Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs
1. Introduction
The Social Sciences and Humanities Research Council of Canada (SSHRC) was established in 1977 by the Social Sciences and Humanities Research Council Act, and is a departmental corporation named in Schedule II of the Financial Administration Act. SSHRC is a funding agency that promotes and supports postsecondary research and training in the social sciences and humanities to enhance the economic, social and cultural development of Canada, its communities and regions. Social sciences and humanities research builds knowledge about people in the past and present, with a view toward creating a better future.
Further information on the SSHRC mandate and program activities can be found in Part II of the Main Estimates.
This Quarterly Financial Report (QFR) has been prepared by management as required by section 65.1 of the Financial Administration Act, and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates for 2015-16.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes SSHRC’s spending authorities granted by Parliament and those used by the agency, consistent with the Main Estimates and Supplementary Estimates for the 2015-16 fiscal year. This quarterly report has been prepared using a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before monies can be spent by the Government of Canada. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.
When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.
SSHRC uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
This quarterly report has not been subject to an external audit or review.
2. Highlights of Fiscal Quarter
Statement of Authorities
Available Authorities
SSHRC manages total authorities of $718.1 million, $341.4 million of which corresponds to the tri-agency Research Support Fund on behalf of the other two federal research granting agencies, the Natural Sciences and Engineering Research Council (NSERC) and the Canadian Institutes of Health Research.
As of September 30, 2015, SSHRC’s total available authorities for 2015-16 amounted to $718.1 million. To date, for 2015-16, total authorities have increased by $25.2 million (3.5%) over the previous year, with $24.3 million coming from an increase in SSHRC’s grant and scholarship programs, and $0.9 million from an increase in the authorities for operating expenditures, statutory funding authority for the respending of revenue, and employee benefits. The net changes between the current and previous fiscal year comprise the following elements:
- an increase of $9 million in the Research Support Fund to ensure that federally funded research projects are conducted in world-class facilities with the best equipment and administrative support available (Budget 2014);
- an increase of $7 million in the Grants and Scholarships program to support advanced research in the social sciences and humanities (Budget 2014);
- an increase of $5 million for a pilot initiative to support social innovation research projects at colleges and polytechnics (Budget 2014);
- an increase of $4 million for the Centres of Excellence for Commercialization and Research program—a tri-agency initiative to create a more effective and efficient way to identify commercialization opportunities;
- an increase of $0.3 million following the end of agreements with other government departments (the International Development Research Centre for a climate change initiative, and the Canadian Nuclear Safety Commission for scholarships);
- an increase of $0.2 million in statutory authority for the spending of revenues pursuant to subsection 4.2 of the Social Sciences and Humanities Research Council Act;
- an increase of $0.1 million for the Business-Led Networks of Centres of Excellence program due to an increase in the proportion of social sciences and humanities-related research across the Network;
- a decrease of $0.2 million in operating funds due to the transfer—to the Canadian Institutes of Health Research—of the administration of the Secretariat on Responsible Conduct of Research; and
- other variances of less than $0.2 million, including the reduction in the Council’s operating budget from government cost-effectiveness initiatives; these items include the transfer to the Canada School of Public Service, the Web Renewal Initiative and Back-Office Transformation Initiatives.
Authorities Used in the Second Quarter
This QFR reflects the results of the current fiscal period in relation to the 2015-16 Main Estimates and Supplementary Estimates (A) (SEA), for which full supply was approved by Parliament on June 19, 2015.
The total authorities used during the second quarter of 2015-16 amounted to $203.3 million (28% of the total available authorities; 28% of the total authorities for grant and scholarship programs; and 21% for operating expenditures and employee benefits). This represents a $12.0 million increase from the same quarter in the previous fiscal year. This increase is principally related to grant and scholarship programs ($11.8 million). For the grant and scholarship programs, the increase is mostly due to payment timing differences between the first and second quarters of the comparative fiscal years, which are expected to offset by year-end.
Grant and scholarship payments vary between periods due to competition cycles and the results of merit-reviewed funding opportunities and multiyear award profiles. Operating expenditures cover personnel and other operating expenses required to support the delivery of grant and scholarship programs. Expenditures related to the employee benefit plan are accounted for separately in statutory authorities. Although the majority of personnel expenditures and other operating costs are incurred in a consistent manner throughout the fiscal year, the balance of expenditures, including temporary employees hired for the peak competition season and travel costs for peer reviewers, are tied to the program cycle and are demand-driven. As a large proportion of program competitions occur in the last quarter of the fiscal year, the expenditures in each of the first three quarters are typically less than 25% of the annual available operating authorities.
Authorities Used Year-to-Date
Total authorities used cumulatively during the first six months of the 2015-16 fiscal year represented $359.8 million (50% of the available authorities). This represents $13.5 million more than the previous fiscal year. The main factor for this overall increase is the timing of payments for grants and scholarships compared with the previous fiscal year. The proportion of cumulative grants and scholarships authorities used in 2015-16 increased to 50.3%, from 50.2% in 2014-15. This fiscal year, the cumulative authorities used for operating expenditures and the employee benefit plan increased by $0.4 million over the previous fiscal year. The main factor for this increase is the statutory and ramp-up salary increase. SSHRC has spent 44.1% of its authorities for operating expenditures and the employee benefit plan in the current fiscal year, compared with 44.3% in 2014-15.
Description of figure
Authorities used based on Elapsed Time
This bar graph shows SSHRC’s spending trend, in percentage of elapsed time in fiscal year 2015-16.
The x-axis shows the percentages from 0% to 100%.
SSHRC’s authorities based on elapsed time in fiscal year 2015-16 were as follows:
- Percentage of year elapsed: 50 per cent
- Combined authorities: 50 per cent
- Vote 5-grants and scholarships: 50 per cent
- Vote 1-net operating expenditures (including Employee Benefit Plan): 44 per cent
Statement of Departmental Budgetary Expenditures by Standard Object
Second Quarter Grant and Scholarship Expenditures
Transfer payments represent over 96% of SSHRC’s total available authorities. Variations occur in transfer payment expenditures between quarters due to the nature of the funding opportunity cycles. During the second quarter of 2015-16, SSHRC’s transfer payment expenditures increased by $11.8 million over the same quarter of the previous fiscal year. The main factors for this increase include:
- a timing difference on payments resulted in an increase of $17.4 million over the previous year for the following programs: Research Support Fund and Networks of Centres of Excellence Program, as well as a decrease of $5.9 million over the previous year for the following programs: Joseph-Armand Bombardier Canada Graduate Scholarships—Master's Scholarships and SSHRC Institutional Grants; these timing differences are expected to be offset by year-end;
- an increase of $2.2 million for Partnership Grants due to new grants paid in this period, as well as a ramp-up of the program; and
- a decrease of $1.9 million due to the sunsetting of the Standard Research Grants Program, the last payment will occur in 2017-18.
Year-to-Date Grant and Scholarship Expenditures
At the end of the second quarter, SSHRC spent $13.1 million (3.7%) more than what was spent at the same point in the previous fiscal year. The main factors for the increase over the previous year include:
- an increase of $7.0 million for Partnership Grants due to new grants paid in this period, as well as a ramp-up of the program;
- an increase of $5.5 million for Networks of Centres of Excellence Program due to a payment timing difference compared to the second quarter of the previous fiscal year; the timing difference is expected to be offset by year-end;
- an increase of $4.5 million for Insight Grants due to a ramp-up of the program;
- a decrease of $2.5 million due to the sunsetting of the Standard Research Grants Program (the last payment will occur in 2017-18); and
- a decrease of $1.4 million for the Canada Research Chairs Program due to a lower amount of active chairs compared to the second quarter of the previous fiscal year.
Grant and Scholarship Expenditures Trend
Description of figure
Grants and Scholarships Expenditures Trend
This bar graph shows SSHRC’s grants and scholarships spending trend, in millions of dollars, for the second quarters of fiscal years 2014-15 and 2015-16.
The x-axis shows second quarter: Q2.
The y-axis shows dollar values. The scale begins at zero and goes to 250 million dollars, in increments of 50 million.
SSHRC’s actual spending by quarter for 2015-16 was as follows:
- Q2: $197.3 million dollars
SSHRC’s actual spending by quarter for 2014-15 was as follows:
- Q2: $185.5 million dollars
Second Quarter and Year-to-Date Personnel Expenditures
Personnel expenditures in support of program delivery account for the largest proportion of SSHRC’s planned operating expenditures (approximately 67% of available operating authorities and planned operating expenditures for 2015-16). The year-to-date increase of $639,000 is the result of long-term vacancies being filled. The decrease of $608,000 in "Other subsidies and payments" is due to a 2014-15 one-time transition payment for implementing salary payment in arrears by the Government of Canada.
Second Quarter and Year-to-Date Non-Personnel Operating Expenditures
Non-personnel operating expenditures include all other operating costs related to the support of program delivery. A significant proportion of these costs relate to funding opportunity competitions that take place predominantly during the final quarter of the fiscal year. Total non-personnel expenditures to date in 2015-16 are generally consistent with last year.
Operating Expenditures Trend
Description of figure
Operating Expenditures Trend
This bar graph shows SSHRC’s operating spending trend, in millions of dollars, for the second quarters of fiscal years 2014-15 and 2015-16.
The x-axis shows second quarter: Q2.
The y-axis shows dollar values. The scale begins at zero and goes to 6 million dollars, in increments of 1 million.
SSHRC’s actual spending by quarter for 2015-16, was as follows:
SSHRC’s actual spending by quarter for 2014-15, was as follows:
3. Risks and Uncertainties
Funding and Program Delivery Risk Factors
Through the corporate risk identification exercise, the risks that have a potential financial impact or that deal with financial sustainability have been assessed. The impact on SSHRC and the planned mitigation strategies related to these risks are discussed below.
External Risk Factors
SSHRC is funded through annual parliamentary spending authorities and statutory authorities for program transfer payments (grant and scholarship programs) and for its supporting operating expenditures. As a result, its program activities and operations are impacted by any changes to funding approved through Parliament. Accordingly, program delivery can be affected by factors such as the economic climate, technological and scientific development, and evolving government priorities, which impact approved resource levels (total available authorities).
Research and innovation are part of global trends; therefore, participation in SSHRC programs is influenced not only by the Canadian context, but also by initiatives and opportunities worldwide. Formal communications and external relation strategies are developed by SSHRC to ensure that stakeholder relationships and expectations are managed effectively.
There is also the risk that SSHRC fails to achieve its mandate and strategic outcomes. To mitigate this risk, an integrated planning process is firmly in place. This process serves as the foundation for SSHRC to plan all aspects of its business in an integrated manner and to align priorities and resources accordingly.
Internal Risk Factors
In order to ensure stakeholder engagement and to mitigate the risk of misrepresenting our stakeholders’ priorities and values, a group of institution representatives, SSHRC Leaders, was created. SSHRC Leaders provide an ongoing channel of communication between their institutions and SSHRC, helping all parties stay abreast of developing issues. This open dialogue permits the relay to universities of information on new policy and program developments. For their part, SSHRC Leaders are able to gather information and ideas from the university community, feeding into the development of SSHRC policies and programs.
SSHRC is a knowledge-based organization that relies on maintaining its talented and committed workforce to deliver its programs. To retain its valuable human resources and their corporate memory, SSHRC has developed a People Strategy that outlines the organization’s commitments and action plan for developing talent and for building and sustaining a thriving and successful workplace and work culture. SSHRC is challenged by the ability to hire the skilled resources needed to successfully achieve the transformation and realignment agendas to meet tomorrow’s needs. Potential consequences could include workload management issues and succession planning challenges.
SSHRC is transforming its business in order to adapt more efficiently to internal changes and improve external client service.
Thus far, SSHRC has achieved operational efficiencies through economies of scale by the shared administrative service arrangements with the Natural Sciences and Engineering Research Council of Canada; corporate-wide prioritization and harmonization or reduction of activities; internal reallocations; and a focus on streamlining and generating efficiencies wherever possible. An established budgetary process with regular in-year budget reviews and formal reallocations for emerging priorities approved by senior management supports this endeavour. SSHRC is also undertaking a revision of its operating and grant delivery systems and processes to generate further efficiencies and future savings.
SSHRC is a lean agency; total operating expenses account for less than 4% of its annual disbursement. This efficiency is in part due to the continued and substantial contribution of the thousands of volunteer peer reviewers who provide immense in-kind benefit to SSHRC’s grant review operations. In addition, as noted above, SSHRC is pursuing business transformation to improve efficiency measures and to enhance resource decision-making.
4. Significant Changes Related to Operations, Personnel and Programs
SSHRC has undertaken a program architecture renewal initiative to create a more flexible and effective system of program application and assessment, allowing it to maximize the contributions of research and training funds for Canada’s economic prosperity and quality of life. The new program architecture has placed an emphasis on research excellence, fostering partnerships and reporting on results. This has resulted in greater overall program coherence, with flexible programming, a more responsive competition cycle, and an improved and simplified interface for applicants. The implementation of the new program architecture allows for the consolidation of existing and new funding opportunities under three umbrella programs—Talent, Insight and Connection—as well as enhanced service delivery and process re-engineering. A new program architecture is being developed and will be implemented as of April 1, 2016.
A number of important changes, in comparison with the previous fiscal year, relate to operations, personnel and programs. These include the impacts generated by SSHRC’s previously increased available authorities, which resulted in expanded partnership program dimensions. In Budget 2014, the Government of Canada launched the Canada First Research Excellence Fund; results for the inaugural competition were announced in July 2015. Budget 2015, tabled in April 2015, included funding announcements describing additional program dimensions that will be implemented by SSHRC, following Treasury Board and Parliament approvals, over the course of the 2016-17 fiscal year.
Approved by:
Original signed by:
Ted Hewitt, PhD
President, SSHRC
Ottawa, Canada
November 25, 2015
Original signed by:
Alfred Tsang, CPA, CMA
Vice-President and Chief
Financial Officer, SSHRC
5. Statement of Authorities (unaudited) for the Quarter Ended September 30, 2015
Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended September 30, 2015
Statement of Authorities (unaudited)
Fiscal Year 2015-16
| (In thousands of dollars) |
Total available for use for the year ending March 31, 2016* |
Used during the quarter ended September, 2015 |
Year-to-date used at quarter-end |
| Vote 1—Operating Expenditures |
24,254 |
5,284 |
10,649 |
| Less: Revenues netted against expenditures |
- |
- |
- |
| Vote 1—Net Operating Expenditures |
24,254 |
5,284 |
10,649 |
| Vote 5—Grants and Scholarships |
690,999 |
197,330 |
347,864 |
| Budgetary Statutory Authorities—Contributions to the employee benefit plan |
2,609 |
652 |
1,305 |
| Budgetary Statutory Authorities—Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act |
225 |
- |
- |
| Total Budgetary Authorities |
718,087 |
203,266 |
359,818 |
* Includes only Authorities available for use and granted by Parliament at quarter-end.
F
iscal Year 2014-15
| (In thousands of dollars) |
Total available for use for the year ending March 31, 2015* |
Used during the quarter ended September 30, 2014 |
Year-to-date used at quarter-end |
| Vote 1—Operating Expenditures |
23,758 |
5,097 |
10,344 |
| Less: Revenues netted against expenditures |
75 |
- |
- |
| Vote 1—Net Operating Expenditures |
23,683 |
5,097 |
10,344 |
| Vote 5—Grants and Scholarships |
666,664 |
185,543 |
334,720 |
| Budgetary Statutory Authorities—Contributions to the employee benefit plan |
2,509 |
627 |
1,255 |
| Budgetary Statutory Authorities—Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act |
- |
- |
- |
| Total Budgetary Authorities |
692,856 |
191,267 |
346,319 |
* Includes only Authorities available for use and granted by Parliament at quarter-end.
6. Departmental Budgetary Expenditures by Standard Object (Unaudited) for the Quarter Ended September 30, 2015
Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended September 30, 2015
Fiscal Year 2015-16
| (In thousands of dollars) |
Planned expenditures for the year ending March 31, 2016 |
Expended during the quarter ended September 30, 2015 |
Year‑to‑date used at quarter‑end |
| Expenditures |
| Personnel |
18,187 |
4,928 |
10,146 |
| Transportation and communications |
2,350 |
185 |
373 |
| Information |
520 |
223 |
320 |
| Professional and special services |
3,854 |
502 |
790 |
| Rentals |
1,433 |
54 |
243 |
| Repair and maintenance |
129 |
6 |
6 |
| Utilities, materials and supplies |
146 |
9 |
27 |
| Acquisition of machinery and equipment |
469 |
29 |
38 |
| Other subsidies and payments |
- |
- |
11 |
| Transfer payments |
690,999 |
197,330 |
347,864 |
| Total Gross Budgetary Expenditures |
718,087 |
203,266 |
359,818 |
| Less revenues netted against expenditures: Netted revenue |
- |
- |
- |
| Total Net Budgetary Expenditures |
718,087 |
203,266 |
359,818 |
Fiscal year 2014-15
| (In thousands of dollars) |
Planned expenditures for the year ending March 31, 2015 |
Expended during the quarter ended September 30, 2014 |
Year‑to‑date used at quarter‑end |
| Expenditures |
| Personnel |
17,718 |
4,708 |
9,507 |
| Transportation and communications |
1,602 |
159 |
269 |
| Information |
859 |
166 |
208 |
| Professional and special services |
3,138 |
484 |
722 |
| Rentals |
873 |
166 |
212 |
| Repair and maintenance |
40 |
5 |
5 |
| Utilities, materials and supplies |
115 |
4 |
28 |
| Acquisition of machinery and equipment |
1,922 |
25 |
28 |
| Other subsidies and payments |
- |
7 |
620 |
| Transfer payments |
666,664 |
185,543 |
334,720 |
| Total Gross Budgetary Expenditures |
692,931 |
191,267 |
346,319 |
| Less revenues netted against expenditures: Netted revenue |
75 |
- |
- |
| Total Net Budgetary Expenditures |
692,856 |
191,267 |
346,319 |