Social Sciences and Humanities Research Council
Unaudited Future-Oriented Statement of Operations

For the year ending March 31, 2018

(in thousands of dollars)	Estimated Results 2016-17	Planned Results 2017-18
Expenses
Indirect Costs	368,663	369,638
Insight	183,718	180,524
Talent	173,577	174,905
Connection	30,211	29,623
Internal Services	18,956	17,674
Canada First Research Excellence Fund	7,993	13,543
Total Expenses	783,118	785,907
Revenues
Miscellaneous revenues	95	95
Total Revenues	95	95
Net cost of operations	783,023	785,812

Notes to the Unaudited Future-Oriented Statement of Operations

1.   Authority and Objectives

The Social Sciences and Humanities Research Council (SSHRC) was established in 1977 by the Social Sciences and Humanities Research Council Act, and is a departmental corporation named in Schedule II to the Financial Administration Act. SSHRC’s purpose is to promote and assist research and scholarship in the social sciences and humanities. SSHRC delivers its objectives under six program activities, which are described in the Departmental Plan.

SSHRC’s grants, scholarships and operating expenditures are funded by annual, voted budgetary authorities. Employee benefits are funded by statutory authorities.

2.   Methodology and Significant Assumptions

The unaudited future-oriented statement of operations has been prepared on the basis of government priorities, and the plans of SSHRC as described in the Departmental Plan.

The information in the forecast results for fiscal year 2016-17 is based on actual results as at December 31, 2016, and on forecasts for the remainder of the fiscal year. Forecasts have also been made for the planned results for the 2017-18 fiscal year.

The main assumptions underlying the forecasts are as follows:

1. SSHRC's activities will remain substantially the same as in the previous year.
2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.

These assumptions are adopted as at December 31, 2016.

3.   Variations and Changes to the Forecast Financial Information

Although every attempt has been made to forecast final results for the remainder of 2016-17 and for 2017-18, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this unaudited future-oriented statement of operations, SSHRC has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

Factors that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include the following:

1. the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
2. the implementation of new collective agreements;
3. other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, SSHRC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

4.   Summary of Significant Accounting Policies

The unaudited future-oriented statement of operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2016-17 which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

1. Expenses

Grants and scholarships (transfer payments) are recognized in the year in which the entitlement of the recipient has been established, when the recipient has met the eligibility criteria, the commitment has been approved, and the payment is due before the end of the fiscal year.

Operating expenses are recorded when goods are received or services are rendered, on an accrual basis. Vacation pay and compensatory leave are accrued as the benefits are earned under the respective terms of employment. Services provided without charge by other government departments and agencies for accommodation and the employer’s contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and amortization of tangible capital assets which is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset Class	Amortization Period
Informatics equipment, including standard software issued on desktop computers	3 years
Purchased network software and in-house developed software	5 years
Other equipment	5 years
Furniture	7 years
Motor vehicles	7 years
Leasehold improvements	Lesser of their useful life or the term of the lease

 

2. Revenues

Revenues are accounted for in the period in which the related transactions or the event that gives rise to the revenues occurred. Miscellaneous revenues (respendable revenues) are revenues provided under a revolving fund or a net-voting authority and are netted against the costs of operations.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which related expenses are incurred.

5.   Parliamentary Authorities

SSHRC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to SSHRC differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the unaudited future-oriented statement of operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, SSHRC has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a. Reconciliation of Net Cost of Operations to Requested Authorities:

	Forcast results 2016-17	Planned results 2017-18
Net cost of operations before government funding and transfers Adjustments for items affecting net cost of operations but not affecting authorities:	783,023	785,812
Revenues	95	95
Amortization of tangible capital assets	(986)	(950)
Services provided without charge by other government departments	(4,377)	(4,419)
Increase in vacation pay and compensatory leave	(47)	(31)
Increase in employee future benefits	(5)	(17)
Parental and other benefits paid by SSHRC	(319)	(319)
Total items affecting net cost of operations but not affecting authorities	(5,639)	(5,641)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets	213	256
Increase in prepaid expenses	(4)	-
Total items not affecting net cost of operations but affecting authorities	209	256
Requested authorities	777,593	780,427

 

b. Authorities Requested

	Forcast results 2016-17	Planned results 2017-18
Authorities requested
Vote 05 – Grants & Scholarships	749,471	751,815
Vote 01 – Operating Expenditures	26,341	24,768
Statutory authorities
Contributions to employee benefits plan	2,609	2,716
Spending of revenues pursuant to subsection 4(2) of the Social Sciences and Humanities Research Council Act	225	95
Less: Authorities available (for future years) from previous years	(1,183)	1,183
Forecast authorities available	777,593	780,427

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and Supply Bills and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.