1. Practical issues of fEC John Newton National Co-ordinator for Costing and Pricing, JCPSG

2. Background Government expectations/commitment JCPSG, TRAC and its strategy Additional support for Research Councils Cost-based pricing based on TRAC Market-based pricing Sustainability

3. fEC Full economic costs based on TRAC – definitions of activities, data, validation, testing, internal audit Definition of fEC Cost models and rates vary between institutions QA process – Cardiff has robust processes now but…. Rates calculated for Estates and Indirect costs – generic and lab-based departments Breakdown of costs: Directly Incurred (DI) Directly Allocated (DA) Indirect Exceptions

4. Directly Incurred (DI) costs DI costs are: explicitly identifiable as arising from the conduct of the research; are charged on the basis of the cash spent; and are verifiable and auditable from accounting records Types include: Staff specific to a project – underpinned by an auditable record (e.g. Technicians, RAs, consumables, travel, equipment) Facility usage –if usage/project and auditable costs charged on the basis

5. Directly Incurred (DI) costs Issues Names of staff RAs and RFs wholly working on the project and all salary costs charged to the project treated differently to those working on a variety of projects Hours in total over project Cannot use pay bandings. Use actuals. Use of equipment funded by Research Councils/double Counting How are estimates derived? Note later justification for audit. Recording of costs as expenditure made Indexation

6. Directly Allocated (DA) costs DA costs are: shared costs based on estimates; and do not represent actual costs on a project-by-project basis Types include: Departmental technical and administrative service staff Costs to projects, based on a charge-out rate related to estimated costs

7. Directly Allocated (DA) costs Issues PIs/Co-investigators – change from current procedure Costs of staff that work on several projects are generally directly allocated Names Hours (based on estimates – no timesheets) Charged on the basis of standard charge-out rates and estimated time Lab technicians to be directly allocated by 1 August 2007 Research Councils will not fund PIs more than 1650 hours/year – 100% of salary Costs of major research facilities to be directly allocated by 1 August 2007 Reconciliation between actual and estimated hours Agreed estimated costs paid – no more, no less Pay bandings – TRAC Peer reviewers see all costs but not basis Estates – FTE based on research staff on project or sq m Indexation

8. Estimating academic staff time/project (1) General Pay bandings/actual salary costs 1650 hours Hours conversion to FTEs Confirmation of time estimates annually or as required Do not include time spent training or supervising project or tied studentships on project but record separately. Determine total hours for project

9. Estimating academic staff time/project (2) Points to consider Whether PI or Co-investigator How many on project Experience of RAs General experience/aptitude No. of partners Type of equipment No. of papers o be written Sponsor requirements Can include writing up time Do not include dissemination Methods Zero-based TRAC data Time/RA – weighting as appropriate Standards of department Experience of older researchers Peer discussion -

10. Indirect costs Cost driver model Consists of: - the Support time of academics - clerical and administrative staff in - academic departments (exc. DI/DA costs) - non-staff costs in academic departments - central services - estates costs of central service departments - COCE FTE calculation – TRAC Time Allocation Schedules/PGR weightings The total indirect costs for Research/total FTES for Research provides the indirect cost rate/FTE for Research Annual calculation, using historical data

11. Exceptions Include: 100% fEC of equipment over K£50 threshold (total) 100% of project studentship stipends and tuition fees (where applicable to project). Do not include as part of FTEs Note indexation

12. General Charge-out rates to be determined by Finance but in liaison with all other relevant staff Costs used to establish the indirect cost, estates cost and all other charge-out rates are reconciled to the financial statements plus the two cost adjustments Rates can be revised for cost purposes but additional costs will not be paid No double-charging Terms and conditions for Research Council grants published in March 2005 - see http://www.pparc.ac.uk/jes/TCfECFinal.pdf Peer Review and fEC. See http://www.pparc.ac.uk/jes/DSR_PeerReviewFAQv1.0.pdf