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New TRAC guidance that applies from 2014-15 has now been published. This is hosted on the HEFCE web site on behalf of all funders. The current TRAC requirements continue to apply for TRAC reporting for the year ending 31 July 2014, but once the 2013-14 TRAC reporting is complete, the HEFCE web site will become the sole resource for TRAC as well as financial sustainability materials.

Transparent Approach to Costing (TRAC) Guidance:


The Transparent Approach to Costing, TRAC, grew out of the Transparency Review of Higher Education funding of 1998-99. It employs the principles of activity based costing, but applies them in a way that is appropriate to the complex activities and culture of a higher education institution. The processes underlying TRAC allow all of the costs of the institution, direct and indirect, to be analysed and attached to activities in a fair and reasonable way. The approach is flexible as it respects the diversity of institutions in the UK and it is both comprehensive and holistic, being appropriate for all activities and all institutions. At its core, TRAC has a firm set of principles and processes, yet it allows discretion in the way that these are implemented so that the outcome for any particular institution can be appropriate, proportionate and yet robust and consistent with the whole of the sector.

This manual of guidance brings together and consolidates the guidance and definitions previously set out in the original TRAC manuals published in 2000 to 2004: TRAC vol I (Overview and Implementation); vol II (Reference Manual); vol III (Full Economic Costs of Projects); and all subsequent up-dates. It is intended as a comprehensive technical manual to support accounting operations, the development of accounting systems, and also training.

Costing is not an end in itself, but it is a key enabling tool for management in the higher education sector. It has four principal objectives:

  1. to meet the requirement for accountability, particularly for the use of public funds, when the institutional portfolio includes a complex mix of activities;
  2. to provide consistent and robust information about the cost of activities to assist institutional planning and management;
  3. to provide a basis for the pricing of activities, particularly those that are publicly funded;
  4. to provide at both institutional and national level an appropriate and comprehensive cost model to guide investment for the future.

TRAC has been designed to meet these disparate requirements through a common costing and data platform and common processes and systems in so far as this is possible.

In the planning and development of TRAC, the Joint Costing and Pricing Steering Group has ensured close liaison and dialogue with the higher education sector, piloting and up-dating where required. It is widely regarded as fit for purpose and effective. It has received endorsement by Government including by H. M. Treasury as an appropriate solution to higher education costing problems.

It has now reached a stable state, which has been accepted by the HE sector, by government, and by the principal funders of research and teaching. The methods and guidance represent the current best practice in costing higher education activities.

TRAC itself cannot be set in stone; it will continue to evolve as the higher education sector itself evolves.

Professor David Westbury OBE

Chair, Joint Costing and Pricing Steering Group

June 2005

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