Tagged / fec

*New* Full Economic Cost thresholds for research and knowledge exchange (RKE) activity

EPSRC, ESRC, EU, Funding opportunities, Guidance, Industry collaboration, Knowledge Exchange, Knowledge Transfer, Knowledge Transfer Partnership, pre-award

A review of BU’s research and knowledge exchange activity demonstrated that over the past three years BU’s RKE income met c. 80% of the full economic costs (fEC) of the projects. The review also looked at the fEC thresholds and found they were out of date and unrealistic, for example, a number of the thresholds did not match the funding models provided by funders.

The Research Performance and Management Committee (RPMC) have therefore approved changes to the fEC thresholds for RKE activities at BU. The new thresholds have been chosen to make it easier to work with organisations on RKE projects that will benefit society. Moreover, the new thresholds set realistic expectations for working with a range of funders so that research activity is sustainable at BU.

In addition to the thresholds, the RPMC has confirmed an expectation that all new costs to the project (Directly Incurred costs) must be covered by the income to be received from the funder. Ideally the income will be sufficient to also provide a contribution to the other costs to the project (i.e. existing staff time and overheads). This will enable BU to ensure RKE activities are financially viable and sustainable.

The new thresholds set a minimum fEC recovery rate by funder/activity type (see Table 1). They should be discussed with your Funding Development Officer at the start of the bidding process and before any conversations take place with external organisations/partners. All Principal Investigators will be asked to design their projects around meeting or exceeding these minimum thresholds and making sure the Directly Incurred costs will be covered. This may not be possible for all funding schemes. Where there is a strategic reason for applying to such a scheme and there is no alternative funder (such as some prestigious fellowship schemes) then this should be discussed with your Funding Development Officer who will advise on options.

If you have any queries about what this will mean for your research, please contact Ehren Milner (emilner@bournemouth.ac.uk).

RCUK statement on Apprenticeship Levy

BU research, Funding opportunities, Guidance

RCUK have issued the following statement this week:

 

Any Research Organisation submitting an feC Proposal to the Research Councils can now recover the costs of the new Apprentice levy.

The Research Councils in informal consultation with the sector, have agreed that the cost of the Levy can be recovered by adding the levy charge through direct staff costs, for both Directly Allocated and Directly Incurred Staff. This should be added to any UK based salary at 0.5%. This would not apply to any staff based at overseas Organisations.

The levy charge can be included on all future applications submitted from this date, no amendments to applications or grants submitted or funded will be allowable, though the charge can be recovered through grant virement within the cash limits of the grant. Further details on how this can be entered into Je-S is attached here .

We will be working with TRAC Development Group (TDG) in the coming year in order to include the levy for indirect staff as part of the indirect cost and how the income can accounted for.

The RKEO Funding Development Team will be adding the 0.5% cost (where DA and DI staff are included) to all research council applications with immediate effect.

BU Guide to Full Economic Costing

BU research, Guidance

father tedLast year, RKEO revised and re-published the BU guide to full Economic Costing, know as fEC (which some people choose to pronounce in a ‘Father Jack’ style).  The full guide can be found on the BU intranet.

If you are applying for external funding for your research and knowledge exchange activities then you need to read the guide and understand what makes up the costs of a project.  The guide fully explains what fEC is, how it’s calculated, the difference between cost and price, estimating staff time, and explanation of the terminology, i.e. what is directly incurred, directly allocated, estates, indirect costs, and exceptional items.

For more information and assistance with costing your external research or knowledge exchange application, please contact your RKEO Funding Development Officer.

BU guide to full economic costing and other useful information

BU research

Research funding wordleIf you’re thinking of applying for external funding to carry out research or knowledge exchange activities then you may find these useful links (on the staff intranet) on BU processes of help:

These are all essential reading if you are thinking of applying for external funding.  Please contact your Funding Development Officer as soon as you know you want to apply for an opportunity.

An Introduction to Research Administration & Management

Awarded & submitted bids, BU research, Guidance, Post-award, R & KE Operations, Training

The Research & Knowledge Exchange Operations (RKE Ops) team will be hosting a lunchtime staff development session on ‘An Introduction to Research Administration and Management’ geared towards professional and support staff on the 11th July 2012 at 12.30pm.

The session will explore the basics around research administration and management, including an overview of full Economic Costing (fEC), the prominent research funders and general good practice in research project management.

Further details can be found below:

  • What? Introduction to Research Administration & Management
  • When? Wednesday 11th July, 12.30 to 13.30pm
  • Where? The Octagon, Library, Talbot Campus
  • Who? Professional and support staff interested in research administration.
  • How?  To book a place please click here

fEC step by step guide to costing! ~ Step 5 Exceptional costs

Guidance

This week is fEC week on the Blog! Each day we have been explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals. Today is the last in the series and the focus is on Exceptional costs.

See Friday’s blog post (Introduction to full economic costing) for an explanation of what fEC actually is and why we use it.

Step 5 – Exceptional costs

For Research Council applications in particular, certain costs will be classified as Exceptional and will be subject to a different funding arrangement to the rest of the costs on the project. These are:

  • Postgraduate student fees and stipends
  • Equipment costing in excess of £10k
  • Large survey fees

Research Councils will usually pay 100% of the fEC of these exceptional costs, with the exception of equipment costing in excess of £10k for which the Research Councils will pay approximately 50-100% of the fEC depending on the total cost of the equipment. For further information, see the RCUK statement on the Changes to Requests for Equipment from 1st May 2011.

Tuition fee and stipend levels for Research Council funded students can be found on the RCUK webpages.

This is the final installment of this week’s step by step guide to fEC. The other steps can be accessed here:

Step 1 – Directly Incurred costs

Step 2 – Estimating staff time

Step 3 – Directly Allocated costs

Step 4 – Estate and Indirect costs

fEC step by step guide to costing! ~ Step 4 Estate and Indirect costs

Guidance

This week is fEC week on the Blog! Each day we will be explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals. Today’s focus is on estate and indirect costs.

See Friday’s blog post (Introduction to full economic costing) for an explanation of what fEC actually is and why we use it to cost projects.

Step 4 – Estate and Indirect costs

There are some major items of expenditure in support of research activities made both by the School and centrally by the University. These costs are important as they ensure that the University has a well-maintained infrastructure and administrative support to enable research and enterprise activities to be carried out. Under fEC these are termed estate costs and indirect costs.

Estate and indirect cost charges replace the previous ‘overhead’ charge that was applied to research projects. Whereas the overhead was a fairly arbitrary charge, the estate and indirect costs are true costs that the University is incurring and are based on the expenditure contained within the audited annual accounts.

The calculation of estate and indirect costs is a mandatory requirement for all UK HEIs, and is done using the same methodology in each institution. The costs that are calculated will be different, but they will have been calculated in a standardised and consistent way.

Estate costs – these provide a share of the cost of providing the physical infrastructure for research, and are calculated by each HEI using its own cost rates.

Indirect costs – these are non-specific costs charged across all projects based on estimates that are not otherwise included as directly allocated costs. Examples of costs included in the indirect cost charge are:

  • academic support time not spent on teaching, research or other (as defined by TRAC)
  • clerical and technical staff costs
  • non-staff costs in academic departments
  • staff and non-staff costs in central service departments
  • gross cost of capital employed (i.e. restructuring and interest costs and the net COCE)

Estates and indirect costs are driven by the academic/research FTE allocated to the project and will be calculated by the CRE Operations team as part of the costing.

See tomorrow’s blog post on exceptional costs for the final exciting installment of fEC!

fEC step by step guide to costing! ~ Step 3 Directly Allocated costs

Guidance

This week is fEC week on the Blog! Each day we will be explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals. Today’s focus is on Directly Allocated costs.

See Friday’s blog post (Introduction to full economic costing) for an explanation of what fEC actually is and why we use it.

Step 3 – Directly Allocated (DA) costs

Directly allocated (DA) costs are the costs of resources on a project where the same resources are shared by other activities and projects. Directly allocated costs are different to directly incurred costs because the costs are not exclusively related to any one individual project.

DA costs are charged to the project based upon an estimate, rather than actual cash values.

Examples of DA costs include:

  • Principal Investigator (PI) and co-Investigator (Co-I) salary costs
  • Estates costs

Investigator salary costs – yesterdays fEC post explained how to estimate the time that the PI and Co-Is will need to spend on the project in terms of average hours per week. This will now need to be used to calculate the salary cost of each of the Investigators on the project.

You will need to know, for each Investigator, the average hours per week they will devote to the project and the CRE Operations team will then use BU’s costing software to apply these hours to the appropriate salary banding in order to calculate a project salary cost for each Investigator.

Please note that if you have an investigator who is going to be 100% funded from the project (such as Research Fellowships) then this cost should be included as directly incurred, as these staff will need to be charged as actual costs to the project. 

Estate costs – these are a directly allocated cost but will be included in tomorrow’s post as the process for calculating estates and indirect costs is the same.

See tomorrow’s blog post on indirect costs for the next exciting installment of fEC!

fEC step by step guide to costing! ~ Step 2 Estimating staff time

Guidance

This week is fEC week on the Blog! Each day we will be explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals. Today’s focus is on estimating staff time.

See Friday’s blog post (Introduction to full economic costing) for an explanation of what fEC actually is and why we use it to cost projects.

Step 2 – Estimating staff time

A key resource in the delivery of any project is academic staff time. All projects will have a Principal Investigator (PI) and some may also have Co-Investigators (Co-Is). PIs and Co-Is are the core academic staff who probably also spend time working on other research/enterprise projects as well as having other duties, including teaching and administration.

Academic staff are required to estimate how much time they think they will need to spend on a particular project. Below is a suggested approach as to how this could be done by taking into account three considerations: i) time available to do new research/enterprise, ii) project tasks, and iii) what to include and what to exclude. Considering these three things should help to produce an estimate of the average number of hours per week over the life of the project that could be spent on the project in question.

Academic staff will generally not have to keep detailed formal records to verify this, but will have to be able to:

  • justify this as a reasonable estimate of the effort required to deliver a particular project
  • produce some evidence of time spent on the project at the end of the project, e.g. lab notes, minutes of project meetings etc

Some funders (such as the EU) require more detailed documentation to justify the amount of time spent on a project; this can include keeping accurate timesheets showing time spent working on the project and the tasks that were undertaken. Where necessary, the CRE Operations team will advise as to the exact requirements. 

Time available to undertake new research – It is worth considering the amount of time already committed to teaching activities, management/administrative duties and other research/enterprise projects. 

Project tasks – The second consideration is the factors that are likely to affect how much time a particular project may require. Projects differ in terms of scale and complexity and have varying requirements for the amount of academic time needed. The following factors might be worth considering, but this is not an exhaustive list as each project will differ:

Research project tasks Factors likely to affect this
Establish methodology, approach, technique What is PI’s experience?How well understood is the area?
Assemble project team / plan / coordination of team meetings How many PI/COI?How many collaborating partners?

Frequency of meetings
Fieldwork, Laboratory, Studio What is PI’s experience?How well understood is the area?

How accessible is the location?

Recruitment of sample/research subjects
Report writing (initial, progress, final) How demanding is the funder?How many words is each report?
Conference attendance / dissemination activities How large scale is the planned activity?Where are the conference held?

What to include / exclude – Under fEC methodology, certain activities be included whilst others can’t.

Include:

  • Write-up time for reports and dissemination activities
  • Direct time required to manage the project, undertake the work and supervise any project staff

Exclude:

  • Bid preparation time
  • Postgraduate research student supervision (if applicable)
  • General administrative duties not directly related to the project 

Time estimate – The PI should now be in a position to confidently estimate the amount of time which will be spent by staff on the project.

You can use the BU estimating staff time spreadsheet as a rough guide to calculate time available to undertake new research and enterprise activity.

See tomorrow’s blog post on Directly Allocated (DA) costs for the next exciting installment of fEC!

fEC step by step guide to costing! ~ Step 1 Directly Incurred costs

Guidance

This week is fEC week on the Blog! Each day we will be explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals. Today’s focus is on Directly Incurred costs.

See Friday’s blog post (Introduction to full economic costing) for an explanation of what fEC actually is and why we use it to cost projects.

Step 1 – Directly incurred (DI) costs

Directly incurred (DI) costs are items or services which are incurred or purchased specifically for a project. Costs are charged to projects on actual cash value and are auditable in the financial accounts (e.g. supported by a supplier invoice). If the project didn’t go ahead then these costs would almost certainly not be incurred.

Care should be taken when identifying costs for inclusion as some costs, such as telephone, photocopying or stationery, will already be covered by the indirect cost charge. The CRE Operations team will be able to advise you on this.

You should consider whether the project requires the following DI costs:

  • Fixed-term project staff (research assistants, research fellows, dedicated technicians or administrators)
  • Travel, subsistence and conferences
  • Equipment and consumables (purchased specifically for project)
  • External consultancy fees

See tomorrow’s blog post on estimating staff time for the next exciting installment of fEC!

fEC week on the Blog! Introduction to full economic costing

Guidance

Next week is fEC week on the Blog! Each day we will be explaining a different element of fEC as a quick reference guide to help you prepare the budgets for your research proposals.

What is fEC? – Full Economic Costing (fEC) is a standardised method of calculating the actual costs of an activity which was developed in response to the funding councils’ ‘Transparent Approach to Costing (TRAC)’ methodology with the aim of increasing funding whilst making HEIs responsible for their own financial stability. TRAC data indicated that publicly-funded research in particular was significantly under-funded as the true costs of running the activity were not being adequately identifed or subsequently reimbursed. fEC was introduced for all UK HEIs in September 2005, with the first fEC grants being awarded from April 2006.

In essence, fEC is a national, standardised costing method that provides a forecast of the full cost of undertaking a research project.

How do I calculate the fEC? – All bids at BU must be costed in accordance with the principles of fEC by the CRE Operations team using BU’s costing software. Everything must be costed and cross-checked against the funding body’s guidelines. You must ensure all costs are included at this stage as funders will not make up a shortfall after money has been awarded, but ensure costings are realistic and offer good value for money as most funders require a full justification of the requested resources.

How do I price the work? – After completing your costing you will need to establish what funding is available, i.e. the price, and consider how this compares to the cost (fEC recovery). The majority of research funders have set guidelines stating how much of the Full Economic Cost (fEC) they will fund or whch elements of the costing they will fund. However, where the funder/client does not have guidelines on this then a decision needs to be made of how to price the work to be undertaken. Pricing should be considered carefully and discussions should take place after the fEC has been calculated. Pricing decisions should always be discussed with your Deputy Dean (Research & Enterprise ), Dean and/or Director of Operations prior to quoting a price to the client. Pricing for contract research and enterprise should be carefully considered to ensure that ‘pricing precedents’ are not established with a particular funder.

  • Research Councils and NHS 80%
  • Charities averaging around 50%
  • EU around 75%
  • Industry 100%

The rate for commercial work varies but BU aims to recover 110% fEC across the whole Research & Enterprise portfolio. Therefore surpluses must be achieved where possible (i.e. over 110% fEC) to cover the deficit made by research (typically 80% fEC and lower).

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