Budget - Management Planning and Reporting

FEC Manager: Thomas Vaughan

Background

There has long been a need within the university sector to develop a financial model that would establish the true cost of the key university activities of teaching and research and other activities.  This has become more urgent due to the following factors:

• Challenging financial climate
• Pressure on core university grant
• Government commitment to research in the third level sector
• Recent Rapid increase in research funding

From January 2010 the EC require that new research applications submitted will include an overhead rate that is robust and can be justified. It is anticipated that the current interim rate will be withdrawn.

In 2008 it was decided to design a full economic cost (FEC) model suitable for implementation  across the University sector. This is being funded under SIF.

This model will provide an awareness and understanding of the true cost of activities as a prerequisite for sustainable management of the university. It will also provide evidence of the true cost of research thereby allowing the university to calculate the real cost of research from agencies.

Output from Model
The output from this financial model will make transparent the true cost of teaching a student and the full cost of research.

What is Full Economic Costing?
The full economic costs of Teaching, Research and Other activities include:
Direct costs (staff, equipment, travel, consumables etc.)
Indirect costs (space, energy, central services, depreciation, maintenance, etc.)

Benefits to the University
Full costs of various activities identified
Justify case for increased funding for Teaching and Research
Realistic research overheads

Benefits to Academics
Facilitate allocation of resources to Teaching and Research
Ensure research overheads are adequate to cover full costs of research
Highlight the diversity of responsibilities of academic staff across Teaching, Research and Other activities               

What is Involved?
Development of a comprehensive national costing system to include all elements of costs within the university sector: staff, space, equipment, maintenance, support, etc.

Step 1: Identify and quantify central costs e.g. space, energy, administrative support, consumables, equipment etc.

Step 2: Identify academic staff costs for each of the activities Teaching, Research and Other Activities. These will be captured on an Academic Activity Profiling Form under Finance Forms on right hand side of this screen.

This form will capture academic effort based on a percentage basis not on a time or hours basis. It will allow academics to state the percentage of their time spent on the following nine activities:

The form will be completed annually.

The form is available on the web under the Quicklinks Finance Forms and it is expected that all academics will complete the form.

Assistance on completing the form will be provided by way of explanatory notes and further queries can be directed to Valerie Moore, Manager FEC project.

What happens to the Data?

As quality assurance is critical to justification for increased funding a reasonableness check on the results will be undertaken by Head of Department. The collated data will be anonymous above departmental level.

The data will aggregated at departmental level to provide a profile for the department costs directed to Teaching, Research and Other Activities. This profile will be used subsequently to drive other departmental costs to Teaching, Research and Other activities.

Use of Data

The University will undertake that the FEC data as collected will be used for the specified purpose only of input into the FEC model.

The Ancillary Services staff are responsible for monitoring income and expenditure relating to self-funded projects, including Strategic Innovation Fund (SIF) projects, preparation of financial reports, preparation of reports for audit and opening new Self Funded Project accounts.

Ancillary Services Forms