Full Economic Costing

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• Full Economic Costing
• Presentation
• Professor Anita Maguire

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Full Economic Costing will provide the evidence
required to sustain and enhance funding for the
Universitys teaching and research activities in
accordance with our strategic planThe
engagement of staff with the roll out of the
costing model will ensure that we can objectively
support funding applications going
forward Dr Michael Murphy
President UCC
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Presidents Address July 2009

• Highlighted the importance of the initiative to
  UCC, especially in the current economic climate
• Identified the need to redress the lack of
  understanding on the scale, range and
  complexities of University activities
• Enable UCC to establish the full cost of
  teaching, research and other activities
• Highlight funding deficiencies and seek
  additional financial support for educational
  endeavors

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Context

• Financial climate - national focus on
• Accountability
• Value for money
• Transparency
• Competition for resources
• European FP7

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Dual Mission

• Mission of Universities
• Teaching
• Research
• Essential that resources are appropriately
• allocated to support both elements

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Rapid Expansion in Research

• Commitment to research (SSTI, PRTLI etc.)
• UCC 2000 2007
• Research income 26.1M 69.1M
• PhD Registrations 379 759
• PhD Graduations 81 136
• Research overhead support in Ireland is
  traditionally at very modest levels

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Academic Activities

• Extent and direction of cross-subsidisation?

Teaching
Research
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Academic Activities
Teaching
Research
Other
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What is Full Economic Costing?

• Teaching, Research and Other activities include
• Direct costs (staff, equipment, travel,
  consumables etc.)
• Indirect costs (space, energy, central services
  etc.)
• Total costs currently are not readily available

Direct Teaching
Direct Research
Direct Other
Indirect
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Precedent

• UK TRAC introduced in 2000
• Originally Research focused
• Broadened to include Teaching
• Added complexities
• Austria, Australia, Germany, Spain, Sweden,
  Netherlands etc.

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TRAC FP7

• December 2008 European Commission
• Formal recognition of TRAC as a sound framework
  for the costing of FP7 grants
• Highlights the strategic importance of European
  Universities moving to full cost accounting

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Higher Education AuthorityStrategic Plan 2008
2010Key Output

• Development of a full economic costing model
• in co-operation with the Irish Universities
• Association (IUA)
• To better consider the cost base
• To better inform policy on funding and
  investment

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Full Economic Costing National Initiative 2008 -
2010

• IUA led involving all seven universities
• Supported and prioritised through HEA Strategic
  Innovation Fund II
• Led locally by a Steering Committee and
  co-ordinated by a National Steering Group
• Significant progress on each of the seven
  sub-projects each led by one or two of the
  institutions
• Consistent national approach with flexibility at
  local level in terms of implementation

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Steering Committee

• Professor Anita Maguire (Chair)
• Mr Diarmuid Collins (Bursar)
• Mr Cormac Harrington (Head of Operations,
  Tyndall)
• Professor Michael Berndt (Head, Medicine
  Health)
• Professor David Cox (Head, CACSSS)
• Mr Cormac McSweeney (Acting Head of Mgt. Acc.)
• Full Economic Costing Manager Ms Clare Lehane

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Full Economic Costing Objectives

• Establish full costs of each of the key
  activities of
• Teaching, Research Other activities and their
  associated support costs
• Justify financial support, not only maintaining,
  but increasing funding in a competitive
  environment
• Justify substantially increased research
  overheads
• Ensure maximum financial benefit from FP7
• Provide relevant cost overview to external
  stakeholders

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Benefits to the University

• Full costs of various activities identified
• Justify case for increased funding
• Facilitate allocation of resources to Teaching
  and Research
• Realistic research overheads, thereby releasing
  scarce resources to other key activities
• FP7 opportunities
• Highlight the diversity of responsibilities of
  academic staff

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Benefits to Academics

• Facilitate allocation of resources to Teaching
  and Research
• Ensure research overheads are adequate to cover
  full costs of research
• Highlight the diversity of responsibilities of
  academic staff across Teaching, Research and
  Other activities

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What is Involved?

• Development of a comprehensive national costing
  system to include all elements of costs within
  the university sector staff, space, equipment,
  maintenance, support etc.
• Step 1 Most costs can be identified and
  quantified centrally e.g. space, energy,
  administrative support, consumables, equipment.
• Step 2 Academic staff costs for each of the
  activities (Teaching, Research and Other) will be
  captured on an Academic Activity Profiling Form

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Academic Activity Profile Form

• Percentage basis not hours
• Retrospective for 4 month period
• Nine Activities

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What happens to the Data?

• Reasonableness check undertaken by HOS/HOD
• Quality assurance critical to justification for
  increased funding
• Above School/Departmental level data will be used
  in aggregated form only
• Collated academic data on each of the activities
  will provide staff costs for inclusion in the
  overall costing model

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University College CorkUse of Data

• The University will undertake that the FEC
  data as collected will be used for its specified
  purpose only

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UCC Trial

• September December 2008 in March 2009
• Eight Departments/Schools spread across the four
  Colleges
• All Academic staff within the relevant
  Departments/Schools
• To evaluate the clarity and content of the
  Academic Activity Profile Form in terms of
  guidance, layout and suitability in advance of a
  full pilot

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UCC Trial Results Feedback

• Review of results and feedback
• Individual School/Department response rates of up
  to 67
• The AAP form well received in terms of structure,
  guidance and layout
• Specific feedback incorporated in documentation
  where applicable
• General feedback assimilated for project pilot

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National Pilot 2009

• All Academic Staff across the sector
• Retrospective capture of data
• Decision on frequency of subsequent collection
  will be made after the pilot has been completed
• The objective of the pilot is to obtain good
  baseline data

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UCC Pilot 2009

• Academic Activity Profiling Form
• Launched 14th July 2009 in UCC
• Capturing 1 January 30 April 2009
• Deadline 7th September 2009

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UCC Next Steps

• Review of Pilot September/October 2009
• Decision on frequency of subsequent collection
• Real data required for 2009-2010 academic year
• Semester 1 1 September 31 December 2009
• Aide Memoir personal tool

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Additional Information

• TRAC Information - www.hefce.ac.uk
• Strategic Plan 2008 2010 http//www.hea.ie
• Financially Sustainable Universities Towards
  Full Costing in European Universities www.eua.eb

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Practical Details

• UCC Website
• http//www.ucc.ie/en/financeoffice/fec/
• Email address FECHelpdesk_at_ucc.ie
• FEC manager Ms Clare Lehane

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