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)

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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 2018-19 Main Estimates. 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 2018-19. 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.

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

This section highlights the significant items that contributed to the change in resources available for the fiscal year, as well as the actual year-to-date and quarterly expenditures compared with the previous fiscal year.

The total available authorities are comprised of the 2018-19 Main Estimates, the operating budget carry-forward and other approved items by the Treasury Board as at September 30, 2018.

The following graph provides a comparison of budgetary authorities available for the full fiscal year and budgetary expenditures by quarter for fiscal 2018-19 and fiscal 2017-18.

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: 2018-19 and 2017-18.

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

SSHRC’s budgetary authorities and expenditures in fiscal year 2018-19 were as follows:

• Budgetary authorities: $818,918
• Authorities used during the quarter ended September 30, 2018: $224,526
• Authorities used during the quarter ended June 30, 2018: $179,258

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

• Budgetary authorities: $780,427
• Authorities used during the quarter ended September 30, 2017: $200,222
• Authorities used during the quarter ended June 30, 2017: $188,192

2.1 Significant changes to budgetary authorities

As of September 30, 2018, SSHRC’s total available authorities for fiscal 2018-19 amounted to $818.9 million. This represents an overall increase of $38.5 million (4.9 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 $27.0 million from Budget 2018 to support investigator-led research;
• an increase of $5.5 million in the Canada First Research Excellence Fund, a tri-agency initiative to help institutions excel globally in research areas that create long-term economic advantages for Canada;
• an investment of $4.2 million in the Canada 150 Research Chairs, a new grant program created to attract international scholars and researchers who are among the top five to 10 per cent in their fields and enhance Canada’s reputation as a global centre for innovation, science and research excellence;
• an investment of $3.6 million from Budget 2018 for Indigenous data and research funding to support engagement and dialogue to co-develop a strategic plan that identifies new ways of doing research with Indigenous communities, including strategies to grow the capacity of Indigenous communities to conduct research and partner with the broader research community;
• an increase of $1.0 million due to the reprofiling of 2017-18 operating funds for collective bargaining; and
• an increase of $0.8 million for negotiated salary adjustments, partially offset by:
• a decrease of $3.1 million in the College and Community Social Innovation Fund to support social innovation research projects at colleges and polytechnics; and
• a decrease of $0.5 million in the Business-Led Networks of Centres of Excellence, which bring together academic and private sector experts.

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)	2018-19	2017-18	Variance
Vote 1—Operating expenditures
Personnel	13.1	10.2	2.9
Non-personnel	1.6	1.8	(0.2)
Vote 5—Grants and scholarships	389.1	376.4	12.7
Total budgetary expenditures	403.8	388.4	15.4

Total budgetary expenditures amounted to $403.8 million at the end of the second quarter of fiscal 2018-19, compared to $388.4 million reported in the same period in the previous fiscal year.

Grants and Scholarships

At the end of the second quarter of 2018-19, the grant and scholarship expenses increased by $12.7 million, compared to what was reported in the same period of the previous fiscal year. The increase in expenditures is in proportion with the increase in budget for 2018-19 in comparison to 2017-18.

Operating Expenditures

Personnel expenditures have increased by $2.9 million compared to the amount reported in the same period in the previous fiscal year. The increase is mainly due to the payment of retroactive salaries and the economic increase resulting from the renewed collective agreements approved during the second quarter of 2018-19.

Total non-personnel expenditures are in line with previous year expenditures.

Total authorities used during the first six months of fiscal 2018-19 ($403.8 million) represent 49 per cent of total available authorities ($818.9 million).

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 2018-19.

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

SSHRC’s authorities based on elapsed time in fiscal year 2018-19 were as follows:

• Percentage of year elapsed: 50%
• Combined authorities (Vote 1 and Vote 5) : 49%
• Vote 5—Grants and scholarships: 50%
• Vote 1—Net operating expenditures (including employee benefits premium): 44%

Quarterly spending

The total authorities used during the second quarter of 2018-19 amounted to $224.5 million (27.4 per cent of the total available authorities; 27.5 per cent of total authorities for grant and scholarship programs; and 25.1 per cent of total authorities for operating expenditures and employee benefits).

Budgetary expenditures used during the second quarter (millions of dollars)	2018-19	2017-18	Variance
Vote 1—Operating expenditures
Personnel	7.5	5.0	2.5
Non-personnel	0.8	0.9	(0.1)
Vote 5—Grants and scholarships	216.2	194.3	21.9
Total budgetary expenditures	224.5	200.2	24.3

Grants and scholarships

Transfer payments represent 96 per cent of SSHRC’s available authorities. Variations occur in transfer payment expenditures between quarters due to the nature of program cycles. During the second quarter of 2018-19, SSHRC’s transfer payment expenditures have increased by $21.9 million compared with the same quarter of the previous fiscal year. The increase in expenditures is in proportion with the increase in budget for 2018-19 in comparison to 2017-18.

Operating expenditures

The personnel expenditures have increased by $2.5 million compared to the same period in 2017-18. This increase is mainly due to the payment of retroactive salaries and the economic increase resulting from the renewed collective agreements approved during the second quarter of fiscal 2018-19.

The non-personnel expenditures are in line with the same period in the previous fiscal year.

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3. Risks and uncertainties

Through the corporate risk identification exercise, SSHRC annually identifies and assesses corporate level risks and develops response measures to minimize their likelihood and/or impact. Senior management closely follows the risks below to ensure they are continuously mitigated and that the residual risk level is acceptable.

Strategic risk 1- Ability to manage resources:

SSHRC’s ability to deliver results is influenced by internal and external elements and opportunities, such as the grants management system development, the integration of and support to the newly created Canada Research Coordinating Committee (CRCC) and the government’s implementation of key actions emerging from Canada’s Fundamental Science Review and the Indigenous Research Strategy. SSHRC uses its corporate governance structures and relies on key planning documents, such as the strategic plan and the Departmental Results Framework, to ensure strong oversight of SSHRC’s achievement of results. The substantial increase in SSHRC grants dollars announced in Budget 2018 creates an opportunity to demonstrate how SSHRC can efficiently deliver on crucial and fundamental themes for the benefit of a strong research ecosystem.

Strategic risk 2- Ability to manage change:

Planned activities in support of SSHRC objectives are vulnerable to the management of change. SSHRC has a number of key commitments for 2018-19, including new technologies, evolving tri-agency governance structures, new collaborations and partnerships, new program directions, new government priorities and new members of SSHRC’s governing council. To ensure successful completion and minimize unintended impacts on other projects and on operations, SSHRC continues to implement the People Strategy, the Performance Management Program, and other strategies to help ensure the appropriate development of employees in a changing work environment. In addition, SSHRC includes a change management component in most major projects.

Strategic risk 3- Ability to meet external stakeholder expectations:

Management of stakeholder relations is a critical driver of SSHRC’s success. To ensure effective management of diverse stakeholder relationships, SSHRC created the SSHRC Leaders, a group of institutional representatives. SSHRC Leaders provide an ongoing channel of communication between their institutions and SSHRC. The initiative helps all parties stay informed of developing issues, and mitigates the risk of misalignment with stakeholders’ priorities and values.

In addition, the open letter to CRCC members highlighted the need to improve and increase coordination between all players in the research ecosystem. To address this, SSHRC has participated in the preliminary analysis of business processes to identify areas for harmonization and shared systems between itself and the Canadian Institutes of Health Research (CIHR) and the Natural Sciences and Engineering Research Council of Canada (NSERC) (the agencies). A main objective of these analyses is to lead the agencies to a shared, harmonized grants management system.

Read more about SSHRC’s key strategic risks for the current year.

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4. Significant changes related to operations, personnel and programs

In Budget 2018, the Government of Canada announced historic new investments in science, technology and innovation, including more than $1.7 billion over five years to support the next generation of Canadian researchers through Canada’s granting agencies and research institutes. SSHRC funding announced in the federal budget entails:

• $215.5 million over five years ($54.8 million per year ongoing) to support fundamental research;
• $275 million over five years ($65 million per year ongoing) to a new tri-agency fund, to support international, interdisciplinary, fast-breaking and high-risk research. SSHRC will administer the fund on behalf of the agencies;
• $231.3 million over five years ($58.8 million per year ongoing) to the Research Support Fund, which SSHRC administers on behalf of the agencies, to ensure that researchers are provided with the necessary space and support at postsecondary institutions to undertake high-quality, multidisciplinary research;
• $46 million over five years for the Canada Research Chairs Program; and
• $3.8 million to develop a strategic plan that identifies new ways of doing research with Indigenous communities, including strategies to grow the capacity of Indigenous communities to conduct research and partner with the broader research community.

Over the course of the coming quarter, SSHRC will secure the required spending authorities from the Budget 2018 commitments.

Approved by:

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5. Statement of authorities (unaudited)

Fiscal year 2018-19

(in thousands of dollars)	Total available for use for the year ending March 31, 2019*	Expended during the quarter ended September 30, 2018	Year-to-date used at quarter-end
Vote 1—Net operating expenditures	30,072	7,581	13,245
Vote 5—Grants and scholarships	785,708	216,211	389,072
Budgetary statutory authorities— Contributions to the employee benefit plan	3,043	734	1,467
Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	95	-	-
Total budgetary authorities	818,918	224,526	403,784

Fiscal year 2017-18

(in thousands of dollars)	Total available for use for the year ending March 31, 2018*	Expended during the quarter ended September 30, 2017	Year-to-date used at quarter-end
Vote 1—Net operating expenditures	25,951	5,297	10,700
Vote 5—Grants and scholarships	751,815	194,284	376,432
Budgetary statutory authorities Contributions to the employee benefit plan	2,566	641	1,283
Spending of revenues pursuant to subsection 4 (2) of the Social Sciences and Humanities Research Council Act	95	-	-
Total budgetary authorities	780,427	200,222	388,415

* 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)

Fiscal year 2018-19

(in thousands of dollars)	Planned expenditures for the year ending March 31, 2019	Expended during the quarter ended September 30, 2018	Year‑to‑date used at quarter‑end
Expenditures
Personnel	23,986	7,542	13,130
Transportation and communications	1,647	131	345
Information	1,466	112	227
Professional and special services	4,414	438	692
Rentals	935	63	243
Repair and maintenance	92	20	21
Utilities, materials and supplies	91	1	33
Acquisition of machinery and equipment	545	8	21
Other subsidies and payments	34	-	-
Transfer payments	785,708	216,211	389,072
Total budgetary expenditures	818,918	224,526	403,784

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Fiscal year 2017-18

(in thousands of dollars)	Planned expenditures for the year ending March 31, 2018	Expended during the quarter ended September 30, 2017	Year-to-date used at quarter-end
Expenditures
Personnel	19,775	5,025	10,218
Transportation and communications	1,538	156	292
Information	1,353	77	227
Professional and special services	3,383	564	863
Rentals	752	61	262
Repair and maintenance	141	9	28
Utilities, materials and supplies	106	(6)	26
Acquisition of machinery and equipment	1,564	52	67
Other subsidies and payments	-	-	-
Transfer payments	751,815	194,284	376,432
Total budgetary expenditures	780,427	200,222	388,415

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