Education, research and innovation Implementing full costing at Lund University EUA workshop: Belgium, 4 February 2011 Ann-Kristin Mattsson
One of Europe s leading universities Founded in 1666 46 000 students 2 800 doctoral students 6 000 employees 562 professors (18 % women) Eight faculties Several campuses EUR 620 million turnover
Vision and overall goals Vision Lund University shall stand among the very best of European universities Overall goals Highest quality in education and research
Faculties Engineering Science Law Social Sciences Economics and Management Medicine Humanities and Theology Fine and Performing Arts
Income 2009 EUR 620 million 1% 10% Direct government funding Revenue from grants 32% 57% Fees and other charges Financial income
Costs 2009 EUR 574 million 0% 4% Cost of staff 22% 15% 59% Cost of premises Other operational costs Financial expenses Depreciation
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
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
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
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
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
Levels Levels for support activities - central - faculty - department
Functions Management Administrative support for education or research Finance and human resources management Infrastructure and service Libraries Other
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)
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
Calculation of % Function Activities Utbildning Forskning Totalt Universitetets gemensamma kostnader Belopp i tkr Belopp i tkr Belopp i tkr Funktioner Kostnad Kostnad Ledning 14 177 20 071 34 248 Utbildnings- eller forskningsadm 135 077 59 860 194 937 Ekonomi- och personaladm 22 295 49 658 71 953 Infrastruktur och service 35 308 60 524 95 832 Bibliotek 28 998 52 640 81 638 Nivåspecifikt mm 0 0 0 Summa 235 855 242 753 478 608 Områdets gemensamma kostnader Funktioner Kostnad Kostnad Ledning 2 109 1 490 3 599 Utbildnings- eller forskningsadm 4 584 1 798 6 382 Ekonomi- och personaladm 1 317 1 293 2 610 Infrastruktur och service 621 368 989 Bibliotek 9 121 3 909 13 030 Nivåspecifikt mm 0 0 0 Summa 17 752 8 858 26 610 Level Institutionens gemensamma kostnader Funktioner Kostnad Kostnad Ledning 1 172 305 1 477 Utbildnings- eller forskningsadm 2 776 755 3 531 Ekonomi- och personaladm 745 194 939 Infrastruktur och service 1 874 575 2 449 Bibliotek 0 Nivåspecifikt mm 183 183 Summa 6 567 2 012 8 579 Calculation Påläggsberäkning vid institutionen Nivå Kostnad Pålägg Kostnad Pålägg Tot kostn Universitetsgemensamt 4 703 24,39% 2 750 11,38% 7 453 Områdesgemensamt 2 681 13,90% 1 980 8,19% 4 661 Institutionsgemensamt 6 567 34,06% 2 012 8,32% 8 579 Summa 13 951 72,36% 6 742 27,89% 20 693 Allocation basis (cost driver) Fördelningsbas Institutionens fördelningsbas består av Belopp Direkt lön+drift exklusive stipendier och Utbildning Forskning Totalt avskrivningar 19 281 24 172 43 453
Project costs in application and report Cost of staff incl. social security expenses 15 000 Cost of premises 2 500 Other operating costs 5 000 Direct costs 22 500 Indirect costs 32 % of 15000+5000 6 400 Total project costs 28 900 Contribution from funding body e.g. 75 % 21 675 University s own contribution (co-financing) 7 225
Costing for research project Projektkostnader Fullkostnadskalkyl för bidragsansökan Bilaga År 2009 2010 2011 Summa Direkta kostnader Löner inkl. soc avg 0 Driftkostnader 0 Utrustning/avskrivningar 0 Lokaler 0 Summa direkta kostnader 0 0 0 0 Indirekta kostnader 0 Summa projektkostnader 0 0 0 0 Finansiering Finansiär 2009 2010 2011 Summa Finansiär, inomstatligt bidrag 0 Finansiär, inomstatligt bidrag 0 Finansiär, utomstatligt bidrag 0 Finansiär, utomstatligt bidrag 0 Universitetet, egen finansiering 0 Summa projektfinansiering 0 0 0 0 Datum Huvudsökandens underskrift Ansökan och kalkyl godkänd av prefekt Namnförtydligande Namnförtydligande
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
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
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
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)
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