CIHR@15 – Canadian Institutes of Health Research Annual Report 2014‑15

Auditors’ Report and Financial Statements

Canadian Institutes of Health Research
Statement of Management Responsibility Including Internal Control over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2015, and all information contained in these statements rests with the management of the Canadian Institutes of Health Research (CIHR). These financial statements have been prepared by management using the Government’s accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of CIHR’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in CIHR’s Departmental Performance Report, will be consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout CIHR and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2015 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of CIHR’s system of internal control is reviewed by the work of internal audit staff under the auspices of the Chief Audit Executive, who conducts periodic assessments of different areas of CIHR’s operations, and reviewed by CIHR’s Audit Committee, which oversees management’s responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the President of CIHR and its Governing Council.

Ernst & Young LLP, the independent auditor for CIHR, has expressed an opinion on the fair presentation of the financial statements of CIHR which does not include an audit opinion on the annual assessment of the effectiveness of CIHR’s internal controls over financial reporting.

Approved by:

Alain Beaudet, MD, PhD
President

Thérèse Roy, CPA, CA (Quebec)
Chief Financial Officer
Vice-President, Resource Planning and Management

Ottawa, Canada
June 26, 2015

Independent Auditors’ Report

To the Finance and Audit Committee of the Governing Council Canadian Institutes of Health Research

We have audited the accompanying financial statements of the Canadian Institutes of Health Research, which comprise the statement of financial position as at March 31, 2015, and the statements of operations and departmental net financial position, of change in departmental net debt and of cash flows for the year then ended, a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements in accordance with Canadian generally accepted auditing standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Canadian Institutes of Health Research as at March 31, 2015, and the results of its operations, changes in net debt, and cash flows for the year then ended in accordance with Canadian public sector accounting practices.

Ernst & Young LLP
Chartered Professional Accounts
Licensed Public Accountants

Ottawa, Canada
June 26, 2015

Canadian Institutes of Health Research
Statement of Financial Position
As at March 31

(in thousands of dollars)

2015 2014

Contractual obligations (note 9)
Contingent liabilities (note 10)

The accompanying notes form an integral part of these financial statements.

Liabilities
Accounts payable and accrued liabilities (note 4) $5,147 $4,105
Vacation pay and compensatory leave 2,086 2,000
Deferred revenue (note 5) 6,520 6,760
Employee future benefits (note 6) 1,264 1,530
Total liabilities 15,017 14,395
Financial assets
Due from the Consolidated Revenue Fund $11,667 $10,857
Accounts receivable and advances (note 7) 463 339
Total financial assets 12,130 11,196
Departmental Net Debt $2,887 $3,199
Non-financial assets
Prepaid expenses $487 $427
Tangible capital assets (note 8) 552 569
Total non-financial assets 1,039 996
Departmental net financial position $(1,848) $(2,203)

Approved by:

Alain Beaudet, MD, PhD
President

Thérèse Roy, CPA, CA (Quebec)
Chief Financial Officer
Vice-President, Resource Planning and Management

Ottawa, Canada
June 26, 2015

Canadian Institutes of Health Research
Statement of Operations and Departmental Net Financial Position
For the Year Ended March 31

(in thousands of dollars)

2015 2015 2014
Planned Results
(note 2)

Segmented information (note 13)

The accompanying notes form an integral part of these financial statements.

Expenses
Investigator-Initiated Health Research $737,868 $728,321 $703,894
Priority-Driven Health Research 258,019 295,831 302,042
Internal Services 3,480 3,565 2,948
Total expenses 999,367 1,027,717 1,008,884
Revenues
Investigator-Initiated Health Research $7,239 $356 $-
Priority-Driven Health Research 2,461 7,262 6,854
Total revenues 9,700 7,618 6,854
Net cost of operations before government funding and transfers $989,667 $1,020,099 $1,002,030
Government funding and transfers
Net cash provided by Government $982,739 $1,014,350 $990,260
Change in due from the Consolidated Revenue Fund 916 810 2,636
Services provided without charge by other governments (note 11) 6,443 6,670 6,589
Transfer of the transition payments for implementing salary payments in arrears (note 12) - (1,376) -
Net cost of operations after government funding and transfers (431) (355) 2,545
Departmental net financial position – Beginning of year (1,689) (2,203) 342
Departmental net financial position – End of year $(1,258) $(1,848) $(2,203)

Canadian Institutes of Health Research
Statement of Change in Departmental Net Debt
For the Year Ended March 31

(in thousands of dollars)

2015 2015 2014
Planned Results
(note 2)

The accompanying notes form an integral part of these financial statements.

Net Cost of Operations after government funding $(431) $(355) $2,545
Change due to tangible capital assets
Acquisition of tangible capital assets 987 214 141
Amortization of tangible capital assets (473) (218) (2,063)
Loss on disposal of capital assets - (13) -
Total change due to tangible capital assets 514 (17) (1,922)
Change due to prepaid expenses - 60 (179)
Net increase (decrease) in departmental net debt 83 (312) 444
Departmental net debt – Beginning of year 3,070 3,199 2,755
Departmental net debt – End of year $3,153 $2,887 $3,199

Canadian Institutes of Health Research
Statement of Cash Flows
For the Year Ended March 31

(in thousands of dollars)

2015 2014

The accompanying notes form an integral part of these financial statements.

Operating activities
Net cost of operations before government funding and transfers $1,020,099 $1,002,030
Non-cash items:
Amortization of tangible capital assets (218) (2,063)
Services provided without charge by other government departments (note 11) (6,670) (6,589)
Transition payments for implementing salary payments in arrears (note 12) 1,376 -
Loss on disposal of capital assets (13) -
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 124 (769)
Increase (decrease) in prepaid expenses 60 (179)
(Increase) decrease in accounts payable and accrued liabilities (1,042) 163
(Increase) decrease in vacation pay and compensatory leave (86) 84
Decrease (increase) in deferred revenue 240 (2,799)
Decrease in future employee benefits 266 241
Cash used in operating activities 1,014,136 990,119
Capital activities
Acquisitions of tangible capital assets 214 141
Cash used in capital activities 214 141
Net cash provided by Government of Canada $1,014,350 $990,260

Canadian Institutes of Health Research
Notes to the Financial Statements
For the Year Ended March 31, 2015

1. Authority and Objectives

The Canadian Institutes of Health Research (CIHR) was established in June 2000 under the Canadian Institutes of Health Research Act, replacing the former Medical Research Council of Canada. It is listed in Schedule II to the Financial Administration Act as a departmental corporation.

CIHR’s objective is to excel, according to international standards of scientific excellence, in the creation of new knowledge, and its translation into improved health, more effective health services and products, and a strengthened Canadian health care system. CIHR’s strategic outcome is as follows: Canada is a world leader in the creation, dissemination and application of health research knowledge. The strategic outcome is achieved based on twoprograms. The first program is Investigator-Initiated Health Research, to develop and support a well-trained base of world-class health researchers and trainees conducting research across all aspects of health, including biomedical research, clinical research, research respecting health systems, health services, the health of populations, societal and cultural dimensions of health and environmental influences on health, and other research as required. The goal of the Investigator-Initiated Health Research Program is to advance health knowledge and to apply this knowledge in order to improve health systems and/or health outcomes. The second program is Priority-Driven Health Research, which provides funding to researchers for emergent and targeted research that responds to the changing health needs and priorities of Canadians across all aspects of health, including biomedical research, clinical research, research respecting health systems, health services, the health of populations, societal and cultural dimensions of health and environmental influences on health, and other research as required. The goal of the Priority-Driven Health Research program is to advance health knowledge and its application, in specific areas of research identified by CIHR in consultation with other government departments, partners and stakeholders, in order to improve health systems and/or health outcomes in these priority areas.

CIHR is led by a President who is the Chairperson of a Governing Council of not more than eighteen members appointed by the Governor in Council. The Governing Council sets overall strategic direction, goals and policies and oversees programming, resource allocation, ethics, finances, planning and accountability.

CIHR has thirteen Institutes that focus on identifying the research needs and priorities for specific health areas, or for specific populations, then developing strategic initiatives to address those needs. Each Institute is led by a Scientific Director who is guided by an Institute Advisory Board, which strives to include representation of the public, researcher communities, research funders, health professionals, health policy specialists and other users of research results.

CIHR’s grants, awards and operating expenditures are funded by budgetary authorities. Employee benefits are funded by statutory authorities.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government’s accounting policies stated below, 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. Parliamentary authorities – CIHR is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to CIHR does not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented Statement of Operations included in the 2014-15 Report on Plans and Priorities (Unaudited).

  2. Net cash provided by Government – CIHR operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by CIHR is deposited to the CRF and all cash disbursements made by CIHR 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 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 CIHR is entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. Revenues

    • Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.
    • Funds that have been received are recorded as deferred revenue, provided CIHR has an obligation to other parties for the provision of goods, services, or the use of assets in the future.
    • Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
  5. Expenses – Expenses are recorded on the accrual basis:

    • Grants and awards (transfer payments) are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
    • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
    • Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
  6. Refunds of previous years' expenses– These amounts include the return of grants and awards funds to CIHR in the current fiscal year for expenses incurred in previous fiscal years due to cancellations, refunds of previous years' expenses related to goods or services, and adjustments of previous years' accounts payable. These refunds and adjustments are presented against the related expenses in the financial statements but are recorded as revenue in accordance with accounting policies and therefore are excluded when determining current year authorities used.

  7. Employee future benefits

    • Pension benefits: Eligible employees participate in the Public Service Pension Plan (the Plan), a multiemployer defined benefit pension plan administered by the Government. CIHR’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. CIHR’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 of Canada, as the Plan’s sponsor.

    • Severance benefits – CIHR executives and non-represented employees: Prior to October 2, 2011, CIHR executives and non-represented employees were entitled to severance benefits under labour contracts or conditions of employment for voluntary and involuntary departures. These benefits were accrued as employees rendered the services necessary to earn them. Effective October 2, 2011, CIHR non-represented employees and executives were no longer eligible to accrue severance benefits for voluntary departures (e.g. resignation and retirement). Employees were provided with three options in relation to the severance termination provisions, such as the immediate payout of the accumulated weeks of severance at their current rate of pay, retain the accumulated weeks of severance with a payout upon termination of employment with CIHR or retirement at their exit rate of pay, or a combination thereof. These changes have been reflected in the calculation of the outstanding severance benefit obligation. Severance benefits continue to accrue for involuntary departures, however, benefits payable would be reduced by the severance termination option exercised for service up to and including October 1, 2011, should an involuntary departure occur.

  8. Accounts receivable and advances are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for receivables and advances where recovery is considered uncertain.

  9. Contingent liabilities – Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

  10. Tangible capital assets – All tangible capital assets having an individual initial cost of $5,000 or more are recorded at their acquisition cost.

    Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:

    Asset class Amortization period
    Informatics hardware 3–5 years
    Informatics software 3–10 years
    Office equipment 10 years
    Vehicles 5 years

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

  11. Measurement uncertainty – The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Authorities

CIHR receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, CIHR 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:

  1. Reconciliation of net cost of operations to current year authorities used

    (in thousands of dollars)

    2015 2014
    Net cost of operations before government funding and transfers $1,020,099 $1,002,030
    Adjustments for items affecting net cost of operations but not affecting authorities:
    Amortization of tangible capital assets (218) (2,063)
    Services provided without charge by other government department (6,670) (6,589)
    Increase (decrease) in vacation pay and compensatory leave (86) 84
    Decrease in employee future benefits 266 241
    Refunds of previous years' grants and awards 1,897 4,105
    Bad debt expense (22) -
    Loss on disposal of capital assets (13) -
    Other adjustments 376 202
    (4,470) (4,020)
    Adjustments for items not affecting net cost of operations but affecting authorities:
    Acquisitions of tangible capital assets 214 141
    Transition payments for implementing salary payments in arrears 1,376 -
    Increase (decrease) in prepaid expenses 60 (179)
    1,650 (38)
    Current year authorities used $1,017,279 $997,972
  2. Authorities provided and used

    (in thousands of dollars)

    2015 2014
    Authorities provided:
    Vote 1 - Operating expenditures $51,991 $50,750
    Vote 5 - Grants 960,201 944,402
    Statutory amounts 5,843 5,887
    Less:
    Authorities available for future years (400) (2,318)
    Lapsed: Operating - (302)
    Lapsed: Grants (356) (447)
    Current year authorities used $1,017,279 $997,972

4. Accounts Payable and Accrued Liabilities

The following table presents details of CIHR's accounts payable and accrued liabilities:

(in thousands of dollars)

2015 2014
Accounts payable - Other government departments and agencies $427 $195
Accounts payable - External parties 1,356 1,271
Total accounts payable 1,783 1,466
Accrued liabilities 3,364 2,639
Total accounts payable and accrued liabilities $5,147 $4,105

5. Deferred Revenue

Deferred revenue represents the balance at year end of unearned revenues stemming from amounts received from external parties that are restricted in order to fund the expenditures related to specific research projects and stemming from amounts received for fees prior to services being performed. Revenue is recognized in the period in which these expenditures are incurred or in which the service is performed. Details of the transactions related to this account are as follows:

(in thousands of dollars)

2015 2014
Opening balance $6,760 $3,961
Amounts received 7,378 9,653
Revenue recognized (7,618) (6,854)
Closing balance $6,520 $6,760

6. Employee Future Benefits

  1. Pension benefits:

    CIHR’s employees participate in the public service pension plan (the “Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with the Canada/Québec Pension Plans benefits and they are indexed to inflation.

    Both the employees and CIHR contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

    The 2014-15 expense amounts to $3,994 ($4,139 in 2013-14). For Group 1 members, the expense represents approximately 1.41 times (1.6 times in 2013-14) the employee contributions and, for Group 2 members, approximately 1.39 times (1.5 times in 2013-14) the employee contributions.

    CIHR’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 of Canada, as the Plan’s sponsor.

  2. Severance benefits:

    CIHR provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, estimated as at the date of these financial statements, is as follows:

    As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment of CIHR executives and non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in fiscal year 2011–12. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

    (in thousands of dollars)

    2015 2014
    Accrued benefit obligation – Beginning of year $1,530 $1,771
    Expense for the year 26 12
    Benefits paid during the year (292) (253)
    Accrued benefit obligation – End of year $1,264 $1,530

7. Accounts Receivable and Advances

The following table presents details of CIHR’s accounts receivable and advances balances:

(in thousands of dollars)

2015 2014
Receivables - Other government departments and agencies $227 $175
Receivables - External parties 257 163
Accountable advances 1 1
Subtotal 485 339
Allowance for doubtful accounts on receivables from external parties (22) -
Net accounts receivable $463 $339

8. Tangible Capital Assets

(in thousands of dollars)

Cost Accumulated amortization Net Book Value
Capital
asset
class
Opening
balance
Acquisitions Disposals
and
write-offs
Closing
balance
Opening
balance
Amortization Disposals
and
write-offs
Closing
balance
2015 2014
Informatics hardware 1,465 206 - 1,671 1,053 185 - 1,238 433 412
Informatics software 11,823 - - 11,823 11,801 8 - 11,809 14 22
Office equipment 452 8 (30) 430 329 21 (17) 333 97 123
Vehicles 28 - - 28 16 4 - 20 8 12
Total $13,768 $214 $(30) $13,952 $13,199 $218 $(17) $13,400 $552 $569

Amortization expense (in thousands of dollars) for the year ended March 31, 2015 is $218 (2014 – $2,063).

9. Contractual Obligations

The nature of CIHR’s activities can result in some large multi-year contracts and obligations whereby CIHR will be obligated to make some future payments in order to carry out its grants and awards payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)

Contractual Obligations 2016 2017 2018 2019 2020 and thereafter Total
Grants and awards $760,419 $570,742 $379,532 $212,297 $76,145 $1,999,135
Operating expenditures 3,497 223 51 - - 3,771
Total $763,916 $570,965 $379,583 $212,297 $76,145 $2,002,906

10. Contingent Liabilities

CIHR may be subject to claims in the normal course of business. In management's view, there are currently no such claims with a material impact on the financial statements and consequently, no provision has been made.

11. Related Party Transactions

CIHR is related as a result of common ownership to all government departments, agencies and Crown corporations. CIHR enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, CIHR received common services which were obtained without charge from other government departments as disclosed below.

  1. Common services provided without charge by other government departments

    During the year, CIHR received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded in CIHR’s Statement of Operations and Departmental Net Financial Position as follows:

    (in thousands of dollars)

    2015 2014
    Accommodation provided by Public Works and Government Services Canada $3,477 $3,538
    Employer's contribution to the health and dental insurance plans provided by Treasury Board Secretariat 3,193 3,051
    Total $6,670 $6,589

    The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included in CIHR’s Statement of Operations and Departmental Net Financial Position.

  2. Administration of CIHR funds by other government departments

    Other federal departments and agencies administer funds on behalf of CIHR to issue grants, awards and related payments. Other federal departments and agencies administered $96,515,793 in funds for grants and awards in 2014-15 ($96,702,331 in 2013-14), primarily pertaining to the Canada Research Chairs program. These expenses are reflected in CIHR’s Statement of Operations and Departmental Net Financial Position.

12. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Agency. However, it did result in the use of additional spending authorities by the Agency. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, which is responsible for the administration of the government pay system.

13. Segmented Information

Presentation by segment is based on CIHR’s program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in thousands of dollars)

2015 2014
Investigator-Initiated Health Research Priority-Driven Health Research Internal Services Total Total
Transfer payments
Grants and Awards $691,290 $276,173 - $967,463 $950,809
Refunds of previous years' grants and awards (1,295) (602) - (1,897) (4,105)
Total transfer payments 689,995 275,571 - 965,566 946,704
Operating Expenses
Salaries and employee benefits 28,591 15,948 2,700 47,239 45,407
Professional and special services 3,637 1,615 320 5,572 3,963
Accomodation 2,271 1,007 199 3,477 3,538
Travel 1,594 708 140 2,442 3,506
Other 1,277 557 123 1,957 2,242
Furniture, equipment and software 443 197 39 679 663
Communication 370 165 32 567 798
Amortization of tangible capital assets 143 63 12 218 2,063
Total operating expenses 38,326 20,260 3,565 62,151 62,180
Total expenses 728,321 295,831 3,565 1,027,717 1,008,884
Revenues
Donations for health research 356 7,262 - 7,618 6,854
Total revenues 356 7,262 - 7,618 6,854
Net cost from continuing operations $727,965 $288,569 $3,565 $1,020,099 $1,002,030

14. Comparative Information

Comparative figures have been reclassified to conform to the current year’s presentation.

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