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Costing principles (FEC)

All research projects at UCL are costed using Full Economic Costing (FEC). Find information and guidance on FEC categories and rates to help you adhere to FEC principles.

Overview


Full Economic Costing (FEC) is a government-directed standard costing methodology used across the UK Higher Education sector for the production of consistent and transparent research project costs. The underlying principle of FEC is to establish the true cost of research, and for this to inform the amount requested from funders (the price).   

In simple terms, FEC aims to capture all of the running costs of the research project, including consumables, travel costs, facility access, staff costs, estates, infrastructure costs, and any other day-to-day project costs.

Understanding the true cost of a research project is critical to securing the correct level of funding in support of a project’s research objectives. Whilst a certain level of estimation is expected for some costs (consumables, travel, etc.), other costs (e.g., staff, equipment) must be carefully costed to ensure sufficient funding is secured.  

All research projects at UCL are costed and approved using Worktribe. Worktribe uses budget templates to make capturing the cost of conducting research easier, helping to ensure that you are adhering to FEC principles.

Full Economic Cost (FEC) categories


Directly Incurred costs are project-specific (i.e., they arise as a direct consequence of the project taking place), actual, and must be auditable at project level (e.g., supported by supplier invoices).

Directly Allocated costs are not project-specific (i.e., they are incurred whether or not the project takes place), and are estimated at the project level e.g. investigator time, technician time (where not directly incurred), and estates costs.  

Indirect costs represent the costs of central and distributed services shared by other activities that are not project-specific e.g. Library services, Finance, Human Resources, and IT.

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Project Full-Time Equivalent (FTE)


The full-time equivalent (FTE) is the amount of time an employee works as a percentage of full time, e.g. an employee appointed for twelve months on a project for exactly half of their working time would equate to an FTE of 0.5 (50%) for that period. The project FTE is the sum of the researchers’ FTE (both academic and research staff) and project postgraduate students (weighted value).

The project FTE is the driver for the calculation of the estates, infrastructure technicians, and indirect costs at project level.

  • All research staff (either directly incurred or directly allocated) are counted within the project FTE
  • TRAC defines researcher as "A Researcher in a project is anyone who will make a significant intellectual contribution to a research project. Typically such a person would be qualified to carry out independent or supervised research, might provide an academic lead for research, or could provide expert advice to a research project. A researcher has a thorough understanding of what they are doing, can interpret results and devise appropriate ways forward (rather than, for example, carrying out a set of routine operations under carefully supervised conditions). "
  • Although a researcher may not attract a salary cost (e.g. visiting academics), their time will still count towards the project FTE – therefore they should be included in the costing
  • The time of postgraduate research (PGR) students will count towards the project FTE, but its impact as a driver is weighted for different costs (indirect costs (0.2), laboratory estates charges (0.8) and generic (non-laboratory) estates charges (0.5))
  • Support staff (technicians, administrative staff) are excluded  
  • Estates cost, infrastructure technicians, and indirect costs = relevant institutional rate x sum of project FTE

FEC rates


The estates, infrastructure technician and indirect cost rates are calculated on an annual basis using TRAC methodology and agreed by UCL’s TRAC Committee and is externally audited.  

TRAC rates are updated each year and become effective from 1 February. Further External Guidance on TRAC and FEC can be found on the TRAC website.

Definitions


  • Directly Incurred (DI) costs are project-specific costs. They are supported by auditable records and include, staff directly employed for the project, travel costs and consumables
  • Directly Allocated costs (DA) are shared costs. They are based on estimates and do not represent actual costs on a project-by-project basis. This includes estates, infrastructure technicians and the Principal Investigators time
  • Indirect Costs do not relate to any one project or activity but are a necessary part of the costs of undertaking an activity
  • Cost to HEI is the Full Economic Cost (FEC) of Research to UCL minus the value we forecast the research will cost UCL
  • Cost to Funder is the estimated value being applied for within funder regulations
  • Price to Funder is the estimated Value of award (what the funder would pay, e.g., 80% FEC) 
  • Surplus/deficit (FEC % Recovery) is the difference between Price to Funder and Cost to HEI
  • Contribution to overheads is a contribution to cover the projects use of estates costs, indirect costs and DA Staff Costs. This figure is a live value that changes depending on costs entered, bearing in mind the more non-staff costs and non-research staff you have this can reduced the overhead rate/percentage
  • Project FTE is the total sum of the research staff Full Time Equivalent (FTE) included on the application. The project FTE is the driver for the calculation of the estates, infrastructure technicians and indirect costs at project level
  • Transparent Approach to Costing (TRAC) is the methodology developed with the higher education sector to help them cost their activities. It is an activity-based costing system adapted to academic culture in a way which also meets the needs of the main public funders
  • Full Economic Costing (FEC) is a government-directed standard costing methodology used across the UK Higher Education sector to produce consistent and transparent research project costs. The underlying principle of FEC is to establish the true cost of research, and for this to inform the amount requested from funders (the price).  In simple terms, FEC aims to capture all the running costs of the research project
  • FEC rates - UCL has a set rate for indirect costs across all UCL departments.  For estate rates these are divided into 3 rates A, B and C, with separate rates for infrastructure technician costs where applicable for departments. These are effective from 1st February each year.  The total research FTE is multiplied by these rates.