Accounting expert urges Hefce to ditch ¡®unreliable¡¯ costing system under review. Jack Grove reports

A system used to measure the cost of teaching and research within universities should be scrapped because it produces ¡°incoherent results¡± and ¡°wrong conclusions¡±, a finance director has argued.

Critics of the Transparent Approach to Costing (Trac) have often complained about the paperwork required by the system, which attempts to establish the ¡°full economic costs¡± of individual courses, research projects and other university activities.

Trac is currently under review by the ³ÉÈËVRÊÓƵ Funding Council for England, with a view to cutting its estimated ?13.6 million annual costs, which equates to ?100,000 per higher education institution.

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However, John Robinson, finance director at Brunel University, has called for it to be abolished entirely.

Speaking at last month¡¯s Society for Research into ³ÉÈËVRÊÓƵ annual conference in Newport, South Wales, he said: ¡°I believe in costing and accounting but Trac is a bonkers way to do it.

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¡°The complaint is that academics do not use it properly - if you put garbage [data] in, you will get garbage out.

¡°We actually need to address some of the structural issues because the system does not work.¡±

Mr Robinson later explained to ³ÉÈËVRÊÓƵ that his chief complaint was that ¡°Trac adjustments¡± - adding sums for overheads or future investment in infrastructure to the cost of teaching and research - produce an unreliable ¡°proxy cost¡±.

¡°Cost adjustments at the project level make sense as a proxy for price of the overhead costs but they do not make sense when aggregated¡­within a university at course, departmental or institutional level,¡± he said.

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¡°The Trac-adjusted figures at institutional level have been used by Hefce as a guide to medium-term sustainability, but they are incoherent and lead to the wrong conclusions.¡±

He added that it meant Trac was treated as though it was a ¡°real cost¡± with a skewing effect on a university¡¯s accounts that could cause an institution to pursue misguided policies thereby damaging its long-term future.

¡°A university which would otherwise have a Trac deficit could get itself into a position to report a surplus precisely by cutting all investment costs,¡± he said.

¡°And if an activity, say a course, is in a Trac surplus or a Trac deficit then do you do more of it or less? The implication is that you would do more of a course with a surplus and less of one with a deficit, but this is wrong.¡±

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He said that with a course running a Trac deficit the answer may be to get more students to enrol to generate more income without increasing costs.

¡°Conversely, a course can be making a surplus but the lab is full and any additional students would require additional expensive resource that tips the course into deficit,¡± he said.

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Hefce¡¯s consultation closes on 11 January and a review group is due to make its recommendation to the body¡¯s board in spring 2013.

jack.grove@tsleducation.com.