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

For the year ending March 31

(in thousands of dollars)	Estimated Results 2014-15	Planned Results 2015-16
Expenses
Indirect Costs	340,587	341,919
Talent	173,938	173,526
Insight	153,798	156,149
Connection	31,921	30,911
Internal Services	19,743	18,969
Total Expenses	719,987	721,474
Revenues
Miscellaneous revenues	-	225
Revenues earned on behalf of Government	-	-
Total Revenues	-	225
Net cost of operations	719,987	721,249

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 five programs, which are described in the Report on Plans and Priorities.

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

2.   Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of government priorities, and the plans of SSHRC as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2014-15 is based on actual results as at December 31, 2014, and on forecasts for the remainder of the fiscal year. Forecasts have also been made for the planned results for the 2015-16 fiscal year.

The main assumptions underlying the forecasts are as follows:

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

These assumptions are adopted as at December 31, 2014.

3.   Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2014-15 and for 2015-16, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

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

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 amounts of acquisitions and disposals of tangible capital assets may affect gains/losses and amortization expense.
2. Implementation of new collective agreements.
3. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is tabled, SSHRC will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4.   Summary of Significant Accounting Policies

The future-oriented statement of operations has been prepared using the government’s accounting policies in effect for the 2014-15 fiscal year as of December 31, 2014. These accounting policies, stated below, 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. Parliamentary authorities

SSHRC is financed by the government through parliamentary authorities. Financial reporting of authorities provided to SSHRC do not parallel financial reporting according to generally accepted accounting principles, since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Unaudited Future-Oriented Statement of Operations are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

2. Net cash provided by government

SSHRC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by SSHRC is deposited to the CRF, and all cash disbursements made by SSHRC are paid from the CRF. The net cash provided by government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the government.

3. Amounts due from the Consolidated Revenue Fund

Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that SSHRC is entitled to draw from the CRF without further parliamentary expenditure authorities to discharge its liabilities.

4. Expenses

Expenses are recorded on an accrual basis.

Grants and scholarships 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 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, audit services and the employer’s contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

5. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the government. SSHRC’s contributions to the Plan are charged to expenses in the year incurred and represent SSHRC’s total obligation to the Plan. SSHRC’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the government, the Plan’s sponsor.
   2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the government as a whole.

6. Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. SSHRC does not capitalize intangibles.

Amortization of tangible capital assets 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

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

5.   Parliamentary Authorities

SSHRC receives its funding through annual parliamentary authorities. 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 results 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:

(in thousands of dollars)	Estimated 2014-15	Planned 2015-16
Net cost of operations	719,987	721,249
Adjustments for items affecting net cost of operations but not affecting authorities:
Revenues	-	225
Amortization of tangible capital assets	(168)	(127)
Services provided without charge by other government departments	(4,193)	(4,229)
Increase in vacation pay and compensatory leave	(9)	(9)
Increase in employee future benefits	(127)	(2)
Total items affecting net cost of operations but not affecting authorities	715,490	717,107
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets	1,674	1,200
Decrease in prepaid expenses	38	-
Total items not affecting net cost of operations but affecting authorities	1,712	1,200
Requested authorities	717,202	718,307

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

b. Authorities Requested

(in thousands of dollars)	Estimated 2014-15	Planned 2015-16
Authorities requested
Vote 05 – Grants & Scholarships	689,298	690,999
Vote 01 – Operating Expenditures	25,313	24,474
Statutory authorities
Contributions to employee benefits plan	2,591	2,609
Spending of revenues pursuant to subsection 4(2) of the Social Sciences and Humanities Research Council Act	-	225
Forecast authorities available	717,202	718,307