Part V - TRAC fEC

Section F: Post-award

Recording costs

1. The costs incurred on each project should be recorded.
2. DI costs should be recorded as the actual expenditure is incurred. This is the case even when the actual costs exceed the original DI level (and might therefore be ineligible for funding). However, costs recorded in the DI category should be DI costs. In particular, the recording of maternity, paternity and paid sick leave depends on their classification:
   • for RAs and staff in the directly incurred category of cost, they are DI costs. Sponsors generally allow virement within DI costs, and will often consider funding them even if it means that the original DI estimate is exceeded;
   • for academics, they are indirect costs. Investigators are classified as a DA cost, and charge-out rates are applied. These are based on the direct salaries (and on-costs) of staff, and incorporate assumptions about the working year and the time spent on direct Research activity. These do not include payments or time for any maternity, paternity or sick leave. The costs of these have been built into the indirect cost rates (part of the Support time and cost). Therefore, if incurred for a PI on a particular project, those costs should be allocated to Support in the annual TRAC process and should not be recorded as a direct project cost in TRAC fEC.
3. DA and indirect costs can be recorded on original estimate. This provides a relatively simple method of recording the fEC of each project each year.
4. Changes to indirect cost rates, or charge-out rates, or the level of resources being charged as DA costs, need not be recorded against the project cost record.
5. If institutions wish, they can amend their DA and indirect cost charges to reflect more up-to-date rates, or indices, or perhaps actual estates utilisation, for example. However, any recorded increase in DA and indirect costs (from the original indexed estimates) will not lead to additional funding by most sponsors.
6. For example, changes in the Research Assistant staffing could theoretically lead to different levels of PI, estates and indirect costs. If two RAs are budgeted (i.e. estimated in the bid), one leaves early, and then two new appointments are made, funders such as the Research Councils would not recognise any differences in the PI, estates or indirect cost totals charged to the project from those originally estimated.
7. However, any decrease in DA and indirect costs recorded or reported against a project may lead to a lower funding, as public bodies have an obligation to ensure that their funds are being used for the purpose originally agreed.
8. Most fEC-based funders will only change their price where there is a substantial change to the programme of work (e.g. departure of a key member of staff early in the project; serious curtailment of the work; or significant change to the type of work being undertaken). Except in these instances, there is no requirement under TRAC to change DA or indirect cost estimates during the project life.
9. Where a project transfers to another institution, it is good practice for the recipient institution to recalculate the costs on the project. However, this would only be done if the difference is likely to be significant, and if the institution has systems that allow them to make this calculation efficiently. Changes to funding are not likely to follow – see for example Research Councils’ policies, given on their website, accessible from Annex 1.
10. Rolling programmes more than three years in length are generally subject to a mid-term scientific review, at which time they may be extended. In these cases, the costs estimates (and prices) should be reviewed at this time.
11. The estimates being recorded each year should be updated for the relevant price level. This can be based on the original phasing of estimates at project approval stage and the original indices.
12. Entries should be made in project cost records once the work has started. For DI costs this will be when they start to be incurred. For DA and indirect costs this could be when the DI costs start to be incurred, when the investigator starts work, or when the sponsor recognises these costs for funding. It may be easier for institutions to use the latter, so that their costing and invoicing/income receivable systems are compatible.
13. The Research Councils, for example, allow expenditure to be incurred prior to the start of the research, and subsequently charged to the grant, provided it does not precede the date of the award letter. Payments, however, take effect from the notified start date (shown on the starting certificate) or, if staff are being appointed, from the date when the first such staff start work.
14. The recording fields, and periods, should be those that are most useful to the institution for managing the projects, charging sponsors, recording debtors, and making reconciliations at year-end and project-end. Quarterly or monthly records may be appropriate; but records should be made on a regular basis.