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

1. Introduction
   1. 1.1 Authority, mandate and programs
   2. 1.2 Basis of presentation
2. Highlights of fiscal quarter and fiscal year-to-date results
   1. 2.1 Significant changes to budgetary authorities
   2. 2.2 Significant changes to authorities used
3. Risks and uncertainties
4. Significant changes related to operations, personnel and programs
5. Statement of authorities (unaudited)
6. Departmental budgetary expenditures by standard object (unaudited)

---

1. Introduction

This Quarterly Financial Report (QFR) has been prepared by management as required by section 65.1 of the Financial Administration Act (FAA), and in the form and manner prescribed by the Treasury Board. It should be read in conjunction with the Estimates for 2017-18. This report has not been subject to an external audit or review.

1.1 Authority, mandate and programs

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 FAA. 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.

1.2 Basis of presentation

Management prepared this quarterly report 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 for fiscal 2017-18. 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 the Government of Canada can spend monies. 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.

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.

---

2. Highlights of fiscal quarter and fiscal year-to-date results

This QFR reflects the results of the current fiscal period in relation to the 2017-18 Main Estimates, the Supplementary Estimates (A) and (B) and the operating budget carry-forward.

Sections 2.1 and 2.2 below highlight the significant items that contributed to the net increase in resources available from fiscal 2016-17 to fiscal 2017-18 and the actual expenditures as at December 31, 2016, and December 31, 2017.

The following graph provides a comparison of budgetary authorities available for the full fiscal year and budgetary expenditures by quarter for fiscal 2017-18 and fiscal 2016-17.

Description of figure

Comparison of budgetary authorities and year-to-date expenditures (thousands of dollars)

This stacked bar graph shows SSHRC’s budgetary expenditures compared to the budgetary authorities by quarter for the current and prior fiscal year.

The x-axis shows the fiscal years in question: 2017-18 and 2016-17.

The y-axis shows the amounts in thousands of dollars from zero to $900,000.

SSHRC’s budgetary authorities and expenditures in fiscal year 2017-18 were as follows:

• Budgetary authorities: $781,592
• Authorities used during the quarter ended June 30, 2017: $188,192
• Authorities used during the quarter ended September 30, 2017: $200,222
• Authorities used during the quarter ended December 31, 2017: $191,648

 

SSHRC’s budgetary authorities and expenditures in fiscal year 2016-17 were as follows:

• Budgetary authorities: $777,951
• Authorities used during the quarter ended June 30, 2016: $87,886
• Authorities used during the quarter ended September 30, 2016: $284,498
• Authorities used during the quarter ended December 31, 2016: $152,072

2.1 Significant changes to budgetary authorities

As of December 31, 2017, SSHRC’s total available authorities for fiscal 2017-18 amounted to $781.6 million. This represents an overall increase of $3.6 million (0.47 per cent) from the comparative period of the previous year. The major changes in SSHRC’s budgetary authorities between the current and previous fiscal years include:

• an increase of $0.6 million from Budget 2017 for the new Canada 150 Research Chairs Program, which was created to attract international scholars and researchers among the top 5 to 10 per cent in their fields and enhance Canada’s reputation as a global centre for innovation, science and research excellence;
• an increase of $0.4 million in support of the 2018 Centres of Excellence for Commercialization and Research program competition; and
• an increase in net transfers totalling $2.6 million from other government agencies, such as the Natural Sciences and Engineering Research Council of Canada (NSERC), in support of partnerships between Canadian colleges, universities and local companies.

2.2 Significant changes to authorities used

Year-to-date spending
The following table provides a comparison of cumulative spending by vote for the current and previous fiscal years.

Year-to-date budgetary expenditures used at quarter end (millions of dollars)	2017-18	2016-17	Variance
Vote 1–Operating expenditures
Personnel	16.0	15.8	0.2
Non-personnel	2.9	3.1	(0.2)
Vote 5–Grants and scholarships	561.1	505.6	55.5
Total budgetary expenditures	580.0	524.5	55.5

Total authorities used cumulatively during the first nine months of fiscal 2017-18 represented $580.0 million (74.2 per cent of the available authorities).

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 2017-18.

The x-axis shows the percentages from zero to 100 per cent in increments of 20 per cent.

SSHRC’s authorities based on elapsed time in fiscal year 2017-18 were as follows:

• Percentage of year elapsed: 75.0 per cent
• Combined authorities: 74.2 per cent
• Vote 5–Grants and scholarships: 74.6 per cent
• Vote 1–Net operating expenditures (including employee benefits premium): 63.7 per cent

Grants and scholarships
At the end of the third quarter of fiscal 2017-18, the grant and scholarship expenses increased by $55.5 million, compared to what was reported in the previous fiscal year. The increase is mainly due to payments made prior to December 31 in fiscal 2017-18, compared to after December 31 in fiscal 2016-17. This timing variance will be offset by year-end. In addition to the timing differences, funding for the Canada First Research Excellence Fund increased by $5.5 million this year compared to last year.

Operating expenditures
The majority of operating costs are incurred in a consistent manner throughout the fiscal year; however, the balance of expenditures, including for 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 per cent of the annual available operating authorities.

Operating expenditures for the first three quarters of fiscal 2017-18 are in line with the same period of the previous year.

Quarterly spending
The total authorities used during the third quarter of fiscal 2017-18 amounted to $191.6 million (24.5 per cent of the total available authorities; 24.6 per cent of total authorities for grant and scholarship programs; and 23.39 per cent of total authorities for operating expenditures and employee benefits).

Budgetary expenditures used during the third quarter
(millions of dollars)	2017-18	2016-17	Variance
Vote 1–Operating expenditures
Personnel	5.8	5.4	0.4
Non-personnel	1.1	1.3	(0.2)
Vote 5–Grants and scholarships	184.7	145.4	39.3
Total budgetary expenditures	191.6	152.1	39.5

Grants and scholarships
Transfer payments represent 96.2 per cent of SSHRC’s available authorities. Variations occur in transfer payment expenditures between quarters due to the nature of program cycles. During the third quarter of 2017-18, SSHRC’s transfer payment expenditures have increased by $39.3 million compared with the same quarter of the previous fiscal year. There are a number of differences in specific programs from year to year, including:

• Research Support Fund ($34.6 million increase);
• Canada Research Chairs Program ($3.4 million increase);
• Research Development Grants ($1.3 million increase); and
• small offsetting variations in other programs, such as the Canadian Initiative on Social Statistics, Centres of Excellence on Commercialization and Research, Networks of Centres of Excellence, Banting Postdoctoral Fellowships, Canada Graduate Scholarships, Aid to Small Universities, SSHRC Institutional Grants and Canada Excellence Research Chairs.

Operating expenditures
The operating expenditures are in line with those of the third quarter of the prior fiscal year.

---

3. Risks and uncertainties

Through the corporate risk identification exercise, SSHRC annually identifies and assesses corporate-level risks. Senior management is closely following the risks listed below to ensure that they are continuously mitigated and that the residual risk level is acceptable.

1. Ability to manage stakeholder relations:
   The organization might not effectively manage the expectations of diverse stakeholder groups.

   To ensure effective stakeholder engagement and to mitigate the risk of misalignment with 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 informed of developing issues.

2. Ability to manage change through information technology:
   SSHRC’s suite of legacy systems may be unable to support existing and new programs.

   An assessment of the state of SSHRC’s legacy systems was completed in December 2016. The necessary technical resources to support the legacy infrastructure and applications are in place. SSHRC has updated its business processes to better support its legacy IT systems.

3. Ability to respond to pressures from external influences in a timely manner:
   SSHRC makes use of its corporate governance structures and relies on key planning documents, such as its strategic plan, to ensure strong governance for and oversight of SSHRC’s planning and achievement of results.

---

4. Significant changes related to operations, personnel and programs

As in previous years, a number of changes relate to operations, personnel and programs. Budget 2017 included $117.6 million over eight years for approximately 25 Canada 150 Research Chairs. The program is delivered through SSHRC’s Tri-agency Institutional Programs Secretariat, in collaboration with, and on behalf of, the three federal research funding agencies—SSHRC, NSERC and the Canadian Institutes of Health Research (the agencies).

In October 2017, Ministers Kirsty Duncan and Ginette Petitpas Taylor announced the creation of the Canada Research Coordinating Committee (CRCC). The committee was created to improve the coordination efforts of the agencies and the Canada Foundation for Innovation (CFI). The CRCC is mandated to achieve greater harmonization, integration and coordination of research-related programs and policies and to address issues of common concern to the agencies and the CFI.

SSHRC continues to review, in collaboration with its stakeholders, key recommendations emerging from Canada’s Fundamental Science Review.

Approved by:

---

5. Statement of authorities (unaudited)

	Fiscal year 2017-18
(in thousands of dollars)	Total available for use for the year ending March 31, 2018*	Used during the quarter ended December 31, 2017	Year-to-date used at quarter-end
Vote 1—Net operating expenditures	27,061	6,311	17,011
Vote 5—Grants and scholarships	751,780	184,696	561,128
Budgetary statutory authorities—Contributions to the employee benefit plan	2,656	641	1,924
Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	95	-	-
Total budgetary authorities	781,592	191,648	580,063

	Fiscal year 2016-17
(in thousands of dollars)	Total available for use for the year ending March 31, 2017*	Used during the quarter ended December 31, 2016	Year-to-date used at quarter-end
Vote 1—Net operating expenditures	26,341	5,953	16,843
Vote 5—Grants and scholarships	748,646	145,433	505,568
Budgetary statutory authorities—Contributions to the employee benefit plan	2,869	679	2,037
Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	95	7	7
Total budgetary authorities	777,951	152,072	524,455

---

6. Departmental budgetary expenditures by standard object (unaudited)

Fiscal year 2017-18
(in thousands of dollars)	Planned expenditures for the year ending March 31, 2018	Expended during the quarter ended December 31, 2017	Year-to-date used at quarter-end
Expenditures
Personnel	20,318	5,781	15,999
Transportation and communications	1,838	278	570
Information	1,485	179	406
Professional and special services	3,609	544	1,407
Rentals	751	67	330
Repair and maintenance	141	22	50
Utilities, materials and supplies	106	32	58
Acquisition of machinery and equipment	1,564	24	91
Other subsidies and payments	-	25	24
Transfer payments	751,780	184,696	561,128
Total budgetary expenditures	781,592	191,648	580,063

---

Fiscal year 2016-17
(in thousands of dollars)	Planned expenditures for the year ending March 31, 2017	Expended during the quarter ended December 31, 2016	Year-to-date used at quarter-end
Expenditures
Personnel	19,470	5,364	15,792
Transportation and communications	1,562	184	543
Information	1,368	250	489
Professional and special services	4,537	714	1,559
Rentals	1,473	75	365
Repair and maintenance	109	32	58
Utilities, materials and supplies	125	6	40
Acquisition of machinery and equipment	661	14	41
Other subsidies and payments	-	-	-
Transfer payments	748,646	145,433	505,568
Total budgetary expenditures	777,951	152,072	524,455

---