Education, research and innovation. Implementing full costing at Lund University EUA workshop: Belgium, 4 February 2011 Ann-Kristin Mattsson
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1 Education, research and innovation Implementing full costing at Lund University EUA workshop: Belgium, 4 February 2011 Ann-Kristin Mattsson
2 One of Europe s leading universities Founded in students doctoral students employees 562 professors (18 % women) Eight faculties Several campuses EUR 620 million turnover
3 Vision and overall goals Vision Lund University shall stand among the very best of European universities Overall goals Highest quality in education and research
4 Faculties Engineering Science Law Social Sciences Economics and Management Medicine Humanities and Theology Fine and Performing Arts
5 Income 2009 EUR 620 million 1% 10% Direct government funding Revenue from grants 32% 57% Fees and other charges Financial income
6 Costs 2009 EUR 574 million 0% 4% Cost of staff 22% 15% 59% Cost of premises Other operational costs Financial expenses Depreciation
7 Research funding 2009 EUR 415 million 3% 1% Direct government funding 14% 5% 11% 21% 45% Government research funding bodies Other public funding EU Private funding, swedish Private funding, foreign Financial income
8 Starting-point In 1993 income and cost accounting was introduced for government agencies, incl. HEIs Activities defined - education - research and doctoral education Income from external funding for research = costs during the financial year, the rest is prepayment = assets, not income Prepayment 200 costs 100 cost 100 income 100 income 100
9 GOV. FUNDING EXTERNAL FUNDING Education Research INDIRECT COSTS CENTRAL FACULTY DEPARTMENT COST OBJECT X X X X X X X X EDUCATION RESEARCH admin. infrastruc.. admin. infrastruc.. admin. infrastruc.. Direct cost B U D G E T
10 The model step by step Operations are divided into core activities and support activities Core activities = education commissioned education research and divided into cost objects Cost object = activity for which a separate measurement of total income and total cost is desired Cost object = e.g. research project, research team, course
11 The model step by step Support activities - for education - for commissioned education - for research - for both education and research - allocation on basis of management estimation or a relevant allocation principle Costs for support activities divided into education/research are accumulated and allocated to cost objects
12 Levels Levels for support activities - central - faculty - department
13 Functions Management Administrative support for education or research Finance and human resources management Infrastructure and service Libraries Other
14 The model Cost allocation basis (cost driver) for allocation to cost objects = direct labour costs or = direct labour costs + direct operating costs (for universities with faculties of medicine) Core activities at department level (mainly)
15 NEW!!! Indirect costs are allocated to cost objects GOV. FUNDING Education Research EXTERNAL FUNDING NEW!!! Method for allocation INDIRECT COSTS CENTRAL FACULTY DEPARTMENT COST OBJECT X X X X X X X X EDUCATION RESEARCH admin. infrastruc.. admin. infrastruc.. admin. infrastruc.. Direct cost B U D G E T
16 Calculation of % Function Activities Utbildning Forskning Totalt Universitetets gemensamma kostnader Belopp i tkr Belopp i tkr Belopp i tkr Funktioner Kostnad Kostnad Ledning Utbildnings- eller forskningsadm Ekonomi- och personaladm Infrastruktur och service Bibliotek Nivåspecifikt mm Summa Områdets gemensamma kostnader Funktioner Kostnad Kostnad Ledning Utbildnings- eller forskningsadm Ekonomi- och personaladm Infrastruktur och service Bibliotek Nivåspecifikt mm Summa Level Institutionens gemensamma kostnader Funktioner Kostnad Kostnad Ledning Utbildnings- eller forskningsadm Ekonomi- och personaladm Infrastruktur och service Bibliotek 0 Nivåspecifikt mm Summa Calculation Påläggsberäkning vid institutionen Nivå Kostnad Pålägg Kostnad Pålägg Tot kostn Universitetsgemensamt ,39% ,38% Områdesgemensamt ,90% ,19% Institutionsgemensamt ,06% ,32% Summa ,36% ,89% Allocation basis (cost driver) Fördelningsbas Institutionens fördelningsbas består av Belopp Direkt lön+drift exklusive stipendier och Utbildning Forskning Totalt avskrivningar
17 Project costs in application and report Cost of staff incl. social security expenses Cost of premises Other operating costs Direct costs Indirect costs 32 % of Total project costs Contribution from funding body e.g. 75 % University s own contribution (co-financing) 7 225
18 Costing for research project Projektkostnader Fullkostnadskalkyl för bidragsansökan Bilaga År Summa Direkta kostnader Löner inkl. soc avg 0 Driftkostnader 0 Utrustning/avskrivningar 0 Lokaler 0 Summa direkta kostnader Indirekta kostnader 0 Summa projektkostnader Finansiering Finansiär Summa Finansiär, inomstatligt bidrag 0 Finansiär, inomstatligt bidrag 0 Finansiär, utomstatligt bidrag 0 Finansiär, utomstatligt bidrag 0 Universitetet, egen finansiering 0 Summa projektfinansiering Datum Huvudsökandens underskrift Ansökan och kalkyl godkänd av prefekt Namnförtydligande Namnförtydligande
19 Result average per faculty Education Research Engineering 100 % 36 % Science 70 % 35 % Law 103 % 59 % Social Sciences 66 % 33 % Economics and Management 74 % 32 % Medicine 49 % 22 % Humanities and Theology 88 % 50 % Fine and Performing Arts 81 % 53 % 74 % 32 % Basis = direct labour costs + direct operating costs Cost of premises for education and research not included
20 What s left? Cost for premises Time allocation Effect on resource allocation system How to use full costing as a strategic management tool Quality in information
21 Time allocation Plan for working hours for each individual in budget for the forthcoming year Basis for cost allocation to cost objects Changes during the year are recorded Time recording for special projects where time recording is mandatory, Excel sheet Difficult question, trade union is opposed One step at a time
22 How many - for how long? Started talking about it in 2005 Decision December 2007, implementation ready 1 January 2009 (actually 1 March ) 2008 (6 people, engaged part-time in project) information to administrators, heads of department, researchers building the model, technical development in system 2009 changes, improvement, information (2 people parttime) 2010 quality review (2 people part-time)
23
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