CG 5.1 Scope
CG 5.1.1 This Costing guideline outlines an approach for identifying the scope and source of expenses, activity and costing application which relate to Research.
CG 5.1.2 In general terms, Research activities are those where the primary aim is the advancement of knowledge through observation; data analysis and interpretation; or other techniques that do not involve the provision of patient care.
CG 5.1.3 Curriculum-based research projects are deemed as teaching and not research.
CG 5.1.4 Where research requires delivery of patient care such a clinical trial, these activities are part of patient products and not be allocated to the research product.
CG 5.1.5 Costing Practitioners must ensure research expense is aligned with the research product. The key to determining research expense is through discussions with relevant stakeholders throughout the hospital.
CG 5.2 Objective
CG 5.2.1 To ensure that research related costs are identified into products categories that sufficiently differentiate it from other products (such as Teaching and Training).
CG 5.2.2 To ensure that products that relate to research include those expenses and activities that have occurred within the period are correctly identified and appropriately costed to final products.
CG 5.3 Costing guideline
Step 1: Create a direct and indirect (overhead) Research final cost centre
CG 5.3.1 Costing practitioners should establish a Research direct and indirect final cost centre within the costing system to align expense which are within scope.
Step 2: Align direct research expense to the Research final cost centre
CG 5.3.2 Costing practitioners should meet with relevant stakeholders to determine research related cost centres and the proportion of staff Full Time Equivalents (FTE) located in other cost centres that support or undertake research activities.
CG 5.3.3 The relevant stakeholders include the Finance Department; Research Administration (if available); and managers of clinical directorates (e.g., medical, nursing, and allied health). The purpose of these meetings is to determine the proportion of time spent by these areas supporting or undertaking research activities in the health service. These expenses will be primarily staff time related.
CG 5.3.4 Costing practitioners need to seek the following information during these meetings:
- the proportion of staff time or FTE spent supporting or undertaking direct research activities during rostered hours.
- supporting information from staff rosters or timetabling systems.
CG 5.3.5 Costing practitioners should consider the following departmental expenses that contribute to research activities:
- Time spent by supporting hospital departments such as Decision Support or Business Intelligence Units whom supply researchers with data for research purposes
- Where relevant time also spent by hospital committees which support research activities, such as Privacy and Ethics Committees.
CG 5.3.6 Costing practitioners will then obtain sign off from the relevant managers with regard to the proportion of expense to be moved to the Research final cost centre.
Step 3: Move expenses to the Research final cost centre
CG 5.3.7 Costing practitioners should move identified direct cost centres to the Research final cost centre and use the proportions derived from stakeholder discussions to move staff expenses to the Research final cost centre.
Step 4: Align overhead statistics to the Research final cost centre
CG 5.3.8 Where necessary, overhead statistics will need to be determined and applied within the costing system to enable overhead expenses to flow correctly to the Research final cost centre. For example, if FTE is the statistic used to allocate Human Resource and Payroll service expenses within the costing system, a proportion of FTE will also need to be moved to the Research final cost centre to ensure that Human Resource and Payroll service expenses flow accordingly.
Step 5: Allocate overheads to the Research final cost centre
CG 5.3.9 Broadly, costing practitioners must ensure that hospital overheads are allocated appropriately to the Research final cost centre. However, where a hospital has identifiable research related overhead expenses, such as Research Administration, these must be allocated solely to the Research final cost centre.
Step 6: Final research costed product
CG 5.3.10 When cost data is processed through the costing system, the outputs will consist of direct and overhead only for the Research product.
CG 5.3.11 Costing practitioners should ensure that any offsets or adjustments are specified as per Standard RR-R Matching Production and Cost – Reconciliation to Source Data.