Part III - Annual TRAC

Section A: Overview

Background

1. The context in which annual TRAC was introduced is described in Part I.
2. TRAC aims to provide high-level aggregate information for Government. The principle is that the costs of activities to be reported for the TRAC requirement should be at as high a level as possible while meeting the requirement.
3. The focus was initially on publicly funded activity: Government was interested in understanding what cross-subsidy, if any, there was from public funds to non-publicly funded activity. The agenda is now broader than that – it is now about full cost recovery and long-term financial sustainability, and about all activities in aggregate.  

External accountability

4. Institutions are to report the total gross costs of institutional activity on Teaching, Research and Other activities, as calculated by a robust method and reconciled to consolidated financial statements. This is to be signed off by the head of institution as representing a fair and reasonable view of the actual costs.
5. To do this, institutions have to collect data about the costs of: Teaching (T), Research (R), Other activities (O), and Support (S). Support activities are carried out on behalf of the other three, and these costs are separately collected and then attributed to the other three. Support costs are not reported separately.
6. For public accountability, five cost figures need to be reported as follows:

   Teaching		Research		Other
   publicly funded	non-publicly funded	publicly funded	non-publicly funded

7. These total:

   costs in the financial statements

   plus

   cost adjustments: infrastructure cost of capital employed

8. Income figures are now to be reported alongside the costs.
9. The role of the head of institution here is important. He or she is the designated officer (under the Funding Councils’ financial memorandum) and so has the responsibility to satisfy himself or herself that the figures reported are fair and reasonable.