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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.

Part V - TRAC fEC

Section D: Estimating other costs

  1. Costs charged to a project can be categorised as directly incurred, directly allocated or indirect.
  2. It is good practice to charge costs as direct where possible. Costs should be identified and charged as direct costs in TRAC fEC where administrative systems will efficiently and robustly support this.

Directly incurred costs

  1. Directly incurred (DI) costs are items or services incurred or purchased specifically for a project. As well as Research Assistants they include consumables, travel and subsistence, equipment purchase and dedicated technicians or other support staff.
  2. Costs are charged to projects on actual. These costs can be vired (i.e. budgets can be transferred between DI fund headings when accounting for spend to sponsors).

Directly allocated costs

  1. Directly allocated (DA) costs are costs of services on a project, where the services are shared by other activities and projects. Investigators’ time, laboratory technicians, major research facilities, and estates should be directly allocated. Charge-out rates for each of these items are generally applied to researcher FTEs to derive an estimated cost for each project (other methods can be used).
  2. Costs are charged to projects on a standard charge-out rate, based on estimated usage, and do not change during the project life. No record of actual usage by a project is required. These costs cannot be vired (i.e. budgets cannot generally be transferred between fund headings when accounting for spend to sponsors).

Indirect costs

  1. Indirect costs are not directly related to any one project or activity, but are a necessary part of the costs of undertaking an activity. These costs are attributed to projects through a proxy – £/FTE.
  2. Costs are charged to projects on a standard estimate made pre-award, and do not change during the project life. No record of actual costs at a project level is required during the project life. These costs cannot be vired.

Choosing between categories

  1. By charging items as a direct cost, and not leaving them in indirect costs, institutions may:
    • be able to derive higher levels of recovery from sponsors of projects who do not fund on a fEC-basis, such as charities;
    • have more scope for virement of costs during the project life;
    • be viewed as lower cost than their peers during benchmarking of estates and indirect cost rates;
    • avoid being above the upper quartile of indirect cost sector rates that brings with it potential penalties – see external quality assurance process.
  2. Costs should appear on only one of the three categories (DI, DA or indirect) – there should not be any double counting.
  3. All three categories may include laboratory technicians and equipment costs, but they will each relate to a different type of these costs.
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