Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs
- Introduction
- Highlights of Fiscal Quarter
- Risks and Uncertainties
- Significant Changes Related to Operations, Personnel and Programs
- Budget 2012 Implementation
- Statement of Authorities (unaudited) for the Quarter Ended December 31, 2014
- Departmental Budgetary Expenditures by Standard Object (unaudited) for the Quarter ended December 31, 2014
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 2014-15.
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 2014-15 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 $716.5 million, $340.6 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 December 31, 2014, SSHRC’s total available authorities for 2014-15 amounted to $716.5 million. To date, for 2014-15, total authorities have increased by $22.6 million (3.3 %) over the previous year, with $21.5 million coming from an increase in SSHRC’s grant and scholarship programs and $1.1 million from an increase in the authorities for operating expenditures and employee benefits. The net changes between the current and previous fiscal year comprise the following elements:
In this quarter (year to date), total available authorities incorporate the elements of the 2013‑14 Supplementary Estimates (B) (SEB) in addition to the first quarter’s Supplementary Estimates (A) (SEA). The SEB is the second, and most significant, of three opportunities to approve changes in SSHRC’s authority levels for the current fiscal year (other than transfers from Treasury Board votes). The vast majority of these changed elements are the result of previous federal budget announcements, while the balance relates to technical adjustments from Treasury Board and transfers between departments and agencies for specific initiatives. The future and ongoing impacts of SEB elements will be included in SSHRC’s 2014‑15 Main Estimates. For the ongoing elements from previous federal budget announcements or transfers between departments and agencies, only the net difference in the level of funding between the two fiscal years is presented in the explanation below. The net changes, amounting to the $1.7 million increase in total available authorities between the current and previous fiscal year, are mainly comprised of the following elements:
- an increase of $9 million to the Research Support Fund, which ensures federally funded research projects are conducted in world-class facilities with the best equipment and administrative support available, reinforcing research investments made by NSERC, SSHRC and CIHR;
- an increase of $7.0 million to support advanced research in the social sciences and humanities (Budget 2014);
- an increase of $3.5 million in the Centres of Excellence for Commercialization and Research program, which develops effective and efficient ways to identify commercialization opportunities (Budget 2007);
- an increase of $2.7 million to support social innovation research projects, connecting the talent, facilities and capabilities of Canada’s colleges and polytechnics with the research needs of local community organizations. (Budget 2014); and
- an increase of $0.4 million in the Business-Led Networks of Centres of Excellence program, which creates links between innovative businesses and Canada’s best researchers, helping to create and sustain knowledge-based jobs.
Authorities Used in the Third Quarter
This QFR reflects the results of the current fiscal period in relation to the 2014-15 Main Estimates, Supplementary Estimates (A) (SEA), for which full supply was released by Parliament on June 20, 2014, and Supplementary Estimates (B) (SEB) which was approved December 16th, 2014.
The total authorities used during the third quarter of 2014-15 amounted to $172.2 million (24% of the total available authorities; 24% of the total authorities for grant and scholarship programs; and 22% for operating expenditures and employee benefits). This represents a $21.8-million decrease from the same quarter in the previous fiscal year. This decrease is principally related to grant and scholarship programs ($21.8 million). For the grant and scholarship programs, the decrease is a result of payment timing differences between the first, second and third 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 multi-year 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 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 nine months of the 2014-15 fiscal year represented $520.2 million (73% of the available authorities). This represents $3.8 million less 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 the fiscal year decreased to 72.9% in 2014-15 from 75.9% in the previous fiscal year. The cumulative authorities used this fiscal year for operating expenditures and the employee benefit plan increased by $0.3 million over last fiscal year. SSHRC has spent 64.5% of its authorities for operating expenditures and the employee benefit plan in the current fiscal year, which is consistent with the previous year.
Description of figure
SSHRC Authorities based on elapsed time, percentage of the year elapsed, combined authorities, Vote 5— Grants and Scholarships, Vote 1—Net Operating Expenditures (including EBP).
This bar graph shows SSHRC’s spending trend, in percentage of elapsed time in fiscal year 2014‑15.
The x‑axis shows the percentages from 0 per cent to 100 per cent.
SSHRC’s Authorities based on elapsed time in fiscal year 2014‑15 was as follows:
- Percentage of year elapsed: 75 per cent
- Combined: 73 per cent
- Vote 5‑Grants and Scholarships: 73 per cent
- Vote 1‑Net Operating expenditures (including EBP): 64 per cent
Statement of Departmental Budgetary Expenditures by Standard Object
Variation in Amounts Available for Use in 2014‑15
As described in the Available Authorities section, SSHRC’s total parliamentary authorities have increased by $22.6 million to date in 2014-15 over last year. The bulk of this increase is attributed to the increase in authorities for grants and scholarships ($21.5 million).
Transfer Payment Expenditures (Grants and Scholarships)
Third 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 third quarter of 2014-15, SSHRC’s transfer payment expenditures decreased by $21.8 million over the same quarter of the previous fiscal year. The main factors for this decrease include:
- a decrease of $23.6 million for the Research Support Fund due to earlier spending in the first quarter of 2014-15;
- an increase of $5.0 million for the Insight Grants funding opportunity due to new grants paid in this period; and
- a decrease of $3.2 million in Insight Development Grants due to timing differences in payments compared with last year. These timing differences are expected to be offset by year end.
Year-to-Date Grant and Scholarship Expenditures
At the end of the third quarter, SSHRC spent $4.1 million (0.8%) less than what was spent at the same point in the previous fiscal year. Changes in spending from the previous year include:
- an increase of $11.4 million in Insight Grants due to new grants paid in this period;
- an increase of $6.0 million in Partnership Grants due to the ramp-up of the program;
- a decrease of $14.7 million in various grant and scholarship programs, including $10.6 million for Research Grants, $1.1 million for Strategic Research Clusters, $1.5 million for Major Collaborative Research Initiatives Program, and $1.5 million for Community-University Research Alliances.; and
- a decrease of $6.8 million in various grant and scholarship programs due to timing differences in payments compared with last year. This includes $2.9 million in Joseph-Armand Bombardier Canada Graduate Scholarships Program Master’s Scholarships, $2.4 million in Insight Development Grants, and $1.5 million in Vanier Canada Graduate Scholarships. These timing differences are expected to offset by year-end.
Description of figure
SSHRC Grant and Scholarship Expenditures Trend, thired quarter, 2013‑14 and 2014‑15
This bar graph shows SSHRC’s Grant and Scholarship Expenditures trend, in millions of dollars, for fiscal years 2013‑14 and 2014‑15, for the third quarter.
The x‑axis shows one quarter: Q3.
The y‑axis shows dollar values. The scale begins at zero and goes to 200 million dollars, in increments of 50 million.
SSHRC’s actual spending by quarter for 2014‑15, was as follows:
SSHRC’s actual spending by quarter for 2014‑15, was as follows:
Third 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 2014-15). The personnel expenditures for the third quarter of 2014-15 are generally in line with the previous year’s third quarter spending.
Third 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 2014-15 are generally consistent with last year. Increased expenditures during the first, second and third quarters of this fiscal year of ($325,000) are related to the payment under the standard object “Other subsidies and payments” due to one-time transition payment for implementing salary payment in arrears by the Government of Canada.
Description of figure
SSHRC Operating Expenditures Trend, third quarter, 2013‑14 and 2014‑15
This line graph shows SSHRC’s operating spending trend, in millions of dollars, for fiscal years 2013‑14 and 2014‑15, for the third quarter.
The x‑axis shows one quarters: Q3.
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 2013‑14, 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
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 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. Another significant influence involved the continuing implementation of government-wide operating budget constraint measures and the government’s efforts to return to a balanced budget, details of which are described in the section below. Federal Budget 2014, tabled in March 2014, included funding announcements describing additional program dimensions that will be implemented by SSHRC, following Treasury Board and Parliament approvals, over the course of the 2014-15 fiscal year.
As of August 31, 2014, former President Dr. Chad Gaffield (appointed to SSHRC in 2006), has stepped down to resume his position as a professor at the University of Ottawa. Dr. Jack Mintz, vice-president and Chair of Council, will assume the presidency on an interim basis until a new president is appointed.
5. Budget 2012 Implementation
This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to: refocus government and programs; make it easier for Canadians and businesses to deal with their government; and modernize administrative processes.
Through Canada’s Economic Action Plan, SSHRC had achieved savings of approximately $14 million as of 2013-14. Over Budget 2012, Budget 2013 and Budget 2014, the Government of Canada reinvested $21 million annually in SSHRC’s grant and scholarship programs to support world-leading research through industry-academic partnership initiatives (including research related to labour market participation of persons with disabilities), and to increase the level of advanced research.
SSHRC has examined all of its activities and investments with the intention of streamlining operations and ensuring maximum efficiencies.
In realizing operating budget savings, a number of measures are being implemented to generate greater efficiency and effectiveness, including an enhanced use of technological advancements, such as teleconferencing and virtual meetings for adjudication and merit-review processes. SSHRC has also redesigned its program architecture, which has resulted in a simpler framework for grant funding and management. A rigorous and cohesive approach to priority setting, project planning and training further helps SSHRC meet its goals.
Expenditures in the third quarter of 2014-15 are lower than in the same period of the previous fiscal year. The difference between the two fiscal years is due mainly to a timing difference in grant payments. SSHRC’s operating expenditures are stable compared to the previous fiscal year.
There was no incremental funding provided to SSHRC to implement the above cost-saving measures.
There are no specific financial risks or uncertainties related to these savings.
Ted Hewitt, Ph.D.
Chief Operating Officer,
SSHRC
Ottawa, Canada
February 26, 2015
Alfred Tsang, CPA, CMA
Vice-President and Chief
Financial Officer, SSHRC
6. Statement of Authorities for the Quarter Ended December 31, 2014
Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended December 31, 2014
Statement of Authorities (unaudited)
Fiscal year 2014-15
| (In thousands of dollars) |
Total available for use for the year ending March 31, 2015* |
Used during the quarter ended December 31, 2014/th>
| Year-to-date used at quarter-end |
| Vote 1—Operating Expenditures |
24,659 |
5,302 |
15,646 |
| Less: Revenues netted against expenditures |
75 |
- |
- |
| Vote 1—Net Operating Expenditures |
24,584 |
5,302 |
15,646 |
| Vote 5—Grants and Scholarships |
689,333 |
166,239 |
502,640 |
| Budgetary Statutory Authorities—Employee Benefit Plan |
2,586 |
627 |
1,882 |
|
Total Budgetary Authorities
|
716,503 |
172,168 |
520,169 |
Fiscal year 2013-14
| (In thousands of dollars) |
Total available for use for the year ending March 31, 2014* |
Used during the quarter ended Deember 31, 2013 |
Year-to-date used at quarter-end |
| Vote 1—Operating Expenditures |
23,898 |
5,248 |
15,276 |
| Less: Revenues netted against expenditures |
395 |
- |
- |
| Vote 1—Net Operating Expenditures |
23,503 |
5,248 |
15,276 |
| Vote 5—Grants and Scholarships |
667,791 |
188,088 |
506,709 |
| Budgetary Statutory Authorities—Employee Benefit Plan |
2,630 |
653 |
1,958 |
| Total Budgetary Authorities |
693,924 |
193,989 |
523,943 |
* Includes only authorities available for use and granted by Parliament at quarter-end.
7. Departmental Budgetary Expenditures by Standard Object (unaudited) for the Quarter ended December 31, 2014
Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended December 31, 2014
Fiscal Year 2014-15
| (In thousands of dollars) |
Planned expenditures for the year ending March 31, 2015 |
Expended during the quarter ended December 31, 2014 |
Year‑to‑date used at quarter‑end |
| Expenditures: |
| Personnel |
18,202 |
4,996 |
14,503 |
| Transportation and Communications |
1,695 |
128 |
396 |
| Information |
909 |
102 |
310 |
| Professional and Special Services |
3,317 |
380 |
1,102 |
| Rentals |
924 |
260 |
473 |
| Repair and Maintenance |
42 |
2 |
7 |
| Utilities, Materials and Supplies |
122 |
22 |
50 |
| Acquisition of Machinery and Equipment |
2,034 |
67 |
95 |
| Other subsidies and payments |
- |
(28) |
592 |
| Transfer Payments |
689,333 |
166,239 |
502,641 |
| Total Gross Budgetary Expenditures |
716,578 |
172,168 |
520,169 |
| Less revenues netted against expenditures: Vote-Netted Revenues |
75 |
- |
- |
| Total Net Budgetary Expenditures |
716,503 |
172,168 |
520,169 |
Fiscal year 2013-14
| (In thousands of dollars) |
Planned expenditures for the year ending March 31, 2014 |
Expended during the quarter ended December 31, 2013 |
Year‑to‑date used at quarter‑end |
| Expenditures: |
| Personnel |
17,730 |
4,999 |
14,534 |
| Transportation and Communications |
1,583 |
140 |
434 |
| Information |
412 |
60 |
125 |
| Professional and Special Services |
4,713 |
600 |
1,654 |
| Rentals |
194 |
89 |
357 |
| Repair and Maintenance |
586 |
(17) |
5 |
| Utilities, Materials and Supplies |
181 |
25 |
70 |
| Acquisition of Machinery and Equipment |
1,129 |
5 |
55 |
| Other subsidies and payments |
- |
- |
- |
| Transfer Payments |
667,791 |
188,088 |
506,709 |
| Total Gross Budgetary Expenditures |
694,319 |
193,989 |
523,943 |
| Less revenues netted against expenditures: Vote-Netted Revenues |
395 |
- |
- |
| Total Net Budgetary Expenditures |
693,924 |
193,989 |
523,943 |