The Transparent Approach to Costing (TRAC) is the methodology developed with the higher education sector to help them cost their activities. It is an activity-based costing system adapted to academic culture in a way which also meets the needs of the main public funders of higher education.
TRAC uses institutional expenditure information from published financial statements and ‘cost adjustments’ to provide the ‘full economic cost’ of activities. It therefore encompasses both the direct and indirect costs of activities and an adjustment to the historic expenditure to reflect the full, sustainable costs of the activities.
Since the introduction of Annual TRAC in 2000, in addition to the primary application above, the TRAC method has been developed to provide three further costing applications:
An explanation of the four TRAC applications can be found in the Appendix of TRAC: Policy overview (2009).
The data from TRAC provides institutions with key information that can help managers understand and manage sustainability issues.
A guide has been produced on TRAC for senior managers and governing body members. This provides useful background on TRAC and its role in informing the sustainable costs of the institution.