Funding assurance programme

The funding assurance programme provides assurance to the UK Research and Innovation (UKRI) accounting officer that public funds destined for research are properly safeguarded and used for the purposes intended by parliament.

This is achieved by examining compliance with the terms and conditions which accompany research funding across four pillars of assurance:

  • research grants and fellowships
  • doctoral training funding
  • transparent approach to costing
  • non-financial terms and conditions.

Although a range of risk factors are considered, the most research-intensive research organisations should expect assurance activity approximately every three years.

UKRI Funding Assurance undertake assignments either as visits to research organisations or as desk-based reviews.  Each assignment begins with research organisations:

  • completing a self-assessment questionnaire
  • completing a portfolio reconciliation summary
  • providing selected transaction and staffing or student lists.

The assurance process focuses on the control environment at both pre- and post-award stage followed by substantive testing over a sample of:

  • research grants
  • fellowships
  • training grants.

When UKRI Funding Assurance identify weaknesses in research administration or ineligible expenditure, recommendations and actions are issued to research organisations to establish the appropriate corrective action required.

Where common, or systemic issues materialise, UKRI Funding Assurance seek to provide additional guidance and support to research organisations:

  • through attendance at events
  • through liaison with sector representatives
  • by working with UKRI funding policy to improve clarity of UKRI terms and conditions.

Funding assurance reminders

Research organisations are encouraged to review compliance against UKRI funding assurance reminders and to take appropriate action to amend current practices as necessary.

Directly incurred staff costs

Research organisations are reminded that all directly incurred expenditure must be charged to awards on an actual cost basis rather than as a budgeted cost, and therefore an underlying audit trail must be maintained.

UKRI Funding Assurance have identified several examples during 2021 and 2022 where the audit trail for directly incurred staff costs has not been maintained.

Additional clarity will be provided through UKRI terms and conditions during 2022, but in the meantime, research organisations are reminded that where staff work across more than one activity (such as where the individual is not working 100% of their time on one project), the following records must be maintained:

  • timesheets must be retained over the life of all UKRI-funded projects and these must be completed and authorised, as a minimum, by the relevant line manager in a timely manner to ensure records are accurate, but no later than two months after period end
  • timesheets must include all activities the individual has worked on during the relevant period
  • timesheets must be completed on an all hours worked basis totalling the cumulative hours per month (as a minimum time period), including any non-productive time, for example, annual leave
  • the staff costs for individuals required to complete timesheets must reflect the actual, rather than budgeted, hours worked on each UKRI project.

For clarity, by definition, no specific format for a timesheet is provided by UKRI. When determining compliance with UKRI terms and conditions, research organisations should note that a ‘timesheet’ is a generic reference to a record of the amount of time an individual has spent on each activity they have worked on for a fixed period.  Timesheets can be physical copies of paper with signatures, an electronically completed workbook or a dedicated software solution provided that the tool maintains an audit trail of completion and authorisation dates.

Collaboration with funders and regulators

UKRI have signed collaboration agreements with the Wellcome Trust and the National Institute for Health and Care Research, copies of which can be made available as required.

UKRI have also signed a collaboration agreement with the Office for Students confirming how the two organisations work together on shared priorities across research and teaching. The collaboration agreement establishes protocols for sharing information related to transparent approach to costing (TRAC) compliance and governance.

Dispensation

The threshold at which higher education providers (HEPs) are eligible for dispensation from the need to comply with the full TRAC requirements is £3 million per annum of publicly-funded income, calculated as a five-year rolling average.

Being eligible for and applying dispensation reduces the administrative burden of TRAC for HEPs that have low levels of publicly-funded income, but applying dispensation is an institutional decision. Being eligible for dispensation does not preclude HEPs from deciding to fully comply with TRAC requirements and to calculate their own rates.

HEPs that are eligible for, and claiming dispensation, while being required to submit annual TRAC returns for accountability purposes, do not need to comply fully with all the requirements of TRAC. Institutions eligible for, and claiming dispensation:

  • do not have to obtain time allocation data robustly from academics (for example, heads of academic departments could provide this information)
  • do not need to identify space usage robustly across the whole institution
  • do not need to take into account the type of space when allocating space costs
  • are not permitted to calculate and apply laboratory technicians and research facility charge-out rates
  • do not need to calculate staff full-time equivalences robustly
  • should apply the lower of their own indirect charge-out rate, or the dispensation indirect charge-out rate, to research council and other government department cost-based research projects
  • should apply the lower of their own estates charge-out rate, or the dispensation estates rate, to research council and other government department cost-based research projects.

For more information about dispensation, read Annex 1.2b of the TRAC guidance.

The dispensation rates are updated annually and are set at the sector lower quartiles, which for 2022 to 2023 are:

Indexed rate expressed as £ per staff FTE (based on 2020 to 2021 data indexed for two years) TRAC upper quartile rates for the sector TRAC lower quartile rates for the sector
Indirect cost rate £59,540 £50,377
Laboratory estates rate £17,049 £12,355
Non-laboratory estates rate £10,203 £6,054

(Information published 1 July 2022)

The 2022 to 2023 dispensation rates are applicable immediately from the date of publication until they are replaced with the 2023 to 2024 rates in spring and summer 2023.

IRO, PSRE and RI guidance

Although independent research organisations (IROs), public sector research establishments (PSREs) and research institutions (RIs) are rarely required to submit annual TRAC returns, the TRAC  principles should still be followed where relevant when costing research projects.

Any non-higher education provider research organisation that receives an average of £3 million per annum (over the previous five years) in publicly-funded research income per annum is required to calculate their own rates for the year that the threshold has been passed.

The rates should be reported to UKRI via completion of a full economic cost (fEC) self-assessment questionnaire explaining how the rates have been calculated.

Research organisations that receive an average of less than £3 million per annum (over the previous five years) in publicly funded research funding per annum can choose either to use the dispensation rates or calculate their own rates.

Changes or circumstance:

  • if currently using dispensation rates, but publicly funded research income increases so that the five-year rolling average moves above the £3 million threshold, then the research organisation will be required to calculate their own rates and report them to UKRI using the fEC self-assessment questionnaire for the year that the threshold has been passed
  • if currently using own calculated rates, and publicly-funded research income decreases so that their five-year rolling average is now below the £3 million threshold, research organisations can either continue using their own rates (as verified by UKRI Funding Assurance) or opt to use the dispensation rate.

All research organisations that are using their own rates are required to re-submit a new fEC self-assessment questionnaire annually, clearly stating the updated charge-out rates applicable to new applications, and the date that they are applicable from.  More frequent submissions will be required if significant changes to the methodology or the rates are identified in the intervening period.

Full economic costing rates

Independent research organisations, research institutes and public sector research establishments can use dispensation rates (if they meet the eligibility criteria set out above) or can calculate their own rates for validation by UKRI Funding Assurance.

Further information

You can find further guidance on transparent approach to costing and full economic costing in the TRAC guidance available on the TRAC website. Historical guidance is available from the TRAC guidance archive.

Annual TRAC 2018 to 2019: sector summary and analysis by TRAC peer group data are published by the Office for Students.

For further information on the dispensation rates and eligibility to apply them, contact Andrew Dicken on 01793 413 224 or email andrew.dicken@ukri.org

Contact the TRAC support unit by emailing trachelpdesk@kpmg.co.uk or phone 0115 935 3400 for information on the quartile rates.

Last updated: 27 September 2022

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