Quarterly Financial Report for the Quarter Ended June 30, 2017

Table of contents

  1. Introduction
  2. Highlights of fiscal quarter and fiscal year to date (YTD) results
  3. Risks and uncertainties
  4. Significant changes in relation to operations, personnel and programs
  5. Statement of Authorities (unaudited)
  6. Departmental budgetary expenditures by Standard Object (unaudited)

1. Introduction

This quarterly financial report 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. It should be read in conjunction with the 2017-18 Main Estimates, and Supplementary Estimates A. It has not been subject to an external audit or review nor has it been subject to the approval of the Audit Committee.

1.1 Authority, mandate and programs

The Canadian Institutes of Health Research (CIHR) is the Government of Canada's health research funding agency. It was created in June 2000 by the Canadian Institutes of Health Research Act with a mandate “to excel, according to internationally accepted standards of scientific excellence, in the creation of new knowledge and its translation into improved health for Canadians, more effective health services and products and a strengthened Canadian health care system.”

CIHR invests in high quality health research and health research personnel to help create and apply new knowledge that can improve health outcomes for Canadians, lead to innovative products and services that improve Canada's health care system, and create high quality employment and commercial opportunities. CIHR's Health Research Roadmap II: Capturing Innovation to Produce Better Health and Health Care for Canadians presents CIHR’s vision to capture excellence and accelerate health innovation via three strategic directions, including:

  1. Promoting excellence, creativity and breadth in health research and knowledge translation;
  2. Mobilizing health research for transformation and impact; and
  3. Achieving organizational excellence.

Further details on CIHR’s mandate and programs can be found in Part II of the Main Estimates and the Department Plan.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes CIHR’s spending authorities granted by Parliament and those used by CIHR, consistent with the Main Estimate and Supplementary Estimates A for the 2017-18 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. 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.

CIHR uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities provided in the combination of the Main Estimates, Supplementary Estimates A and Supplementary Estimates B for fiscal year 2016‑17, as well as budget adjustments approved by Treasury Board up to December 31, 2016.

2.1 Financial Highlights – Statement of Authorities (Refer to Section 5)

As of June 30, 2017, total authorities available for use for CIHR have increased by $60.0 million (5.8%) compared to June 30, 2016 as shown in the tables below. The increase to CIHR’s total authorities available is due to:

Total authorities used as at June 30, 2017 have also increased by $10.4 million (5.7%) as compared to the prior fiscal year due mainly to the grant payments towards the newly created programs mentioned above. CIHR has used 17.8% (17.9% in 2016-17) of its available authorities through the first quarter, which is consistent with its annual spending pattern.

Table 2.1.1 – Changes to annual authorities available and authorities used during the first quarter by vote
($ thousands)

2017-18 2016-17 Variance
Annual Authorities available Cumulative Authorities used % used Annual Authorities available Cumulative Authorities used % used (1) vs (3) (2) vs (4)
(1) (2) (3) (4)
Vote 1 - Operating Expenditures 52,633 12,707 24.1%           47,309 10,755 22.7% 11.3% 18.1%
Vote 5 - Grants   1,027,149 179,275 17.5%   972,339 170,838 17.6% 5.6% 4.9%
Statutory Authorities 5,819 1,455 25.0% 5,972 1,493 25.0% (2.6%) (2.5%)
Total 1,085,601 193,437 17.8% 1,025,620 183,086 17.9% 5.8% 5.7%

Vote 1 – Operating Expenditures

Total authorities available for use for Vote 1 - Operating expenditures have increased by $5.3 million (11.3%) as at June 30, 2017 as compared to the prior fiscal year as a result of:

Operating expenditures authorities used during the first quarter have increased by $2.0 million (18.1%) as compared to the prior fiscal year due to increased Personnel and Transportation and communications expenditures. These increases were directly related to the results of the July 2016 Working Meeting held with the health research community.

Vote 5 – Grants

Authorities available for use for Vote 5 - Grants have increased by approximately $54.8 million (5.6%) in the first quarter as compared to the prior fiscal year quarter, as a result of:

Grant authorities used during the first quarter of 2017-18 have increased by $8.4 million (4.9%) as compared to the prior fiscal year quarter due to increased grant payments resulting from the increased authorities available for use as well as timing differences with respect to the disbursement of funds to health researchers. The percentage of grant authorities used is consistent with the prior year (17.5% and 17.6%, respectively) as grants are typically paid out in bi-monthly installments starting in May of each fiscal year.

Overall spending as at June 30, 2017 is consistent with management expectations.

Statutory Authorities

Budgetary statutory authorities (representing CIHR’s contribution to employee benefit plans) available for use decreased marginally year over year by $0.2 million (2.6%).  The decrease to CIHR’s statutory authorities available is due to:

Actual spending for statutory authorities in the first quarter of 2017-18 is 25.0% of the total available authorities for use for the year which is as expected given these expenditures are distributed equally throughout the fiscal year.

2.2 Financial Highlights – Statement of Departmental Budgetary Expenditures by Standard Object (Refer to Section 6)

As of June 30, 2017, total authorities available for use by CIHR have increased by $60.0 million (5.8%) as compared to the prior fiscal year due to increased funding received. Total authorities used as at June 30, 2017 have increased by $10.4 million (5.7%) as compared to the prior fiscal year. These increases are reflected in Table 2.2.1 (where expenditure types are re-grouped into three categories: Personnel, Other Operating Expenditures and Grants) for further analysis.

Table 2.2.1 – Changes to annual authorities available and authorities used during the first quarter by expenditure type
($ thousands)

2017-18 2016-17 Variance
Annual Authorities available Q1 Authorities used % used Annual Authorities available Q1 Authorities used % used (1) vs (3) (2) vs (4)
(1) (2) (3) (4)
Personnel 42,880 11,457 26.7% 40,694 10,853 26.7% 5.4% 5.6%
Other operating expenditures 15,572 2,705 17.4% 12,587 1,395 11.1% 23.7% 93.9%
Grants        1,027,149 179,275 17.5% 972,339 170,838 17.6% 5.6% 4.9%
Total        1,085,601        193,437 17.8% 1,025,620  183,086 17.9% 5.8% 5.7%

Personnel and other operating expenditures

Authorities available for Personnel Expenditures for the period ended June 30, 2017 have increased by $2.2 million (5.4%) as compared to the prior year.  Authorities available for Other Operating Expenditures have also increased by $3.0 million (23.7%). These increases are due to:

Personnel authorities used year to date increased by $0.6 million (5.6%) as compared to the prior fiscal year. In 2016-17, CIHR unfroze all vacant positions as a result of operational requirements and created positions to deliver the programs and initiatives funded from both Budget 2015 and Budget 2016, as well as positions to implement the recommendations stemming from the July 2016 Working Meeting to discuss CIHR peer review processes with the research community. As positions were unfrozen or created in 2016-17, CIHR staffed some positions in the latter part of the fiscal year, and anticipates these positions to be fully staffed in 2017-18. The percentage of authorities used for Personnel Expenditures in the first quarter (26.7%) is reasonable for this type of expenditure and is comparable to the prior fiscal year (26.7%).

Other Operating Expenditures used in the first quarter increased by $1.3 million (93.9%) as compared to the prior fiscal quarter. The increase is mainly the result of greater Transportation and communications expenditures of $0.9 million due to the increased costs of Non-Public Servant travel for Peer Review meetings.

Grants

Authorities available for the period ended June 30, 2017 have increased by $54.8 million (5.6%) over the prior year due primarily to additional health research funding discussed in section 2.1.1. Authorities used during the quarter ended June 30, 2017 have also increased by 4.9% due to increased grant payments resulting from the increased authorities available for use, as well as timing differences with respect to the disbursement of grant funds. The percentage of grant authorities used in the first quarter of 2017-18 (17.5%) is consistent with authorities used as at June 30th of the prior fiscal year (17.6%).

2.3 Other Non-Financial Highlights

Other non-financial highlights for the first quarter of 2017-18 include:

3. Risks and uncertainties

CIHR is funded through voted parliamentary spending authorities and statutory authorities for operating expenditures and transfer payments. As a result, its operations are impacted by any changes to funding approved through Parliament. Therefore, delivering programs and services may depend on several risk factors such as economic fluctuations, technological and scientific development, evolving government priorities, and central agency or government-wide initiatives.

Over the past year, progress was made in implementing the strategic directions set out in CIHR’s strategic plan, Health Research Roadmap II, to contribute to a sustainable Canadian health research environment and to ensure the reliability, consistency, fairness and efficiency of the competition and review processes. As part of the implementation of the reforms of Open Programs, and peer review, CIHR finalized the integration of its legacy open programs into CIHR’s new Foundation and Project Grants competitions. In addition, with the College of Reviewers, CIHR has created a national resource that facilitates peer review across Canada, in all areas of health research.

In July 2016, CIHR held a Working Meeting with the Research Community to discuss changes to CIHR’s program design and peer review processes. A Peer Review Working Group was subsequently established to further discuss the recommendations emanating from this meeting. CIHR is committed to working with the community on these recommendations, and updates on their adoption and implementations are regularly communicated via CIHR’s website and other communication platforms. Implementing these recommendations will ensure that CIHR is able to recruit well-trained, knowledgeable and varied peer review experts.

In September 2016, CIHR launched an International Peer Review Expert Panel to examine the design and adjudication processes of CIHR’s investigator initiated programs, in relation to the CIHR mandate and the changing health sciences landscape, international funding agency practices, and the available literature on peer review. The Panel’s final report was tabled with CIHR’s Governing Council and made public in February 2017, CIHR is reviewing and addressing the report’s recommendations in 2017-18.

To build a healthier future for First Nations, Inuit and Metis peoples, CIHR is committed to addressing the ongoing, long-standing gap in health status between Indigenous and non-Indigenous peoples in Canada through its health research programs and policies. CIHR will support the health and wellness of Indigenous peoples through contributions to evidence-informed and culturally-sensitive health and social policies and interventions. Ultimately, our goal is to improve Indigenous health outcomes in Canada, as detailed in CIHR’s Indigenous Health Research Action Plan published in November 2016.

Given this organizational context, CIHR has identified three key risks that could impact our ability to deliver on our strategic plan and meet research community expectations. In light of these risks, CIHR has set out organizational priorities for 2017-18 that will not only mitigate these risks but ensure alignment with government of Canada priorities.

CIHR is committed to a disciplined, integrated risk management process in its daily operations. A Corporate Risk Profile (CRP) is updated twice annually and provides a proactive response to manage and monitor risks to ensure CIHR’s ability to operationalize processes, achieve outcomes and deliver on its mandate. CIHR is managing several risks that have been identified in its CRP, including:

CIHR Management has implemented several mitigations to address and monitor the associated risks, including:

CIHR monitors the Corporate Risk Profile at least twice a year to facilitate reporting on our progress by managing and mitigating those priority risks.

4. Significant changes in relation to operations, personnel and programs

Effective March 31, 2017, Dr. Alain Beaudet, President, retired from CIHR.

Effective March 31, 2017, Dr. Jane Aubin, Chief Scientific Officer and Vice-President, Research, Knowledge Translation and Ethics retired from CIHR.

On March 31, 2017, the Honourable Jane Philpott, Minister of Health, announced that Dr. Roderick McInnes was appointed as the Acting President of CIHR.

Effective April 3, 2017, Michel Perron was appointed as the Executive Vice-President, External Affairs and Business Development (formerly the Vice-President, External Affairs and Business Development).

Effective April 3, 2017, Jeff Latimer was appointed as the Acting Vice-President, Competition Management (formerly the Acting Associate Vice-President, Program Operations).

Effective May 1, 2017, Dr. Anne Martin-Matthews was appointed as the Acting Vice-President, Research, Knowledge, Translation, and Ethics.

 

Approval by Senior Officials

Approved by: 

[Original signed by]

Roderick R. McInnes, C.M., O.Ont., PhD, FRSC     
Acting President 

[Original signed by] 

David Peckham, CIA, MSc   
Acting Chief Financial Officer
Acting Vice-President, Resource Planning and Management

Ottawa, Canada
August 29, 2017

5. Statement of Authorities (unaudited)

For the quarter ended June 30, 2017

Fiscal year 2017-2018 Fiscal year 2016-2017
(in thousands of dollars) Total available for use for the year ending
March 31, 2018Footnote 1
Used during the quarter ended
June 30, 2017
Year to date used at quarter-end Total available for use for the year ended
March 31, 2017Footnote 1
Used during the quarter ended
June 30, 2016
Year to date used at quarter-end
Vote 1 – Operating expenditures 52,633 12,707 12,707 47,309 10,755 10,755
Vote 5 - Grants 1,027,149 179,275 179,275 972,339 170,838 170,838

Budgetary statutory authorities – Contributions to employee benefit plans

5,819 1,455 1,455 5,972 1,493 1,493
Total budgetary authorities 1,085,601 193,437 193,437 1,025,620 183,086 183,086

6. Departmental budgetary expenditures by Standard Object (unaudited)

For the quarter ended June 30, 2017

Fiscal year 2016-2017 Fiscal year 2016-2017
(in thousands of dollars) Planned expenditures for the year ending
March 31, 20181
Expended during the
quarter ended June 30, 2017
Year to date used at quarter-end Planned expenditures for the year ending
March 31, 20171
Expended during the
quarter ended June 30, 2016
Year to date used at quarter-end
Personnel 42,880 11,457 11,457 40,694 10,853 10,853
Transportation and communications 3,965 1,362 1,362 3,736 432 432
Information 491 87 87 810 64 64
Professional and special services 8,851 522 522 5,795 422 422
Rentals 1,135 355 355 1,636 182 182
Repair and maintenance 52 - - 53 3 3
Utilities, materials and supplies 129 3 3 158 6 6
Acquisition of machinery and equipment 949 238 238 399 267 267
Transfer payments 1,027,149 179,275 179,275 972,339 170,838 170,838
Other subsidies and payments - 138 138 - 19 19
Total budgetary expenditures 1,085,601 193,437 193,437 1,025,620 183,086 183,086
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