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 Higher Education 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.
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 Higher Education annual conference in Newport, South Wales, he said: “I believe in costing and accounting but Trac is a bonkers way to do it.
“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 Times Higher Education 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.
“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.”
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.
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.