Finance Business Systems

 

Research Support - Costing and Pricing

 

Indirect Costs

  1. Indirect costs are charged to research projects via an indirect cost rate
     
  2. These costs are different from 'directly incurred' (DI) costs, (research assistants, consumables, etc). DI costs are dedicated to that project and would not be incurred if the project did not take place. They can be charged directly to a project.
     
  3. Indirect costs are needed to support projects or programmes, but do not have the same direct link with any one project as directly incurred costs. Therefore proxies have to be used to attribute these costs to projects. The proxy for indirect costs is a £/FTE charge-out rate
     
  4. The indirect costs used to calculate the charge-out rate are derived from the TRAC Support cost total, produced from the annual TRAC process. As part of this process, each type of Support cost had been attributed between Teaching, Research and Other. The total indirect costs for Research divided by the total FTEs for Research provides the indirect cost rate for Research (£ per FTE). These rates are calculated annually, using historical data. There is no forecasting or estimating of either costs or FTEs. The £/FTE rates are then applied to the direct Research time of the staff and PGRs carrying out Research, expressed as FTEs.
     
  5. One indirect cost rate for Research, covering all research activity, is used, as the costs do not vary significantly by type of project or department.

 

Indirect costs consist of:

  • the Support time (cost) of academics o clerical and administrative staff in academic departments *
     
  • non-staff costs in academic departments *
     
  • central services including academic services such as the library and information services, personnel, finance etc.
     
  • the estates costs of central service departments
     
  • the gross cost of capital employed (incorporating interest and restructuring costs).

 

The calculation of the Indirect Costs is made by multiplying the total FTEs for the project (as explained under the Estates Charge section of Directly Allocated Costs) by the Indirect Charge Rate. The Indirect Charge rate can be found by clicking on the following link:-

http://imp.uwe.ac.uk/imp_public/displayEntry.asp?URN=1754&rp=listEntry.asp