Part IV - Charge-out rates

Section C: Full-time equivalents

Chapter C.2 Use in setting rates

1. FTEs are used in the calculation of the indirect cost rate and estates charges for Research, and in the application of these rates. The same definition should be used both for the calculation and the application. Therefore, the FTEs used in the denominator of the rate calculations should be the same as those which potentially can be charged to research projects, on which indirect costs/estates costs can be charged and then (potentially) recovered from research project sponsors.
2. The definition of the relevant FTEs for use in setting rates for Research is:

   the full-time equivalent of the time of all academics working directly on Research (including external projects, institution-/own-funded research activity and the supervision of research students). This is the same time that would be chargeable to a research project (or equivalent, for institution-/own-funded research and PGR supervision);

   the supervision of research students (PGRs) and institution-/own-funded time should be included alongside time chargeable to research projects. They are direct research activities considered in TRAC to generate or potentially generate income;

   the full-time equivalent of research staff (research assistants, fellows) whose time is being charged to research projects or who are carrying out institution-/own-funded research or supervising research students;

   the full-time equivalent number of PGRs, weighted;

   and all these figures should be for the same year that is providing the costs (included in the numerator of the indirect cost rate and estates charge calculations).

3. Some staff are not on academic or research grades but may be charged as a researcher on a research project. Definitions are given in Annex 6. Their Research time should be included in the Research FTE total.
4. Support staff (e.g. technicians and clerical staff) should not be included in the FTE numbers.
5. FTEs for academic staff should be derived from the annual TRAC process. Academic staff time will have been allocated to Teaching, Research, Other and Support based on the results of the annual TRAC academic time allocation exercise. That element of their time that has been allocated to Research should be included in the FTE figure for Research. Support time for Research, or general Support time, should not be included in the FTE figure for Research.
6. In general, research staff FTEs are not included in the annual academic time allocation exercise: their time is wholly chargeable to Research (it is wholly included on a research project, even when it includes some Teaching or Support time). For these staff, all of their time should therefore be included in the FTE count.
7. RAs may be ‘between projects’, or otherwise not employed on a specific research contract for the year being studied. They might mainly be undertaking institution-/own-funded Research. If so, 100% of their time should be included in the FTE count. Otherwise their time should not be included in the FTE count – see support staff.
8. In practice, a default assumption could apply, that RAs have been engaged wholly or significantly on Research (in line with duties of other RAs engaged on research projects). A note could be sent to relevant heads of department each year asking them to indicate where this was not the case.
9. FTEs for academic and research staff should be calculated by:

   obtaining an average FTE for academics and research staff for the year for each department (which would include time spent on all activities – Teaching, Research, Other and Support);

   assigning to Research all of the time of research assistants and research fellows whose time has been charged 100% to a research project;

   calculating the proportion of time that academics spend on Research, by:

   *   taking the % of time that academic FTEs have spent on Research, from the TRAC time allocation schedules;

   *   applying this Research % to the average FTE number for these academic staff;

   then adding these two figures (RAs and fellows, and Research time of academic staff)

   to provide the FTE staff numbers for Research.

10. This FTE staff number for Research should not include the time spent on Support for Research or general institutional support, scholarship, etc.
11. It should include the Research time of any staff deemed to be researchers on a research project.
12. A robust method should be used to establish staff FTEs e.g. pay or personnel records on numbers of staff, by department, at the beginning of a month. If this cannot provide data on all researchers, other methods that provide fair and reasonable figures can be used, e.g.
    • the research project or costing records which provide salary costs for RAs, could be divided by an annual cost per RA to provide an estimated RA FTE;
    • costs of visiting academics and other non-permanent staff could be divided by an annual cost per academic to provide an estimated FTE. However, the FTEs of visiting researchers should only be included where their institutions do not make a charge to the lead institution for indirect and estates costs that are then charged to the project.
13. Staff FTEs should be established in a robust way no later than 1 August 2007 (and used to allocate 2006/07 costs).
14. The FTE numbers on pay or personnel records may need review and adjustment. Institutions should consider the further analysis that is necessary to ensure full robustness. Depending on the coding and structure of the current system, this might include, for example:
    • identification and clarification of the treatment of employees who are on temporary contracts, on fees basis and casuals (who may or may not generally be included in the cost drivers). Whilst doing this, clarification of the use of the term ‘temporary’ may be required;
    • identification and allocation of employees on maternity, paternity and long-term sickness leave – see Annex 9;
    • identification and appropriate treatment of other staff who work on institutional projects but are not paid through the institution’s books (e.g. some visiting academics or visiting fellows);
    • reviewing staff classifications, such as academic, RA, technician and other (existing use of the term ‘researcher’ or other types of staff may need to be reviewed);
    • sorting employees by department (perhaps requiring a re-alignment with the department accounts code for where the salaries are charged, as opposed to the department where the staff member was originally employed).
15. These adjustments might be identified though a critical review of an employee list by each head of department. They need be made only if they are likely to lead to a material change in the FTE numbers calculated for attributing:
    • to Research (or Teaching, or Other); or
    • to each research sponsor group; or
    • between laboratory and non-laboratory departments.
16. However, if the institution wishes to calculate estates charges and indirect cost rates at lower levels than this, materiality requirements will alter. If estates charges or indirect cost rates are calculated at the level of individual department, or by type of staff, then data should be robust at these levels. (It is not, however, a minimum TRAC requirement to calculate charges or rates at these lower levels.)
17. To be robust:
    • the pay or personnel records should be sampled on at least two points during each year, chosen to ensure that the average is a fair and reasonable summary of average staff numbers over the year. (If the average is based on data at the beginning and end of each year, then the institution should confirm that the patterns of employment over the rest of the year are materially similar);
    • if not available through the pay or personnel records, research staff FTE numbers should be established through a robust method such as a survey of academic heads of department or a robust examination of research project records;
    • the FTE figures used to calculate the charge-out rates should be reconciled to the average employee statistics which are included in institutions’ audited financial statements;
    • calculations of the average FTEs for visiting researchers, lecturers and other non-permanent staff, if not available on the pay or personnel records, should be reviewed by appropriate academic managers for reasonableness; and the attribution of these FTEs to Teaching, Research or Other should be confirmed by them;
    • the institution should take an informed view on whether non-laboratory work in laboratory departments is broadly equal to laboratory work in non-laboratory departments;
    • if not, then heads of department should identify desk-based work in laboratory departments and vice versa:
      • those in laboratory departments should estimate how many research projects (perhaps expressed as a percentage of total research work in their department) do not use any laboratory facilities (e.g. a desk-based project in a laboratory department);
      • heads of non-laboratory departments should estimate the proportion of research activity that is reliant on laboratory or other major facilities to the same extent that a normal project in a laboratory department would be;
    • heads of all departments should also identify the proportion of research activity that is carried out completely outside the institution; and the FTEs of staff from partner and other organisations who are using institutional facilities (where these are not being directly charged). Staff working permanently off-campus should be excluded from the estates rate calculation, but left in the indirect cost rate calculation;
    • the treatment of the following should be carefully reviewed, where material:
      • the FTE of fellows, emeritus professors, visiting staff from industry, and temporary lecturers (for Teaching) should be included;
      • the Research FTE of clinical academics should be included irrespective of whether their salaries are wholly or partly reimbursed;
      • where clinicians’ salaries are not paid by/through the university, either the time that they spend on Research should be included, or the O(CS)(R) time of the university’s clinical academics (but not both).

    Materiality should be considered for these complex areas.

18. Institutions can use other methods if they consider these to be as robust.
19. Indirect cost rates and estates charges for Research apply to PGR student FTEs as well as to researchers. PGR students should be included in the FTE numbers. PGR FTEs could be obtained from the student numbers report prepared from Registry data in December each year.
20. Weightings are to be applied to PGR FTE numbers. Weightings reflect the fact that some of the Support activities or resources allocated to Research may be providing a higher level of support to an academic or research member of staff than to a PGR student – e.g. academics‘ time on scholarly activities, office space, or departments’ Support staff.
21. When charge-out rates are calculated and applied to PGR FTEs the following weightings should be applied:

    indirect	0.2
    laboratory estates	0.8
    non-laboratory estates	0.5
    compared to that applied to the FTE of academic/research staff of	1.0

22. A UK review of these weightings is being carried out in 2006 which will draw upon better evidence from institutions. The JCPSG considers it likely that this evidence will indicate the need for higher weightings.
23. Part-time PGRs should be included proportionally to these weightings. PGRs on ‘writing up’ only registrations should not be included.
24. FTEs should be converted from/to days or hours using the standard working hours assumption – 1650 hours a year.
25. FTE numbers are established for one year (e.g. 2004/05) for use in the allocation of costs, and the calculation of indirect cost rates and estates charges based on that same year’s (e.g. 2004/05) costs. These rates and charges, indexed, are then applied to projects for the following year (e.g. from 1 February 2006). This calculation would not then be repeated using the same year’s data (2004/05 in the example above: it would next be carried out on 2005/06 data for application from February 2007).
    

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