Annual TRAC involves an annual retrospective allocation and reporting of costs and income across the five categories of Teaching (publicly and non-publicly funded), Research (publicly and non-publicly funded) and Other Activities. The main features are detailed in the following sections.
Academic Staff Time Allocation
Since academic staff costs represent such a large element of the University's total costs it is a fundamental requirement that they are allocated to Teaching, Research and Other Activities using a robust methodology.
All academic staff are therefore required to complete a return referred to as a Time Allocation Schedule (TAS), outlining the percentage of their working time spent on identified activities over a defined period of time.
The Schedules are divided into the main activities of Teaching, Research, Other Activities and General Support. Support specific to Teaching, Research and Other Activities is also separately categorised to inform the calculation of overhead recovery rates.
Time Allocation Survey
The collection of time allocation information at Queen's is changing and the University is moving to collecting three in-year schedules every year, instead of every three years as was previously the case.
The next collection is planned to commence in September 2013 and further details will be published here in due course.
Apportionment of Support Costs
An integral part of the costing process is the allocation and apportionment of all indirect support costs, relating to both activities within each academic area and central support activities.
Academic department support costs will be attributed to Teaching (publicly and non-publicly funded), Research (publicly and non-publicly funded) and Other Activities based on either academic staff apportionment or a separate analysis of the costs in question.
Central support costs will be apportioned firstly to direct activity areas e.g. schools or self-financing areas and subsequently to the five identified Transparency Review categories, using an appropriate activity based methodology.
The activity based methodology involves assigning the central costs to 'cost pools' and then apportioning the total cost of each pool using an appropriate 'cost driver'. Cost pools are groups of costs which behave in a broadly similar manner and cost drivers are a measure (or proxy) of the quantity of resources within each pool which are consumed by each direct activity.
The cost pools and cost drivers used to apportion the central support costs of the University are as follows:
|COST POOL||COST DRIVER|
|Administration||FTE staff numbers|
|Audio Visual Aids||FTE student and staff numbers|
|Computing Services||FTE student and staff numbers and computer workstations|
|General Overheads||Direct staff costs|
|Health Premises||Actual costs (allocated directly)|
|Library Services||FTE student and staff numbers and library days visited|
|Estates||Space (weighted square metres)|
|Research Office||Research Contract spend|
|Student Services||FTE student numbers|
|Student Services (Teaching)||Actual spend|
To reflect the true full economic cost of University activities, for both reporting to Treasury and to inform contract pricing, the costs outlined in the annual financial accounts need to be adjusted to account for the following two areas:
(i) Infrastructure Costs
Under the current Higher Education Statement of Recommended Practice (SORP) infrastructure costs are accounted for on an historic cost basis. Depreciation costs in the annual accounts do not therefore adequately cover the long term replacement cost of buildings. The depreciation costs will therefore need to be uplifted, based on the insurance value of buildings, using the methodology outlined in the Transparency Review Guidance Manual.
(ii) Return for Financing and Investment
This adjustment to costs is required to reflect the cost of financing the University's activities and to make a surplus for the development of our teaching and research capacities. The adjustment is similar to that accepted under the Government Activity Conventions (GAC) and is devised from average capital employed in accordance with the Transparency Review Guidance Manual.
Income is attributed to each of the five activity categories in TRAC, using common methods. This enables a surplus or deficit for each activity to be identified.
As some of the income attributed to publicly funded activity is actually provided from non-public sources (fee income is the main example of this), a separate analysis of publicly funded Teaching income and publicly funded Research income is also undertaken.
On an annual basis the following information is produced:
(i) The true full cost of each of the five Transparency Review activity categories reconciled to the final accounts expenditure after making cost adjustments.
(ii) These costs are then compared to income for each of the categories to arrive at a surplus or deficit position which is then reported to HEFCE.
(iii) The full cost of each school’s activity is provided for internal management purposes. The information will again be presented for Teaching, Research and Other Activities with Research costs further categorised by main sponsor type.