Part II - TRAC Principles

Section B: Principles and Conventions

Chapter B.1 Scope of TRAC

1. TRAC, the Transparent Approach to Costing, provides a single costing method for use by HEIs, for both internal and external purposes.

All activities

2. TRAC covers the costing of research, teaching, and all other activities of institutions.

Costs, not income

3. The TRAC approach covers costs, not income or funding. It does not attribute income or funds to activities nor require any reporting of bottom-line contributions or surplus/deficit positions. However, these are required for benchmarking, by the Funding Councils when reporting annual TRAC costs, and by institutions when costing (and pricing) research projects.
4. Such calculations are of use to institutions for their own purposes. At an institutional level they are a valuable tool in assessing the ‘fairness and reasonableness’ of the cost figures being derived and, at project level, provide important information on sustainability and cost recovery.
5. The HE Funding Councils require information on funding to be reported alongside costs. Annex 16 provides information on the Funding Councils’ requirements for income allocation. This requires income to be reported alongside costs for each of the five activities, plus a further analysis by source of funding, at an institution level.

Costs that can inform pricing

6. Costs are different from prices. The focus of TRAC is costing, not pricing. However, costs derived from TRAC can inform prices - see:
   • indirect cost rates and estates charges
   • the estimation of research project costs in TRAC fEC and
   • costing and pricing materials published by the JCPSG – see Annex 1.

Institutions’ wider costing strategies

7. Costs provided under TRAC can provide helpful information for internal processes such as resource allocation, and strategic planning.