Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs

1. Introduction
2. Highlights of Fiscal Quarter
3. Risks and Uncertainties
4. Significant Changes Related to Operations, Personnel and Programs
5. Statement of Authorities (Unaudited) for the Quarter Ended June 30, 2015
6. Departmental Budgetary Expenditures by Standard Object (unaudited) for the Quarter ended June 30, 2015

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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.

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2. Highlights of Fiscal Quarter

Statement of Authorities

Available Authorities

SSHRC manages total authorities of $717.1 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 June 30, 2015, SSHRC’s total available authorities for 2015-16 amounted to $717.1 million. To date, for 2015-16, total authorities have increased by $25.3 million (3.7%) over the previous year, with $24.3 million coming from an increase in SSHRC’s grant and scholarship programs and $1 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 means of identifying 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;
• Other variances of less than $0.1 million include 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 the Back-Office Transformation Initiative.

Authorities Used in the First 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 first quarter of 2015-16 amounted to $156.6 million (22% of the total available authorities; 22% of the total authorities for grant and scholarship programs; and 23% for operating expenditures and employee benefits). This represents a $1.5-million increase from the same quarter in the previous fiscal year. This increase is principally related to grant and scholarship programs ($1.4 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 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 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.

Description of figure

Authorities used 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 2015-16.

The x-axis shows the percentages from 0% to 100%.

SSHRC’s Authorities based on Elapsed Time in fiscal year 2015-16 was as follows:

• Percentage of year elapsed: 25 per cent
• Combined authorities: 22 per cent
• Vote 5—Grants and Scholarships
• Vote 1-Net Operating expenditures (including EBP): 23 percent

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Statement of Departmental Budgetary Expenditures by Standard Object

Variation in Amounts Available for Use in 2015‑16

As described in the Available Authorities section, SSHRC’s total parliamentary authorities have increased by $25.3 million to date in 2015-16 over last year. The bulk of this increase is attributed to the increase in authorities for grants and scholarships ($24.3 million).

Transfer Payment Expenditures (Grants and Scholarships)

First 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 first quarter of 2015-16, SSHRC’s transfer payment expenditures increased by $1.4 million over the same quarter of the previous fiscal year. The main factors for this increase include:

• a decrease of $13.2 million for the Research Support Fund due to fewer institutions being paid in the first quarter, as compared to last fiscal year;
• an increase of $4.8 million for Partnership Grants due to new grants paid in this period, as well as a ramp-up of the program;
• an increase of $4.4 million for Insight Grants due to a ramp-up of the program;
• an increase of $2.6 million for SSHRC Institutional Grants due to a payment timing difference compared to the first quarter of the previous fiscal year. This timing difference is expected to be offset by year-end;
• an increase of $2.5 million for the Joseph-Armand Bombardier Canada Graduate Scholarships Program - Master's Scholarships due to a payment timing difference compared to the first quarter of the previous fiscal year. This timing difference is expected to be offset by year-end; and
• an increase of $0.3 million for Connection Grants due to a payment timing difference compared to the first quarter of the previous fiscal year. This timing difference is expected to be offset by year-end.

Description of figure

Grants and Scholarships Expenditures Trend

This line graph shows SSHRC’s Grants and Scholarships spending trend, in millions of dollars, for fiscal years 2014-15 and 2015-16, for the first quarter.

The x‑axis shows first quarter: Q1.

The y‑axis shows dollar values. The scale begins at zero and goes to 160 million dollars, in increments of 20 million.

SSHRC’s actual spending by quarter for 2015-16, was as follows:

• Q1: $150.5 million dollars

SSHRC’s actual spending by quarter for 2014-15, was as follows:

• Q1: $149.2 million dollars

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First 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 70% of available operating authorities and planned operating expenditures for 2015-16). The personnel expenditures for the first quarter of 2015-16 are generally in line with the previous year’s first quarter spending. The decrease of $601,000, under the standard object "Other subsidies and payments," is due to a prior year one-time transition payment for implementing salary payments in arrears by the Government of Canada.

First 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. Increased expenditures ($142,000) for rentals during the first quarter of this fiscal year, related to the timing of payments for rentals not occurring in the comparative period of the previous fiscal year.

Description of figure

Operating Expenditures Trend, third quarter, 2014‑15 and 2015‑16

This line graph shows SSHRC’s Operating spending trend, in millions of dollars, for fiscal years 2014-15 and 2015-16, for the first quarter.

The x‑axis shows first quarter: Q1.

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:

• Q1: $5.4 million dollars

SSHRC’s actual spending by quarter for 2014-15, was as follows:

• Q1: $5.2 million dollars

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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.

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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 first inaugural competition are expected by 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.

Expenditures in the first quarter of 2015-16 are higher 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.

Approved by:

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5. Statement of Authorities for the Quarter Ended June 30, 2015

Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended June 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 June 30, 2015	Year-to-date used at quarter-end
Vote 1—Operating Expenditures	23,229	5,365	5,365
Less: Revenues netted against expenditures	-	-	-
Vote 1—Net Operating Expenditures	23,229	5,365	5,365
Vote 5—Grants and Scholarships	690,999	150,534	150,534
Budgetary Statutory Authorities—Employee Benefit Plan	2,609	652	652
Budgetary Statutory Authorities—Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	225	-	-
Total Budgetary Authorities	717,062	156,551	156,551

Fiscal year 2014-15

(In thousands of dollars)	Total available for use for the year ending March 31, 2015*	Used during the quarter ended June 30, 2014	Year-to-date used at quarter-end
Vote 1—Operating Expenditures	22,652	5,246	5,246
Less: Revenues netted against expenditures	75	-	-
Vote 1—Net Operating Expenditures	22,577	5,246	5,246
Vote 5—Grants and Scholarships	666,664	149,177	149,177
Budgetary Statutory Authorities—Employee Benefit Plan	2,509	627	627
Budgetary Statutory Authorities—Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	-	-	-
Total Budgetary Authorities	691,750	155,050	155,050

* Includes only authorities available for use and granted by Parliament at quarter-end.

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6. Departmental Budgetary Expenditures by Standard Object (unaudited) for the Quarter ended June 30, 2015

Social Sciences and Humanities Research Council of Canada
Quarterly Financial Report
For the quarter ended June 30, 2015
Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2015-16

(In thousands of dollars)	Planned expenditures for the year ending March 31, 2016	Expended during the quarter ended June 30, 2015	Year‑to‑date used at quarter‑end
Expenditures
Personnel	18,187	5,218	5,218
Transportation and Communications	2,080	189	189
Information	460	97	97
Professional and Special Services	3,410	287	287
Rentals	1,268	189	189
Repair and Maintenance	114	1	1
Utilities, Materials and Supplies	129	17	17
Acquisition of Machinery and Equipment	415	8	8
Other subsidies and payments	-	11	11
Transfer Payments	690,999	150,534	150,534
Total Gross Budgetary Expenditures	717,062	156,551	156,551
Less revenues netted against expenditures: Vote-Netted Revenues	-	-	-
Total Net Budgetary Expenditures	717,062	156,551	156,551

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Fiscal year 2014-15

(In thousands of dollars)	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended June 30, 2014	Year‑to‑date used at quarter‑end
Expenditures
Personnel	17,718	4,798	4,798
Transportation and Communications	1,395	110	110
Information	748	42	42
Professional and Special Services	2,731	238	238
Rentals	760	46	46
Repair and Maintenance	35	0	0
Utilities, Materials and Supplies	100	24	24
Acquisition of Machinery and Equipment	1,674	3	3
Other subsidies and payments	-	612	612
Transfer Payments	666,664	149,177	149,177
Total Gross Budgetary Expenditures	691,825	155,050	155,050
Less revenues netted against expenditures: Vote-Netted Revenues	75	-	-
Total Net Budgetary Expenditures	691,750	155,050	155,050

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