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
- Costs charged to a project can be categorised as directly
allocated or indirect.
- 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
- 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
- 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
Directly allocated costs
- 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).
- 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 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.
- 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
- By charging items as a direct cost, and not leaving them in indirect costs,
- 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.
- Costs should appear on only one of the three categories
(DI, DA or indirect) – there should not be any double
- All three categories may include laboratory technicians and equipment
costs, but they will each relate to a different type of these costs.
This page last updated
© HEFCE 2005 The copyright for this publication is held by the Higher Education
Funding Council for England (HEFCE). The material may be copied or
reproduced provided that the source is acknowledged and the material,
wholly or in part, is not used for commercial gain. Use of the material
for commercial gain requires the prior written permission of HEFCE.