What are the overhead rates?

TRAC identifies direct and overhead costs similar to the costing of research projects. The costs that cannot be directly attributed to an activity are classified as overheads. These are allocated across the main activities, namely Teaching, Research and Other. The research overheads are derived from Research element of these costs.

Research overhead costs are split further into Estates, Indirect and Technician costs. These rates are used when costing research proposals:

  • Estates rate– The cost to operate and maintain the infrastructure (e.g. buildings, laboratory space, utilities the College has);
  • Infrastructure technician rate – The cost of providing support related to stores, lab equipment maintenance, lab management, Health and Safety, which cannot be assigned directly to a research project;
  • Indirect rate – The cost to deliver all other non-direct costs related to research that cannot be assigned to either of the above cost pools.

Once submitted these rates are used for the following year (February-January) on all research proposals. The latest rates can be found here: TRAC Estates and Indirect rates 2018/19

Frequently Asked Questions

How are the indirect and estates overhead rates calculated?

The numerator of this calculation is the relevant research costs. The denominator is research assistants, proportion of academic FTE spent on research (as per their TOAST return) and a weighted* postgraduate research student FTE.

*0.2 – Indirect, 0.5 – Estates non-laboratory, 0.8 – Estates laboratory 

Research overhead rates

The rates also include the research element of MSI (Margin for Sustainability and Investment) and indexation.

Margin for Sustainability and Investment (MSI)

MSI is an estimate of the cash, or margin, an institution expects to generate from its operating activity for reinvestment in its estate (e.g. buildings).

This figure is calculated using an average of actual financial performance from the last three years and forecasted financial performance for the next three years. The latter derived from the 5-yr financial forecast submitted to OfS, which is signed off by the Council.

Indexation

The rates calculated are based upon the latest audited financial statements, the subsequent rates are used on research grant proposals from the following February (one-year time lag). It is also likely for any proposals submitted the spend related to these projects will not be incurred for at least a year. For this reason, the rates are indexed by two years to factor these time lags in.