Frequently asked questions

  • Does the Committee that approves my TRAC return meet the TRAC requirements?

    The TRAC process and data returns (the Annual TRAC return and charge-out rates and TRAC(T) return) require approval by a Committee of the Governing Body to confirm compliance with TRAC requirements prior to submission to the OfS/Funding Council.  Using Chair’s action to gain approval after the TRAC submission deadline is no longer allowed.

    TRAC requirements do not specify which Committee of the Governing Body should undertake the review, but the task falls most commonly to the Finance or Audit Committees.  The Committee that approves the TRAC returns should have at least one lay, independent or co-opted member and will usually be chaired by a member of the Governing Body (see TRAC Guidance ref. 2.1.5.8).

    Responses to questions received regarding the approval of the TRAC returns:

    Q1 – My TRAC Oversight Group is composed of members of Senior Management Team, all of whom sit on Committees of the Governing Body. Could I add a lay member to the Oversight group to satisfy the TRAC requirements?

    A1 – No, the extended TRAC Oversight Group is unlikely to be a formal Committee of the Governing Body.

    Q2 – The meeting schedule for the Finance Committee does not align to the TRAC submission deadlines, could we hold an extraordinary meeting of the Finance Committee to approve the TRAC returns?

    A2 – Yes, provided that the meeting is recognised as a formal committee meeting and is minuted, using an extraordinary meeting would satisfy TRAC requirements.

    Q3 – It is common practice for my Audit Committee to hold virtual meetings via video conference. Does the Audit Committee need to attend a physical meeting to approve the TRAC return?

    A3 – No, the TRAC Guidance only requires that a meeting is held. Therefore if virtual meetings are normal practice, a virtual meeting would be acceptable provided that the meeting is quorate, formally minuted and that Committee members can still access the relevant papers and reports from management to support a thorough consideration of the data return(s) and process followed to generate the returns.

    Q4 – Could the Governing Body approve the TRAC Returns rather than a Committee of the Governing Body?

    A4 – Yes, if the Governing Body could review the TRAC results directly, the task would not need to be delegated to a Committee of the Governing Body.

    Q5 – I can’t identify an appropriate Committee of the Governing Body to approve the TRAC returns before submission. What are the implications?

    A5 – If you are not able to meet the TRAC requirement to gain approval before submission, either by using an existing Committee meeting of the Governing Body, or via arranging an additional meeting then please discuss this with your OfS/ Funding Council contact as soon as possible.

    Q6 – The University Council usually approves our TRAC returns.  Could we establish a new Standing Committee of the Council to approve the TRAC return for this year only?

    A6 – Yes, providing that the Standing Committee is a formally recognised Committee of the Governing Body and the membership meets the TRAC requirements.

    Q7 – We can’t influence the Committee schedule this year and are seeking to set up specific arrangements to approve the TRAC returns. We cannot get sufficient members of each individual committee together to make the meeting quorate, but we can establish a meeting with some members of the Finance Committee and the Audit Committee in attendance. Could we hold an exceptional meeting with representatives from each committee to provide challenge and review of the TRAC data?

    A7 – No, this would not meet the TRAC requirements for approval as the new exceptional meeting would not be a formal committee of the Governing Body. If the institution wants to adopt this approach it should consult the OfS/Funding Council to ascertain whether this would be an accepted way of gaining approval.

  • Pre-Registration Nursing, Midwifery and Allied Health professions. Why has the student data for 2017-18 been updated?

    Please note that this is an issue that has only impacted providers in England that deliver pre-registration nursing, midwifery and allied health courses.

    The Office for Students has identified an error in the data that was used to populate the student FTEs in the 2017-18 TRAC(T) return which affected the split of FTEs between price groups in cost centre 103 for pre-registration nursing, midwifery and allied health courses.  The Office for Students has corrected the error for 2018-19,but this will mean that the FTEs and Subject-FACTS in cost centre 103 might not be comparable between years.

    The Office for Students will provide revised FTE data for 2017-18 within the 2018-19 TRAC(T) return, but is not seeking re-submitted Subject-FACTS for 2017-18.

    Further information is is available on the 2018-19 HESA student data checking tool page of the OfS website.

  • How does the new Office for Students annual financial return affect TRAC?

    For the 2018-19 academic year onwards, providers registered with the Office for Students (who are not further education or sixth form colleges) are required to submit an annual financial return to the OfS in place of the finance return they previously submitted to HESA. The OfS annual financial return collects both the information for the latest accounting period, and previous year, together with financial forecast information in a single return to the OfS. This change has been implemented following the consultation on the collection of financial data and was notified to Accountable Officers by email on 22 August 2019.

    This note clarifies the references made to the ‘HESA Finance record’ in the TRAC guidance (v2.4). The following table lists all references to the HESA Finance record in the TRAC guidance and provides the relevant references in the OfS annual finance return.

    Page of reference Section Paragraph Current wording New wording
    p.16 1.3.2.1 2 Higher Education Statistics Agency (HESA)

    in the HESA Finance record guidance

    Office for Students in the OfS annual financial return guidance
    p.18 1.3.2.5 1 HESA Finance record guidance OfS annual financial return guidance
    p.18 1.3.2.5 2 HESA Finance record guidance OfS annual financial return guidance
    p.18 1.3.2.5 3 Column 8 in Table 5 of the HESA Finance

    record guidance

    Column 8 in Table 5 of the OfS annual financial return
    p.18 1.3.2.5 5 HESA Finance record guidance OfS annual financial return guidance
    p.46 Footer 18 1 HESA Finance record Table 10 Not collected separately in the OfS annual financial return.
    p.50 3.1.5.7 3 HESA Finance record Table 10 Not collected separately in the OfS annual financial return, however institutions should still provide supplementary analysis for these items
    p.82 3.5.5.2 1 HESA Finance record Table 7. Institutions can populate the workbook with their HESA Finance return data OfS annual financial return Table 4. Institutions can populate the workbook with their OfS annual financial return data
    p.82 Footer 35 1 HESA Finance record Table 7 guidance OfS annual financial return Table 7 guidance. This can be found on the OfS website, which accompanies the OfS annual financial return pages
    p.84 3.5.5.6 1 HESA Finance Coding Manual OfS annual financial return guidance
    p.145 Material Items 2 HESA Finance record Table 10 Not collected separately in the OfS annual financial return

    Annex 3.5a: Income allocation guidance – worksheet for OfS regulated providers and Annex 3.5b Guidance on income allocation of OfS/ funding council grants are being updated to reflect these changes.

  • How do I complete Table A1 of the Annual TRAC return from the financial statements?

    The Annual TRAC return includes total income and total expenditure lines derived from the totals included in the institution’s Consolidated Statement of Comprehensive Income, adjusted, where appropriate, in respect of pension costs, gains or losses on disposal of fixed assets, gains or losses on investments, the share of surpluses/deficits in joint ventures and associates, taxation charges or credits and non-controlling interests (in line with section 3.1.4.8 of the TRAC guidance).

    The total income figure reported in the Annual TRAC return should reconcile to the consolidated financial statements as follows (with relevant reference to the TRAC guidance):

    • total income as reported in the consolidated financial statements
    • plus gain on disposal of fixed assets (3.1.5.3b)
    • plus gain on investments (3.1.5.3c)
    • plus the share of operating surpluses in joint ventures and associates as reported in the consolidated financial statements (3.1.5.4)
    • plus taxation credits (3.1.5.4a)

    The total expenditure figure reported in the Annual TRAC return should reconcile to the consolidated financial statements as follows (with relevant reference to the TRAC guidance):

    • total expenditure as reported in the consolidated financial statements
    • minus costs or plus credits attributable to the deficit recovery plan for certain multi-employer pension schemes (3.1.5.3a)
    • plus loss on disposal of fixed assets (3.1.5.3b)
    • plus loss on investments (3.1.5.3c)
    • plus the share of operating deficits in joint ventures and associates as reported in the consolidated financial statements (3.1.5.4)
    • plus taxation charges (3.1.5.4a)

    A worked example indicating the likely sources of information for completing Table A1 of the TRAC return from the financial statements is provided below.

    Annual TRAC return – Table A1 worked example

  • When UKRI undertakes a review of the TRAC process, what are the requirements against which our systems will be assessed?

    The UK Research and Innovation (UKRI) Funding Assurance Programme (FAP) provides assurance on the regularity of expenditure to the UKRI Accounting Officer. Information about the FAP process can be obtained from the UKRI website, or by contacting UKRI directly.

    UKRI will inform institutions how they will review TRAC systems in advance of each visit, and are likely to consider institutional self-assessment when designing their assurance programme.

    The TRAC requirements that were included in the TRAC guidance for the year being reviewed are the requirements that an institution’s level of compliance will be reviewed against (summarised in the TRAC Statement of Requirements document for ease of reference).

    The TRAC Development Group (TDG) has undertaken work to identify the more common areas where institutions may fall out of compliance with the TRAC requirements. To assist institutions in checking on their compliance, Annex 2.1b ‘TRAC assurance reminders checklist’ has been added to the TRAC guidance. This is a useful reference source of common issues for TRAC Practitioners when reviewing their own systems. It also contains a consolidation of the ‘What could go wrong’ sections of the TRAC Guidance. In addition, TDG has produced a good practice guide ‘An assurance framework for TRAC’ which is strongly supported  Gareth MacDonald, UKRI Head of Assurance.

  • How should Research and Development Expenditure Credits (RDEC) be treated in TRAC?

    A number of institutions have made RDEC claims. These are claims for a tax credit on eligible (not all) research expenditure. So financial statements for the year ending 31 July 2018 could contain income in respect of RDEC, and this income will be reflected in TRAC. This is a short-term benefit that is not expected to recur.

    RDEC income, although not a long-term source of income, is indeed income for institutions and therefore it is right to be included as income within TRAC. In the financial statements, RDEC is accounted for in two places – income, and taxation. There is a gross income figure in income, but this is subject to a tax charge, which appears on the taxation line. Therefore the net income to the institution is RDEC income, less taxation on that income.

    The Higher Education Statistics Agency (HESA) has included an additional column in table 5 to separate out the RDEC income which appears as income in the financial statements. The TRAC income allocation table (Annex 3.5a of the TRAC Guidance) reflects this, and allocates this income to ‘Other UK Government Departments’ in the Research sponsor-type analysis of the TRAC return.

    Given how RDEC income was accounted for in 2014-15, it was agreed that it was more appropriate for TRAC to report the ‘Net RDEC income’ figure (gross RDEC income less the taxation charge on this income). Following the review of TRAC guidance for FRS 102, all tax charges are now included in TRAC expenditure. Therefore, for 2016-17, RDEC income should be included gross within TRAC income (see section 3.1.5.4a and 3.3.5.2 of the TRAC Guidance v2.2).

  • How will the calculation of research income when considering eligibility to claim dispensation take into account the effect of volatility in research income resulting from the implementation of Financial Reporting Standard 102 (FRS 102)?

    The impact of FRS102 affects research income that is received for revenue and capital purposes, and there will be variation according to whether the accrual or performance model has been selected as the accounting policy for government grants.

    As the assessment of publicly funded research for dispensation purposes is an average taken over a five-year period, it is not expected that the impact of FRS102 will be material. Capital grants do, however, have the potential to distort the calculation of eligibility for dispensation.

  • How should pension costs be treated in TRAC?

    Pensions are by nature technical, and can be complex to understand. It is therefore necessary to consider the detail in order to understand how the accounting approaches differ for different schemes. The schemes used by universities are not all treated the same way in the Transparent Approach to Costing (TRAC).

    The purpose of this briefing note is to provide TRAC practitioners and members of higher education (HE) providers’ internal TRAC oversight groups with background information and understanding on the accounting treatment of the different pension schemes that are used by universities in the UK.

    View the pensions briefing note