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COSTING POLICY

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					COLLEGE COSTING POLICY AND PROCEDURE (Version 2008) 1 1.1 Introduction This document identifies the various policies and procedures in place for the costing and pricing of courses and other activity of the college. It identifies the processes for producing information for management reporting and decision making. The approach to costing activity has evolved as the College has grown. The methodologies used vary depending on the particular area of activity, though the application of a common set of standards for this work will ensure the accuracy of information provided and consistency across the College. This policy will assist College managers by identifying the correct approach to gathering information prior to decision making, and as a reference document when costing and planning provision.

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Course Planning The Course Planning Tool is a database established to provide specific information for the College when planning its provision. The main objectives of the system are to provide a single source of course data, to inform the planning process, to gather data as it becomes available and to improve management information. The course planning process has to meet a number of information requirements. From a costing perspective the following are the requirements to be met:         Comprehensive course planning spreadsheet with activity projections for year. Projections of income generated by course and by team. Listings of individual courses with projections of student numbers, the group size, the number of groups to run and the number of hours to be delivered. Staffing requirements based on the number of students and individual group size. Details of staffing deployment, and the staffing hours delivered by one team on behalf of another. The facilities required to deliver planned activity including accommodation, information technology and other specialist facilities. Maximising efficiency by identifying shared learning opportunities across groups. Provision of an audit trail so that as projections are updated, planned group sizes and staffing requirements can be amended.

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An example of the Course Hours Planning Spreadsheet is shown in Appendix 1. 2.3 The course planning cycle is a rolling process and spans more than one year. The detailed plan is included in Appendix 2, and the key costing elements of the plan are identified below:

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September – review full-time and part-time enrolments and close courses that are not viable. October – Feedback on cross college timetable grid. Rationalise accommodation. Feed into following year’s plan. November – For subsequent year, first drafts produced for: Cross-college timetable grid All full-time units and additional qualifications included in Course Planning Tool. January – Accommodation review and part-time planning for following September. Start planning for full time staffing. April – Timetables printed. Staffing details entered onto course planning tool. Staffing budget set and total hours per team agreed to course planning tool. May – Payroll budget sent to team heads for confirmation July – timetables issued.

Throughout the planning process, Heads of Teaching Teams are required to review their current provision. Proposals for new courses will be entered onto the course proposal form. This gives key information about the required resources including course delivery, staffing, accommodation, equipment, and consumables. This costing information will be assessed against the likely income generation and strategic importance of the course before the course is approved. The course proposal form is shown as Appendix 3. From the information produced by the Course Planning Tool, a summary of hours delivered across each College team will be produced. This will contain full time and part time hours across teams and hours required for the delivery of basic skills. In addition, it will include Backup hours, computer workshop and key skills hours, discrete contracts for language and sports assistants. Other categories to be included will be music tuition, work based learning placement officers, learning support workers and personal care assistants. A sample of the summary of hours produced by the Course Planning Tool is shown in Appendix 4. This summary of hours will be used to identify the payroll budgets. Team heads will be required to recruit the necessary staff to fulfil the required number of hours. Full time lecturing staff are expected to deliver 828 classroom contact hours a year. Staff with other duties, for example staff management responsibilities, will receive remission from their required teaching hours. The total hours available within a team’s existing compliment of staff after remission will be compared with the hours to be delivered as identified by the course planning tool, and this will identify the number of part time and casual contracts to be let.

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The viability of each course will be examined after enrolment to ensure the course has recruited sufficient students. For full-time courses this will take place in September each year. For part-time courses, this will take place shortly after enrolment is completed. The decision to close a course will be made by the Deputy Principal in conjunction with the relevant Head of Team. The decision will be based on financial and other factors including the strategic importance of a course, whether the course feeds, or provides a progression route from another course, and whether the course is developing or in decline.

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Staffing Lists Group The Staffing Lists Group is a forum to bring together a number of the management teams within the College to promote the efficient use of resources. It has input from the Executive Management Team representing curriculum areas, College Information Systems, Finance Team and the Personnel Team. The group meets as required during the planning process. Its purpose is to promote the efficient use of resources by effective planning and the provision of high quality information. It has the following terms of reference.  To ascertain planning and reporting information needs, and to identify a source for that information.  To share information held by each of the teams, and to discuss how this information may best be used, and the implications for decision making.  To ensure the effective identification of staffing requirements across College teams.  To investigate inconsistencies in the payroll budget and identify the causes of overspends.  To use the above information to ascertain the contribution each team makes to the College central costs.

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Home Office Contracts The College has contracts to provide education services at thirteen prison establishments across the South West. Each contract is with an individual prison, but negotiations are undertaken with the local LSC and ratified by the National LSC, Coventry. The contract costing is based on a spreadsheet compiled for each establishment. This will identify the various component costs for each programme. This spreadsheet is completed in June of each year, and forms the financial plan for that contract for the twelve months starting in August each year. A detailed listing of on-site staff will be maintained which will include the post, the total teaching hours for the year, the salary and any increments as they occur. This section will also include the national insurance costs and pension contributions payable for each post. The on-site salary costs will also include an allowance for the recovery of staff sickness and for training costs. The recording of the number of teaching hours for the year is important as this will be the basis for the recovery of all costs incurred under the contract. The Finance Team will base the costing on specifications of required hours and available budget supplied by the LSC. The staff listings will detail the number of teaching hours each member of staff is contracted to deliver. The terms of the contract allow for the partial or complete recovery of the costs of a number of staff based in Street. These are administrative staff and include three service managers, an administrator, personnel and payroll staff, and financial support. The extent to which these costs are recoverable is established at the contract tender stage. The model will include a share of the total amount recoverable for each prison establishment.

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By negotiation with the LSC, the college will on occasion secure funding for extra essential expenditure not covered by the contract at negotiation. All such costs will be identified in writing and submitted to the LSC for approval. The total of the costs described above will form the basis on which the contract profit will be calculated. The profit is earned at the rate of 5% of total costs. The price payable by the LSC for each hour delivered is set by the LSC. However some adjustment to the price will be possible by negotiation with the College based on the calculations above. Effective management reporting is central to the successful operation of the contracts. The Finance Manager will prepare a monthly reporting statement giving details of income and costs incurred for each establishment. The statements will be prepared for the current month and tabulated monthly showing the history of each contract for the current financial year.

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Contract Courses Contract courses are one-off or specialised courses which require costing for the whole group undertaking the course, rather than individual students. Appendix 6 identifies the procedure for planning and costing these courses. The process for planning a contract course includes a number of documents which will enable the College to calculate quotes, gain approval and confirm to external clients the terms of contract for the provision of bespoke courses including those leading to a qualification. These courses may be full cost or may also attract funding from other sources. The documents to be used are identified below:  Document 1 – Courses for external clients – interview form.  Document 2 – Notes for interview with prospective client.  Document 3 – Proposal to run a contract course.  Document 4 – Costing for contract course (notes)  Document 5 – Costing sheet  Documents 6 & 7 – Letter and contract.

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The process to be followed when costing a contract course is identified below:  Prospective client contacts College.  Head / Deputy Head of Team (HOT/DHOT) meets client and completes document 1.  HOT/DHOT completes proposal form and costing sheet (multiple copies).  Deputy Principal approves course and cost.  HOT/DHOT prepares letter of agreement and contract, two copies sent to client for signature and return and sets up course on course planning tool.  Head of College Information Systems allocates a Strode course code.  At first session with client’s students, a contract course enrolment form is completed by all students. The tutor consults with HOT/DHOT to calculate individual fees and record registration costs and sends all enrolment forms to Admissions with covering information sheet. The client will be shown as the sponsor so that invoices will be generated showing all student names and overall fee.  Admissions return the forms and the learning agreements to the tutor.  The tutor ensures that exams registers the students for any papers they will sit.

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Payroll Costing and Reporting The content of this section overlaps to some extent with section 2 on Course Planning. When setting the payroll budget, last year’s budget will be used as the initial working template. The following actions will then occur.   Staff details will be reviewed individually, with reference to original contracts, personnel documents and details recorded on the payroll system. In the case of salaried staff, salaries will be checked against payroll forms and payscales, and an increment is included in the charge for the year where appropriate. In the case of contracted staff, contracts will be budgeted with reference to expected activity levels provided by Heads of Team on the basis of course planning. Each contract will be recorded separately and expected hours analysed on a monthly schedule. The budget will then be compared with current payroll output to identify new staff members who have started during the year, and these are added to the budget with reference to original documents in the same manner. A final check of payroll output will be performed to identify any staff that have left since the beginning of the budgeting process. A claims budget will be modelled on information from Heads of Team Expected Employers’ National Insurance and Superannuation contributions will then be calculated on the basis of the latest current information from the relevant pension authority. Expected agency costs and re-structuring costs are budgeted with reference to previous years’ expenditure patterns. Finally, the expected cost of living award will be applied globally from August to all relevant costs. A draft payroll budget can then be produced detailing staff and contracted teaching hours. This will be circulated to Team Heads for confirmation that the budget is consistent with the planned hours to be delivered on the course planning tool. Teams will then be required to deliver their planned activity within the budget allocation. Changes to the planned programme will be noted when investigating budget variances.

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