaching) They might even have to fill out... Timesheets! The headline fec rate is may not be the same as recovery Worried funders would never pay it they did The Professional Association of Research
16 Questions Costing and pricing? Restricted Flexibility Research Councils 80% fec: no flexibility EC fixed costing model about 65% recovery of fec Competitive tenders constrained by the market Knowing the fec vs. charging the fec: Always charge fec, always charge 80% make it up every time Factors which should increase the price compared to fec Restricted IP &/or publishing arrangements Distance to research strategy Uniqueness of research expertise Inconvenience Importance / urgency for the funder What can you get away with asking? The Professional Association of Research
17 Questions Has it made us sustainable? Knowledge of projects costs quite accurate Projects managed on fec basis Thinking is still about recovery of directly allocated costs and indirect costs How is the rest of the research environment managed? The Professional Association of Research
18 Questions What about non-fec research funders? Charities Paying for university infrastructure is not their problem EC Usually flat rate overhead model Horizon 2020 be careful what you wish for Industry 100% fec is not the speed of light (you can go faster) Other Government Departments Unequivocally told to accept fec Not told to select proposals charged at 100% The Professional Association of Research
19 Questions What about non-research projects? Calculations of indirect and estates rates based on research activity How to charge: Consultancy CPD for industry Other projects from research funders EC Erasmus The Professional Association of Research
20 Recent Developments Wakeham Report What are you indirect rates? Penalise institutions with the highest Do you really need that equipment? Can you borrow your neighbours? If we allow you to buy it, will you share it with your neighbours? Can you rent it out to recover some of the costs Introduces a parallel equipment proposal process The Professional Association of Research
21 Summary Full Economic Costs consist of Directly incurred (additional costs): staff, travel & subsistence, equipment, consumables, etc. Directly allocated (existing resources assigned to the project): staff, physical infrastructure, etc. Indirect costs Estates & indirect calculation based on staff FTE Introduction in the UK gave RMAs more power but may have restricted perception of role Gave UK Universities a powerful tool to manage research Still raises questions in its implementation Is still being modified The Professional Association of Research
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