Full Costing. EUIMA Project Final Event Horizon 2020 and the modernisation of European universities Dialogue with European policy makers

Transcription

1 Thomas A. H. Schöck Chancellor Friedrich-Alexander-Universität Erlangen-Nürnberg Full Costing EUIMA Project Final Event Horizon 2020 and the modernisation of European universities Dialogue with European policy makers Brussels, 10 May 2012

2 Table of contents 2 A. FAU - facts and figures B. Implementation of full costing I. Definition full costing II. Benefits of full costing III. 6 steps to full costing at universities IV. Difficulties for Bavarian universities

3 Table of contents 3 C. Implementing full costing at FAU I. Method II. Online-tool data D. Current legal requirements for implementing full costing I. R&D&I Framework II. FP 7

4 Table of contents 4 E. New legal requirements Horizon 2020 Preface I. Alterations in respect of full costing II. Other important alterations III. Road map to the implementation of Horizon 2020 IV. Consequences of Horizon 2020 F. Conclusion

5 5 Beyond the horizon What dreams may come? Shakespeare s Hamlet

6 A. FAU - facts and figures (2011) 6 Structure: 5 faculties 12,000 members of staff University Hospital with 24 Clinics 640 professorships Teaching: 149 courses of studies 33,487 students (2,537 of which international students)

7 A. FAU - facts and figures (2011) 7 Research: 144 million third party funding (= 14,4% of the total budget funds) Excellence Initiative (established by the German Federal Government and the Federal State Governments to promote sciences and research at German universities) 1 Graduate School in Advanced Optical Technologies (SAOT) = interdisciplinary research and education program of excellence within a broad international network of distinguished experts to promote innovation and leadership, very broad education provided across the faculties in the fundamentals of optical technologies and different application

8 A. FAU facts and figures (2011) 8 1 Excellence Initiative Research Cluster Engineering of Advanced Materials (EAM) = the only interdisciplinary research collaboration of its type in Germany to focus on the investigation of functional materials and their processing at all length scales 11 DFG (Germany s largest research funding organisation) Research Units 7 DFG Research Training Groups

9 A. FAU - facts and figures 9 Third party funding in Mio

10 A. FAU - facts and figures 10 External research funding 2010 DFG; 47 Mio. Federal donations; 20 Mio. EU-projects; 6 Mio. iscellaneous; 1 Mio. Third-party donations (industry, etc.); 50 Mio. Endowed professorships; 1 Mio.

11 B. Implementation of full costing 11 I. Definition full costing A managerial accounting method that describes when all fixed and variable costs are used to compute the total costs per unit. Full costing includes these costs when computing the amount of money it takes to produce and distribute one unit of output. Alternative: the use of a single flat rate

12 B. Implementation of full costing 12 II. Benefits of full costing higher awareness of private and public financiers concerning the amount of the indirect costs higher transparency increase of efficiency of universities strengthening of universities competitiveness and therefore strengthening of the European research area

13 B. Implementation of full costing 13 III. 6 steps to full costing at universities 1. Distribution of direct costs to cost centres and cost units 2. Liquidation of clearing cost centres (overhead) and distribution to cost centres 3. Distribution of the costs of central services to cost centres

14 B. Implementation of full costing Distribution of the costs of the data centre to cost centres and cost units 5. Distribution of the costs of library to cost centres and cost units 6. Distribution of the costs of faculty administration to cost centres and cost units

15 B. Implementation of full costing 15 IV. Difficulties for Bavarian universities 1. Rent and house maintenance: university buildings are property of the State of Bavaria or are real estate of corporation bodies (owner-tenant-model, management-model) buildings are very old and depreciated; at the same time the utility costs are very high IMBY = state controlled agency in charge of all real estates belonging to the Free State of Bavaria

16 B. Implementation of full costing Staff costs: necessity to allocate the actual costs of permanent staff, which are part of the indirect costs (administration staff, technicians)

17 C. Implementing full costing 17 at FAU I. Method FAU will provide an online-tool for the calculation of costs within the scope of R&D projects planned starting date June 2012 all relevant cost categories are taken into account the users of the online-tool are encouraged to demand a higher price than the calculated price

18 C. Implementing full costing 18 at FAU II. Online-tool datas E. Implementing full costing at FAU 1. General information to be documented project title acronym client duration of the project chair chair holder principal investigator calculation number into scientific and non-scientific personal

19 2. Costs in detail at FAU 19

20 D. Current legal requirements for 20 implementing full costing I. R&D&I Framework = Community Framework for State Research and Development and Innovation 1. Field of application The R&D&I Framework applies to all R&D projects which are funded by business enterprises. At FAU it applies to an amount of 50 Mio. /year.

21 D. Current legal requirements for 21 implementing full 2. Requirements of Art. 107 (1) TFEU *Treaty on the functioning of the European Union Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. * * Treaty on the functioning of the European Union Save as otherwise provided in the

22 D. Current legal requirements for 22 implementing full costing 3. Consequences for research organisations The public funding of the non-economic activities will not fall under Art. 107 (1) TFEU, if the two kinds of activities and their costs and funding can be clearly separated. The public funding of the economic activities will not fall under Art. 107 (1) TFEU, if the service is offered at market prices or at full costs plus an appropriate profit margin.

23 D. Current legal requirements for 23 implementing full costing II. FP 7 1. Field of application FP 7 applies to all projects funded by the European Union during the 7 th Framework Programme. At FAU it applies to about 6 Mio. /year. 2. Determination methods of indirect costs actual direct costs = aim of FP 7 requires the implementation of full costing simplified method (indirect costs can be calculated for the legal person as a whole) = is an exemption and is barely used by German universities

24 D. Current legal requirements for 24 implementing full costing general transitional flat rate of 60% of the direct costs by recovering 75% (RTD) of the sum of direct and indirect costs for universities and research organisations (temporary solution until the end of 2013, than full costing required) The rules for participating in FP 7 stipulate the need to implement full costing. Due to the necessary extensive changes and challenges, the EU provided a transitional flat rate only for the transitional period.

25 D. Current legal requirements for 25 implementing full costing 3. Eligibility of costs in FP 7; actual problems eligible costs are: direct costs: especially personal, depreciation on equipment, travel costs and consumables indirect costs (overhead): depreciation on premises, utility costs, maintenance, costs for legal and finance departments etc.

26 D. Current legal requirements for 26 implementing full Problems with direct costs: recording of working time: use of timesheets hourly rates: calculation method salary of permanent staff: double financing

27 D. Current legal requirements for 27 implementing full costing Problems with indirect costs: VAT: non-eligible rent: calculation allocation of personal costs (administrative staff, technicians) separation of research and teaching

28 E. New legal requirements 28 - Horizon 2020 Preface: The R&D&I Framework will remain unchanged. FP 7 will be replaced by Horizon Consequences: It would still be necessary to implement full costing for R&D projects funded by business enterprises (FAU: 50 Mio. /year). It would not be necessary to implement full costing for Horizon 2020 projects (FAU: 6 Mio. /year).

29 E. New legal requirements 29 - Horizon 2020 I. Alterations in respect of full costing 1. A single set of rules adapted for the whole research and innovation cycle covering all research programmes and funding bodies up to now a whole range of specific funding rules exists

30 E. New legal requirements 30 - Horizon One project one funding rate maximum of 100% of the total eligible costs it is extremely important to ensure that the 100% rate will be applied Indirect costs: a flat rate of 20% of direct eligible costs = 100% + 20% = 120%

31 E. New legal requirements 31 - Horizon 2020 II. Other important alterations 1. Simple evaluation criteria excellence impact implementation replace uncertain evaluation criteria 2. Simpler rules for grants e.g.: no time-sheets for personal working full time on a project 3. Fewer and better targeted controls and audits focused on risk and fraud prevention frequency of audits increased during FP 7

32 E. New legal requirements 32 - Horizon 2020 III. Road map to the implementation of Horizon 2020 Mid 2012: Final calls under 7th Framework Programme for research to bridge gap towards Horizon 2020 Mid 2013: Adoption of legislative acts by Parliament and Council on Horizon Horizon 2020 starts, launch of first calls

33 E. New legal requirements 33 - Horizon 2020 IV. Consequences of Horizon 2020 For R&D activities within Horizon 2020: no need to demonstrate full costs For other R&D projects: no direct consequences Horizon 2020 may reduce the motivation to implement full costing

34 F. Conclusion 34 Beyond the horizon: Consequences of Horizon 2020: Contradiction between the fact that full costing is required by the R&D&I Framework for R&D projects with others than the European Commission and the fact that no full costing would be required for R&D projects of the European Commission within Horizon 2020.

35 Thank you very much for your attention! 35