The UK funding Councils and Research Councils set up a process to provide
assurance to sponsors that higher education institutions had successfully
implemented the Transparent approach to costing (TRAC), and that there was
a solid foundation for extending the TRAC methodology for forecasting full
economic costs at project level. 
HEFCE
circular letter 05/2004 provided further information about the process.
Key findings from the interim report by the QA Team were provided in
HEFCE circular letter 20/2004, dated 8 November 2004.
The TRAC default cost rates for 2005-06 have been announced. These rates
are to be used when applying to the Research Councils for grants for research
projects on a full economic cost basis (fEC) from September 2005. For further
information on this and other quality assurance issues, see the Funding Council
websites:
HEFCE
SHEFC
HEFCW
The final report on the quality assurance of implementation of TRAC by HEIs
was published in August 2005. A summary of the findings was provided in
HEFCE
circular letter 24/2005 . The
full
report is available for download from the HEFCE web-site.
The UK funding councils, Research Councils and Office of Science and Technology (OST) are developing a strategy and arrangements for quality assurance and validation of TRAC and TRAC fEC. The aim is that their recommendations should meet the needs of all stakeholders and provide an acceptable level of assurance to research sponsors that research projects are being costed robustly, taking account of the new research funding arrangements.
The funding councils and Research Councils have asked the KPMG QA team to provide transitional QA arrangements to cover the period from August 2005 until the new QA arrangements are implemented, and to co-ordinate benchmarking to inform re-setting the default cost rates in February 2006. The KPMG QA team has written to HEIs' Directors of Finance about these arrangements.
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