Part III - Annual TRAC

Section C: Staff costs

Chapter C.2 Academic & research staff costs

1. Staff costs should be attributed to activities on the basis of the time spent on each activity by each individual.
2. The main steps required in this are set out in the table below:

   design spreadsheet or database system collect costs for attribution record time collect and record other cost drivers attribute costs calculate totals and test for reasonableness report; review and amend methods as required reconcile Research Council costs

i. design spreadsheet or database system

3. A simple set of spreadsheets, or equivalent, can be used to record staff time and attribute staff costs. Key fields and functions would be to:

   record time and other data:

   • department;
   • staff number (indicating grade/salary banding – see Annex 9 for more);
   • each of the activity categories against which time is recorded (PF Teaching, NPF Teaching, the seven Research sponsor types, between Other (Clinical Services), and the rest of Other, Support (and types of Support if institutions wish));
   • FTE percentage of staff – see Annex 9;

   record costs from the financial accounts:

   • total staff costs;

   assist in the attribution of costs:

   • staff costs that have been charged to research projects as a directly incurred cost;
   • the names and costs of academics who are paid to only work on one activity (visiting lecturers etc.);
   • time collected from the annual time allocation process, weighted by staff FTEs – see Annex 9;
   • staff salaries to be applied to each individual’s time record;
   • other cost drivers.

ii. collect costs for attribution

4. These should be total staff costs reconciled to the financial statements – see Annex 9. They include some costs that are not derived from the payroll (e.g. visiting lecturers and visiting researchers).
5. They should be recorded at the level of individual members of staff.
6. The percentages of time allocated to activities should be weighted to recognise the different pay levels of individual staff. Either calculated average staff salaries for each academic/research staff grade or pay banding, or the actual salaries of each individual academic or research staff, can be used. They should include on-costs and allowances and aggregate to total staff costs, reconciled to the financial statements.

iii. record time

7. The time allocation schedules will provide reference number or name, percentages by activity, or hours, and, possibly, a FTE percentage.
8. If hours are recorded, percentages should be calculated. If staff time is being grouped before applied to costs, then the percentages of time should be weighted by FTEs – see Annex 9.

iv. collect and record other cost drivers

9. Cost drivers or proxies can be used to attribute time to lower levels of activity where necessary, for instance:
   • student numbers – for attribution between PF and NPF Teaching;
   • numbers of RAs and PGRs – for attribution to research sponsor type for laboratory departments;
   • head of department percentages – for attribution to research sponsor type for non-laboratory departments;
   • information about the volume and type of services provided to the HEI by the NHS under knock-for-knock – for attributing Other (Clinical Services).

v. attribute costs

10. Attributions would:
    • firstly, directly attribute staff costs where possible (e.g. Research Assistants to Research);
    • use the time allocation data, and salary, for each individual or group of individuals (weighted by FTEs) to attribute their costs to the categories of time collected;
    • attribute the costs of cover for maternity and sick leave so that the activity is assigned the costs of the person carrying out the work, or the costs of the individual who is on leave, but not both – see Annex 9;
    • use proxies to attribute time between PF and NPF Teaching, and by research sponsor type, and from O(CS) to T, R, O and S, as necessary;
    • use all other time – including for both academic and research staff – (or another cost driver) to attribute Support time to Teaching, Research and Other, as necessary.
11. This attribution should lead to academic staff costs being assigned to:
    • Teaching, Research, Other, and Support
    • a split of Teaching between PF and NPF
    • Research shown by research sponsor type
    • Other split between Other (Clinical Services) and the rest of Other.
    • department (and therefore discipline group).
12. The financial accounts will already hold cost data against individual research project accounts. This should be used when attributing costs that have been directly incurred (Research Assistants, Research Fellows, other staff who are wholly dedicated to a research project, or who have completed project-level timesheets).
13. Many directly allocated Research costs will, over time, be recorded against individual project records. However, the DA academic staff costs that have been directly allocated to a project under TRAC fEC should not be used to attribute staff costs in the annual TRAC process. That charge was made on an estimate. Only actual time, recorded through the time allocation method, should be used in attributions carried out for the annual TRAC process (and therefore the calculation of the indirect cost rate and estates charges).
14. Academics sometimes receive a payment (made through their institution’s accounts) in addition to their salary, for their work on a particular course or project. The attribution of costs to that activity (e.g. NPF T or R) should be based on the proportion of the total payments to that individual that represents the amount of their time spent on that activity. However, the attribution could alternatively be based on the additional payments, if this is unlikely to lead to a materially different allocation.
15. Similarly, any attribution to Other, for academic staff time spent on trading company activity should reflect the actual time (and costs) spent. Only actual time recorded through the time allocation method, should be used in allocations for the annual TRAC process.

vi. calculate totals and test for reasonableness

16. Totals (percentages and costs) should be derived for each:
    • type of staff (salary banding/grades)
    • department
    • activity
    • lower-level activity including research sponsor type
    • Support costs as distinct from other costs
    • sample size/response rates.
17. Figures should be tested for reasonableness. Techniques for doing this are described in Part II (internal review).
18. Academic staff costs attributed to Support form one of the elements of the total Support costs in an institution. Support costs are used to calculate the indirect cost and estates rates.

vii. report; review and amend methods as required

19. Time data is used to calculate the costs reported externally in the annual TRAC return. Time data is not disclosed separately in this return. It can, however, be useful in sector benchmarking exercises.
20. The institution’s own experience of implementing, the experience of the rest of the sector, together with the QA processes, are likely to continue to identify scope for improvement. This might require a change in method, or some modifications to the current methods.
21. It may include, for example:
    • considering requesting time by sub-category of Support (Support to T, Support to R, Support to O, General Support);
    • improving the reallocation of O(CS) to T, R, O, S.

viii. reconcile Research Council costs

22. At the beginning of year five (2008/09) of TRAC fEC implementation, most projects which started prior to early 2006 (when the Research Council funding methods changed) will have been completed. Therefore, academic staff costs will be charged during 2008/09 on almost all externally sponsored projects undertaken in that year.
23. From December 2009, and annually thereafter, institutions are able to, and should, compare the total academic staff costs attributed to the Research Council sponsor group via the annual TRAC time allocation exercise, with the total academic staff costs charged to Research Council projects under TRAC fEC in the accounting records.
24. It is good practice for this comparison to be made on academic staff time as well as costs, but only if institutions are able to calculate the total of academic staff time charged to research projects (by sponsor) in a year. This may have costly systems implications for some institutions, and is not a minimum TRAC requirement.
25. This should only be regarded as a broad comparator, as there are various reasons why the two totals will be different, for instance:
    • the use of two different costing methodologies – based on actual time in annual TRAC (but ignoring the total amount of time actually worked), compared to the standard working year assumed in TRAC fEC (based on an average likely working year, which will, in practice, vary by individual);
    • fluctuations in the average time estimated on live projects in any one year compared with the actual time recorded under the annual TRAC time allocation for that year of the projects’ lives;
    • the impact of the less significant changes in project staffing, e.g. where the RA leaves three months before project-end, and the PI takes on a greater part of the work than originally estimated;
    • the normal slippage in the final completion of a research project, taking into account publications;
    • the difficulty in estimating time where the research outputs, the emerging requirements from the research as it develops, and the quality of the staff are not fully known;
    • there may still be no time or (full) cost records being kept for every project that started before the beginning of 2006 and is still ‘live’;
    • the difficulty in separating out research time from research student supervision, especially when the student is an inseparable part of the research team and is not a project studentship;
    • time spent supervising project studentships is recorded as part of the ‘PGR’ total in the annual TRAC time allocation, but this may or may not be in the time charged to Research Council project cost records. (Even if this time is charged to a Research Council project, that will not mean it will be funded on that basis);
    • the time of staff from other institutions who are collaborating on a grant will appear on the lead institution’s project costing record but the staff themselves will not have participated in the lead institution’s TRAC time allocation survey;
    • knock-for-knock, where O(CS) time reallocated to Research for the annual TRAC time allocation may not be matched against time from clinicians recorded on the project cost records (other types of resources may be provided to the HEI as part of the arrangements);
    • use of salary bandings to calculate charge-out rates on projects;
    • actual increments and pay awards differing from those assumed in the charge-out rates and project indexing.
26. RAs work partly on Teaching and Support, but all of their time is being recorded as Research. However, as this treatment is the same for both TRAC project costing and for the annual TRAC time allocation exercise, there is no reconciling item here.
27. These differences will be inherent in the comparison of total costs of time charged against Research Council projects with the costs of time actually spent (available from the annual TRAC time allocation exercise). Despite this, the comparison should provide confirmation (or otherwise), at the level of the institution as a whole, taking one year with another, that the Research Councils are not being charged more than the salary costs that the HEI is incurring on those projects.