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Section III: Supplementary Information

Notes:
Wherever "actual" expenditures are referred to in Tables on the following pages, it should be noted that the actual expenditures are prepared on a cash basis to compare with Parliamentary Appropriations which are cash basis budgets. Hence, the actual expenditures will not tie in with the Statements of Operations and Net Assets of the audited financial statements which are prepared on an accrual basis.

Table 1: Comparison of Planned to Actual Spending (including FTEs)


($ millions) 2004-05
Actual
2005-06
Actual
2006-07
Main
Estimates
Planned
Spending
Total
Authorities
Total Actuals
Fund Health Research 436.8 466.5 444.6 469.4 472.4 499.5
Fund Health Researchers and Trainees 162.7 178.3 217.5 217.7 218.1 190.4
Fund Research Resources, Collaboration and Other Grants to Strengthen the Health Research Community 69.0 70.0 68.2 73.2 70.4 66.2
Develop and Support Strong Health Research Community through National and International Alliances and Priority-Setting 24.6 23.4 28.1 28.2 28.1 23.3
Inform Research, Clinical Practice and Public Policy on Ethical, Legal and Social Issues Related to Health and Health Research 2.7 1.9 6.3 6.3 6.3 2.2
Support Activities on Knowledge Translation, Exchange, Use and Strategies to Strengthen the Health System 31.8 35.4 40.7 40.7 40.8 35.0
Support National Efforts to Capture the Economic Value for Canada of Health Research Advances made at Canadian Institutions 20.4 25.4 27.3 27.3 27.3 26.7
Total 748.0 800.9 832.7 862.8 863.4 843.3
Less: Non‑respendable revenue 3.4 4.1 N/A 2.8 N/A 2.4
Plus: Cost of services received without charge 4.2 4.8 N/A 5.4 N/A 5.2
Total Departmental Spending 748.8 801.6 N/A 865.4 N/A 846.1
Full-time Equivalents 282 324 390 390 390 347

Table 2: Resources by Program Activity


($ millions) 2006-2007
Program Activity Operating Grants Total: Gross Budgetary Expenditures Total: Net Budgetary
Expenditures
Loans,
Investments,
and
Advances
Total
Fund Health Research            
Main Estimates 23.2 421.4 444.6 444.6 0.0 444.6
Planned Spending 23.8 445.6 469.4 469.4 0.0 469.4
Total Authorities 24.2 448.2 472.4 472.4 0.0 472.4
Actual Spending 23.1 476.4 499.5 499.5 0.0 499.5
Fund Health Researchers and Trainees            
Main Estimates 8.5 209.0 217.5 217.5 0.0 217.5
Planned Spending 8.7 209.0 217.7 217.7 0.0 217.7
Total Authorities 8.8 209.3 218.1 218.1 0.0 218.1
Actual Spending 11.7 178.7 190.4 190.4 0.0 190.4
Fund Research Resources, Collaboration and other Grants to Strengthen the Health Research Community            
Main Estimates 2.7 65.5 68.2 68.2 0.0 68.2
Planned Spending 2.8 70.4 73.2 73.2 0.0 73.2
Total Authorities 2.6 67.8 70.4 70.4 0.0 70.4
Actual Spending 3.5 62.7 66.2 66.2 0.0 66.2
Develop and Support Strong Health Research Community through National and International Alliances and Priority-Setting            
Main Estimates 4.3 23.8 28.1 28.1 0.0 28.1
Planned Spending 4.4 23.8 28.2 28.2 0.0 28.2
Total Authorities 4.3 23.8 28.1 28.1 0.0 28.1
Actual Spending 1.3 22.0 23.3 23.3 0.0 23.3
Inform Research, Clinical Practice and Public Policy on Ethical, Legal and Social Issues Related to Health and Health Research            
Main Estimates 2.5 3.8 6.3 6.3 0.0 6.3
Planned Spending 2.5 3.8 6.3 6.3 0.0 6.3
Total Authorities 2.5 3.8 6.3 6.3 0.0 6.3
Actual Spending 0.5 1.7 2.2 2.2 0.0 2.2
Support Activities on Knowledge Translation, Exchange, Use and Strategies to Strengthen the Health System            
Main Estimates 3.0 37.7 40.7 40.7 0.0 40.7
Planned Spending 3.0 37.7 40.7 40.7 0.0 40.7
Total Authorities 3.1 37.7 40.8 40.8 0.0 40.8
Actual Spending 2.2 32.8 35.0 35.0 0.0 35.0
Support National Efforts to Capture the Economic Value for Canada of Health Research Advances made at Canadian Institutions            
Main Estimates 1.7 25.6 27.3 27.3 0.0 27.3
Planned Spending 1.7 25.6 27.3 27.3 0.0 27.3
Total Authorities 1.7 25.6 27.3 27.3 0.0 27.3
Actual Spending 1.3 25.4 26.7 26.7 0.0 26.7

Table 2 compares actual spending by CIHR in millions of dollars versus spending authorized by the Treasury Board of Canada and planned CIHR spending. The variance in Operating Expenses resulted primarily from staffing delays and higher then average employee turnover. Please note that CIHR is able to carry forward up to 5% of its operating budget from one fiscal year to the next fiscal year. This means that $2.1 million of the $3.7 million lapse in the operating budget will be carried forward and so increase the 2007-08 fiscal year operating budget. The lapsed funds for 2006-07 for Vote 20 (Grants) resulted almost entirely from the Canada Research Chairs Program being under spent by $16.4 million. This variance resulted directly from difficulties encountered by the Universities in filling the Chairs. CIHR Management has determined that no financial impact will result in future fiscal years from this lapse.

Table 3: Voted and Statutory Items

($ millions )


Vote or
Statutory Item
Truncated Vote
or Statutory Wording
2006-2007
Main
Estimates
Planned
Spending
Total
Authorities
Total Actuals
15 Operating expenditures 41.3 42.3 43.0 39.4
20 Grants 786.8 815.9 816.2 799.7
(S) Contributions to employee benefit plans 4.6 4.6 4.2 4.2
  Total 832.7 862.8 863.4 843.3

Table 4: Services Provided Without Charge


($ millions ) 2006-2007
Actual Spending
Accommodation provided by Public Works and Government Services Canada 3.3
Contributions covering the employer's share of employees' insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat (excluding revolving funds); employer's contribution to employees' insured benefits plans and associated expenditures paid by the Treasury Board of Canada Secretariat 1.8
Audit services provided by the Office of the Auditor General of Canada 0.1
Total 2006-07 Services received without charge 5.2

Table 5: Sources of Non-Respendable Revenue


($ millions ) Actual
2004‑05
Actual
2005‑06
2006-2007
Main
Estimates
Planned
Revenue
Total
Authorities
Actual
Fund health research            
Refunds of Previous Years' Expenditures 1.8 2.2 N/A 1.5 N/A 1.3
Fund health researchers and trainees            
Refunds of Previous Years' Expenditures 0.9 1.1 N/A 0.8 N/A 0.6
Fund research resources, collaboration and other grants to strengthen the health research community            
Refunds of Previous Years' Expenditures 0.3 0.3 N/A 0.2 N/A 0.2
Develop and support strong health research community through national and international alliances and priority-settings            
Refunds of Previous Years' Expenditures 0.1 0.1 N/A 0.1 N/A 0.1
Inform research, clinical practice and public policy on ethical, legal and social issues (ELSI) related to health and health research            
Refunds of Previous Years' Expenditures 0.0 0.1 N/A 0.0 N/A 0.0
Support activities on knowledge translation, exchange, use and strategies to strengthen the health system            
Refunds of Previous Years' Expenditures 0.2 0.2 N/A 0.1 N/A 0.1
Support national effort to capture the economic value for Canada of health research advances made at Canadian institutions            
Refunds of Previous Years' Expenditures 0.1 0.1 N/A 0.1 N/A 0.1
Total Non-Respendable Revenue 3.4 4.1 N/A 2.8 N/A 2.4

Table 5 - Refunds of previous years' expenses 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 recorded as expenses in the financial statements but are recorded as revenue on an appropriation basis and therefore are excluded when determining current year appropriations used.

Table 6: Response to Parliamentary Committees, Audits and Evaluations


Response to Parliamentary Committees

Fetal Alcohol Spectrum Disorder

The Health Committee's report on FASD (New Strategy for the Prevention of FASD) was tabled September 16, 2006. http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?COM=10481&Lang=1&SourceId=188751

The report made four recommendations including a recommendation that Health Canada (HC) be mandated to lead on a comprehensive FASD action plan, placed within a larger alcohol strategy, that HC report annually on the status of FASD activities, that HC collect data on the incidence and prevalence of FASD so that future investments can be made based on evidence of need and that HC put in place measures to evaluate the effectiveness of the action plan and the return on investment.

The Government response, entitled, Government Response to the Second Report of the Standing Committee of Health Even One is Too Many: A Call for a Comprehensive Action Plan on Fetal Alcohol Spectrum Disorder, was tabled January 17, 2007. The Response reported on the actions of the Government to date and future directions as guided by the five themes of the FASD: A Framework for Action of 2003: 1. increasing awareness; 2. increasing capacity; 3. creating tools; 4. expanding knowledge; and 5. supporting action.

The Government response can be found at http://www.phac-aspc.gc.ca/fasd-etcaf/govresfasd-resgovetcaf_e.html

Childhood Obesity

The Health Committee tabled its report on childhood obesity, Healthy Weights for Healthy Kids on March 27, 2007 in the House of Commons. http://cmte.parl.gc.ca/cmte/CommitteePublication.aspx?COM=10481&Lang=1&SourceId=199309 The Report included 13 recommendations focusing on targets to halt the rise in child obesity, to public awareness, data collection, knowledge exchange and establishment of a lead department for interdepartmental action. Recommendation seven focused on research, specifically recommending that research capacity across the determinants related to healthy weights be increased, that it focus on both physical activity and healthy foods, that research efforts not be limited to federal departments and agencies and that research on determinants of health for First Nations, Inuit and Mtis children be undertaken.

The Government response to the Committee's report must be tabled by August 22, 2007.

Response to the Auditor General of Canada
There were no Responses to the Auditor General of Canada in 2006-2007.
External Audits
There were no External Audits in 2006-2007.
Internal Audits

Two carry-forward internal audits from 2005-06 were completed in this fiscal year, the Audit of Records and Information Management, July 2006, http://www.cihr-irsc.gc.ca/e/32833.html, and the Audit of Official Languages, June 2006, http://www.cihr-irsc.gc.ca/e/32660.html.

Internal audits reported in the RPP for 2006-07 have been carried forward to 2007-08 because the Internal Audit function experienced a shortage of executive and staff during the year. The function has since been fully resourced for 2007-08.

Internal Evaluations

External Review of CIHR. Completed in June 2006, an international panel made 14 observations based on their assessment of CIHR and each of the 13 Institutes. The report is on the CIHR website at http://www.cihr-irsc.gc.ca/e/31464.html#b.

The start of the evaluation of the Strategic Training Initiative in Health Research was delayed. The final report will be available by March 31, 2008.

Evaluation Framework for the Canada Graduate Scholarships Program was completed and will be used to launch an evaluation of the program in fiscal 2007-2008.

Evaluation Framework for the Operating Grants Program has been postponed to fiscal 2007-2008.

Evaluation Framework for the CIHR/Rx&D program. A results-based management and accountability framework was completed. On this basis, program management will undertake performance monitoring activities.

An integrated RMAF/RBAF for CIHR grant programs was created to support relevant Treasury Board activities/submissions.


Table 7: Crosswalk Between Performance Indicators Used in 2006-2007 RPP and 2006-2007 DPR


Program Activity and Expected Results Performance Indicators Used in 2006-2007 RPP Performance Indicators Used in 2006-2007 DPR

1.1: Funding health research

Effective and efficient funding programs that enable ethical health research creating health knowledge that responds to opportunities and priorities.

  1. Success of CIHR-funded research programs, including results, awareness and satisfaction levels
  2. Extent to which Institutes have appropriately influenced the research, policy and/or practice agendas in their communities
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded research programs, including results, awareness and satisfaction levels
  3. Extent to which Institutes have appropriately influenced the research, policy and/or practice agendas in their communities

2.1: Fund health researchers and trainees

Effective and efficient funding programs that ensure a supply of highly trained health researchers and trainees are available to conduct outstanding research

  1. Success of CIHR-funded salary and training programs, including results, awareness and satisfaction levels
  2. Level and success of Institute activity in creating opportunities for capacity development based on successful initial and ongoing identification and targeting of research domains in need of capacity development
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded salary and training programs, including results, awareness and satisfaction levels

2.2: Fund research resources, collaboration and other grants to strengthen the health research community

Effective and efficient partnerships and funding programs that lead to a dynamic research environment and outstanding research

  1. Success of CIHR-funded research resources and collaboration programs, including results, awareness and satisfaction levels
  2. Expenditure levels and distribution
  3. Level of Institute leadership, activity and success in strengthening research infrastructure/environment
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded research resources and collaboration programs, including results, awareness and satisfaction levels

2.3: Develop and support a strong health research community through national and international alliances and priority setting

National and international research agendas are formulated and implemented.

  1. Success of CIHR-funded partnership research programs, including results, awareness and satisfaction levels
  2. Number, diversity and scope of linkages, exchanges, alliances and partnerships with other organizations including health policy-makers at all levels of government (especially provincial governments) compared to baseline. Includes willingness of stakeholders to support research in Institute domains and number and size of funding flows through jointly-funded partnership programs where relevant
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded partnership research programs, including results, awareness and satisfaction levels

2.4: Inform research, clinical practice and public policy on ethical, legal and social issues (ELSI) related to health and health research

Uptake and application of ethics knowledge as an integral part of decision-making in health practice, research and policy

  1. Success of CIHR's ELSI activities, for example, changes in the number of ethics-related incidents that arise from health practice, research, and policies
  2. Number of publications resulting from ELSI research
  3. Number of public policies influenced by ELSI principles
  4. Opinions of health researchers, and policy-makers regarding their success in uptake and application of ethical knowledge
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR ELSI activities, including results, awareness and satisfaction levels

3.1: Support activities on knowledge translation, exchange, use and strategies to strengthen the health system

Effective dissemination, exchange, synthesis and application of research results take place to create new knowledge, strengthen Canadian capacity and networks and, together with our partners, enable effective research and application of health research results

  1. Success of CIHR-funded research programs, including results, awareness and satisfaction levels
  2. Increased number, scope and diversity of knowledge translation activities supported by CIHR (and its partners where relevant) or resulting from CIHR activities (for example, synthesis papers, briefs, participation in policy task forces) compared to baseline
  3. Identification of and initial communication with key knowledge translation stakeholders, followed by increased number of inputs (driven by research evidence) to stakeholders' decision processes
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded research programs, including results, awareness and satisfaction levels

3.2: Support national efforts to capture the economic value for Canada of health research advances made at Canadian institutions

Implement strategies to enable the effective development and commercialization of health research that will lead to a better quality of life for Canadians through improvements in the Canadian health system, products and economy. As well, plan, launch and manage competitions and programs for grant funds to create and transfer new knowledge, strengthen Canadian capacity and networks and undertake effective commercialization of health research

  1. Success of CIHR-funded research programs, including results, awareness and satisfaction levels
  2. Number and nature of patents, spin-off companies and licences for intellectual property (IP) generated from CIHR-funded research
  1. Level of activity: number and dollar value of investments
  2. Success of CIHR-funded research programs, including results, awareness and satisfaction levels.
  3. Number and nature of patents, spin-off companies and licences for intellectual property (IP) generated from CIHR-funded research.

Table 8: Financial Statements

Canadian Institutes of Health Research
Management Responsibility for Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements of the Canadian Institutes of Health Research (CIHR) for the year ended March 31, 2007 and all information contained in these statements rests with CIHR's management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector.

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 judgement and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of CIHR's financial transactions. Financial information submitted to the Public Accounts of Canada and included in CIHR's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility and by communications programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the organization.

The Standing Committee on Performance Measurement, Evaluation and Audit, appointed by the Governing Council of CIHR, has reviewed these statements with management and the auditors, and has reported to the Governing Council. The Governing Council has approved the financial statements.

The financial statements of CIHR have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.

Approved by:


James Roberge
James Roberge, CMA
Chief Financial Officer

Alan Bernstein

Dr. Alan Bernstein, O.C., FRSC
President


June 1, 2007



Auditor General of Canada | Vrificatrice gnrale du Canada

Auditor's Report

To the Canadian Institutes of Health Research and the Minister of Health

I have audited the statement of financial position of the Canadian Institutes of Health Research (CIHR) as at March 31, 2007 and the statements of operations, equity and cash flow for the year then ended. These financial statements are the responsibility of CIHR's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of CIHR as at March 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Nancy Y. Cheng
Nancy Y. Cheng, FCA

Assistant Auditor General
for the Auditor General of Canada

Ottawa, Canada
June 1, 2007



Statement of Operations
For the Year Ended March 31

(in thousands of dollars)
  2007
2006
Expenses (Note 4)
  Health research 511,042 475,620
  Health researchers in innovative environments 284,348 275,206
  Transforming health research into action 62,421
61,674

Total Expenses

857,811
812,500
Revenues (Note 5)
  Health research 6,319 6,264
  Health researchers in innovative environments 3,516 3,624
  Transforming health research into action 772 812
Total Revenues 10,607
10,700
Net Cost of Operations 847,204
801,800

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



Statement of Financial Position
As at March 31

(in thousands of dollars)
  2007
2006
Assets
Financial Assets
  Due from the Consolidated Revenue Fund 15,751 18,640
  Accounts receivable:    
    Other Federal Government departments 678 367
    External parties 395 353
  Advances 196
191

Total financial assets

17,020 19,551
 
Non-financial assets
  Prepaid expenses 445 542
  Tangible capital assets (Note 6) 3,904
4,049
Total non-financial assets 4,349
4,591

Total Assets

21,369
24,142
Liabilities
  Accounts payable and accrued liabilities    
    Other Federal Government departments 444 381
    External parties 2,577 3,913
  Vacation pay and compensatory leave 1,110 910
  Deferred revenue (Note 7) 12,730 14,346
  Employee severance benefits (Note 8) 5,248
4,633

Total Liabilities

22,109
24,183

Equity of Canada

(740)
(41)

Total Liabilities and Equity of Canada

21,369
24,142

Contingent liabilities (Note 9)

Contractual obligations (Note 10)

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



Approved by Governing Council:

Alan Bernstein
Dr. Alan Bernstein
, O.C., FRSC
Chair

Approved by Management:

James Roberge
James Roberge
, CMA
Chief Financial Officer




Statement of Equity
For the year ended March 31

(in thousands of dollars)
  2007
2006
Equity of Canada, Beginning of Year (41) 273
  Net cost of operations (847,204) (801,800)
  Net cash provided by Government 844,170 790,458
  Change in due from the Consolidated Revenue Fund (2,889) 6,223
  Services provided without charge by other
Government departments (Note 11)
5,224
4,805
Equity of Canada, End of Year (740)
(41)

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



Statement of Cash Flow
For the Year Ended March 31

(in thousands of dollars)
  2007
2006
Operating Activities
  Net cost of operations 847,204 801,800
  Non-cash items:
    Amortization of tangible capital assets (1,498) (1,376)
   

Services provided without charge by other
Government departments

(5,224) (4,805)
    Gain on disposal of capital assets 4
-
  (6,718) (6,181)
  Variations in Statement of Financial Position:
    Increase (decrease) in accounts receivable
and advances
358 (124)
   

(Decrease) increase in prepaid expenses

(97) 342
    Decrease (increase) in liabilities
2,074
(6,856)
  2,335
(6,638)
Cash Used by Operating Activities 842,821
788,981
 
Capital Investment Activities    
  Acquisitions of tangible capital assets 1,358 1,477
 

Proceeds on disposal of capital assets

(9)
-
Cash Used by Capital Investment Activities 1,349
1,477
Financing Activities
  Net Cash Provided by Government of Canada 844,170
790,458

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



Notes to the Financial Statements
For the Year Ended March 31, 2007

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 achieves these objectives through three strategic outcomes. The first strategic outcome is outstanding research, achieved by funding excellent and ethical health research across all disciplines that are relevant to health. The second strategic outcome is outstanding researchers in innovative environments, achieved by providing funding to develop and sustain health researchers in vibrant, innovative and stable research environments. The third strategic outcome is transforming health research into action, achieved by CIHR's knowledge translation activities and funding aimed to accelerate the transformation of research results into health benefits for Canadians and an improved health care system as well as helping to move new research breakthroughs toward potential commercial applications.

CIHR is led by a President who is the Chairperson of a Governing Council of not more than nineteen other 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 lapsing authorities. Employee benefits are funded by statutory authorities.

2. Significant Accounting Policies

These financial statements have been prepared in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector. The most significant accounting policies are as follows:

(a) Parliamentary appropriations - CIHR is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to CIHR do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.

(b) 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 Federal Government.

(c) Due from the Consolidated Revenue Fund represents the amount of cash that CIHR is entitled to draw from the Consolidated Revenue Fund without further appropriations, in order to discharge its liabilities.

(d) Revenues

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

  • Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses - Expenses are recorded on the accrual basis:

  • Grants and awards are recognized when the entitlement has been established, the recipient has met the eligibility criteria, and program authority exists.

  • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.

  • Services provided without charge by other government departments are recorded as operating expenses at their estimated cost.

(f) 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 recorded as expenses in the financial statements but are recorded as revenue on an appropriation basis and therefore are excluded when determining current year appropriations used.

(g) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. CIHR's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of CIHR to the Plan. Current legislation does not require CIHR to make contributions for any actuarial deficiencies of the Plan.

  2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.

(h) Accounts receivable - These are stated at amounts expected to be ultimately realized. A provision for doubtful accounts is made for any amounts where recovery is considered uncertain.

(i) Contingent liabilities - Contingent liabilities are potential liabilities which 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 is 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.

(j) 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 years
Office equipment 10 years
Motor vehicles 5 years

Amounts included in work-in-progress are uncompleted capital projects which are transferred to informatics software upon completion, and are then amortized according to CIHR's policy.

(k) Measurement uncertainty - The preparation of these financial statements in accordance with Treasury Board accounting policies and year-end instructions issued by the Office of the Comptroller General, which are consistent with Canadian generally accepted accounting principles for the public sector, 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 vacation pay and compensatory leave, employee severance benefits and the useful life of tangible capital assets. Actual results could differ significantly 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 Appropriations

CIHR receives most of its funding through annual parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through parliamentary appropriations 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:

(a) Reconciliation of net cost of operations to current year appropriations used


  2007
2006
(in thousands of dollars)
Net cost of operations 847,204 801,800
Adjustments for items affecting net cost of operations but not
affecting appropriations:
  Add (Less):
    Services provided without charge (5,224) (4,805)
    Gain on disposal of capital assets 4 -
    Refunds of previous years' expenses 2,432 4,132
    Employee severance benefits (615) (807)
    Amortization of tangible capital assets (1,498) (1,376)
    Vacation pay and compensatory leave (200) 174
    Other adjustments (94)
(61)
      (5,195) (2,743)
Adjustments for items not affecting net cost of operations
but affecting appropriations
  Add (Less):
    Acquisitions of tangible capital assets 1,358 1,477
    Prepaid expenses (97)
342
Current year appropriations used 843,270
800,876

(b) Appropriations provided and used


  2007
2006
(in thousands of dollars)
Parliamentary appropriations provided:    
Vote 15 - Operating expenditures 43,021 39,902
Less:    
Lapsed appropriation (3,657)
(1,393)
  39,364
38,509
Vote 20 - Grants 816,183 768,980
Less:    
Lapsed appropriation (16,536)
(10,832)
  799,647 758,148
Statutory contributions to employee benefit plans 4,259
4,219
Current year appropriations used 843,270
800,876

(c) Reconciliation of net cash provided by Government to Parliamentary appropriations used


  2007
2006
(in thousands of dollars)
Net cash provided by Government 844,170 790,458
Refunds of previous years' expenses 2,432 4,132
Cash proceeds on disposal of capital assets 9 -
Change in net position in the Consolidated Revenue Fund
  Variation in accounts receivable and advances (358) 124
  Variation in accounts payable and accrued liabilities (1,273) 976
  Variation in deferred revenue (1,616) 5,247
  Other adjustments (94)
(61)
 
(3,341)
6,286
Current year appropriations used 843,270
800,876

4. Expenses


  2007
2006
(in thousands of dollars)
Grants and awards
  Open competitions 487,917 478,109
  Strategic initiatives 195,762 171,878
  Institute support grants 13,000 13,000
  Knowledge translation 3,864 5,458
  Canada research chairs 82,205 72,900
  Networks of centres of excellence 27,500
27,500
Total grants and awards 810,248 768,845
Less: Refunds of previous years' grants and awards (1,972)
(3,777)
  808,276
765,068
Operations and administration
  Salaries and employee benefits 31,683 29,594
  Professional and special services 4,845 6,184
  Travel 3,425 3,957
  Accommodation 3,314 2,865
  Furniture, equipment and software 1,998 1,185
  Amortization of tangible capital assets 1,498 1,376
  Communication 1,450 1,308
  Other 1,322
963
Total operations and administration 49,535
47,432
Total expenses 857,811
812,500

5. Revenues

The following are the revenues recognized for the year:


  2007
2006
(in thousands of dollars)
Donations for health research 9,362 9,499
Cost sharing agreements with other Government departments 1,240 1,198
Gain on disposal of capital assets 4 -
Endowments for health research 1 2
Other -
1
Total revenues 10,607
10,700

6. Tangible Capital Assets

(in thousands of dollars)


Cost Accumulated amortization  
Capital asset class Opening balance Acquisitions Transfers, disposals
and
write-offs
Closing balance Opening balance Acquisitions Transfers, disposals
and
write-offs
Closing balance 2007
Net
Book Value
2006
Net
Book Value

Informatics hardware

Informatics software

Office equipment

Vehicles

Work-in-progress

1,817

6,574

345

23

14

111

1,206

-

32

9

-

-

-

(23)

-

1,928

7,780

345

32

23

1,270

3,347

89

18

-

276

1,184

34

4

-

-

-

-

(18)

-

1,546

4,531

123

4

-

382

3,249

222

28

23

547

3,227

256

5

14

Total 8,773 1,358 (23) 10,108 4,724 1,498 (18) 6,204 3,904 4,049

Amortization expense (in thousands) for the year ended March 31, 2007 is $1,498 (2006 - $1,376).

7. Deferred Revenue

Monies received as donations from various organizations and individuals for health research as well as interest on endowments are recorded as deferred revenue until such time that they are disbursed in accordance with agreements between the contributor and CIHR or in accordance with the terms of the endowments.

The transactions relating to these accounts are as follows:


  2007
2006
(in thousands of dollars)
Donations for health research
Balance, beginning of the year 14,344 9,097
  Add:
    Donations received 7,191 14,449
    Interest earned 553 297
  Less:
    Grants expensed 9,362
9,499
Balance, end of the year 12,726
14,344
Interest on endowments for health research
Balance, beginning of the year 2 2
  Add:
    Interest earned 3 2
  Less:
    Miscellaneous expenses 1
2
Balance, end of the year 4
2
Total deferred revenue 12,730
14,346

8. Employee Benefits

Employees of CIHR are entitled to specific benefits on or after termination or retirement, as provided for under various collective agreements or conditions of employment.

(a) Pension benefits - CIHR's employees participate in the Public Service Pension 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, multiplied by the average of the best five consecutive years of earnings. The benefits are integrated with the Canada/Quebec Pension Plans benefits and they are indexed to inflation. Both the employees and CIHR contribute to the cost of 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.

The 2006-07 expense represents approximately 2.3 times (2.6 in 2005-06) the contributions by employees.

CIHR's and employees' contributions to the Public Service Pension Plan for the year were as follows:


  2007
2006
(in thousands of dollars)
CIHR's contributions 3,139 3,121
Employees' contributions 1,378 1,203

(b) Severance benefits - CIHR provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:


  2007
2006
(in thousands of dollars)
Accrued benefit obligation, beginning of year 4,633 3,826
Expense for the year 898 1,024
Benefits paid during the year (283)
(217)
Accrued benefit obligation, end of year 5,248
4,633

9. Contingent Liabilities

A legal suit for employment equity was initiated by the Public Service Alliance of Canada against Her Majesty the Queen naming certain separate employer organizations of the Government of Canada, including the Canadian Institutes of Health Research (CIHR), as defendants. The amount of this claim, as it relates to CIHR, is estimated to be $747,000. In management's opinion, the outcome of this litigation is not presently determinable and no estimated liability has been accrued or expense recorded in the financial statements.

10. Contractual Obligations

CIHR is committed to disburse grants and awards in future years subject to the appropriation of funds by Parliament. In addition, the nature of CIHR's operating activities result in some multi-year contracts whereby CIHR will be committed to make some future payments when the goods or services are rendered. Future year contractual obligations are as follows.


(in thousands of dollars)
2008 2009 2010 2011 2012 and
thereafter
Total

Grants and awards

Operating

730,371

1,989

520,055

167

324,947

75

192,438

-

94,468

-

1,862,279

2,231

Total 732,360 520,222 325,022 192,438 94,468 1,864,510

11. Related Party Transactions

CIHR is related in terms of common ownership to all Government of Canada 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 services which were obtained without charge from other Government departments as presented in part (a):

(a) Services provided without charge


  2007
2006
(in thousands of dollars)
Accommodation provided by Public Works and
Government Services Canada
3,314 2,865
Employer's contribution to the health and dental
insurance plans provided by Treasury Board Secretariat
1,772 1,864
Audit services provided by the Office of the Auditor
General of Canada
138
76
Total services provided without charge
by other Government departments
5,224
4,805

(b) Administration of programs on behalf of other government departments
CIHR administers funds received from other federal departments and agencies to issue grants, awards and related payments on their behalf. During the year, CIHR administered $1,239,838 ($1,198,175 in 2006) in funds for grants and awards. These amounts are reflected in CIHR's Statement of Operations as both revenues and expenses.

(c) 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. During the year, other federal departments and agencies administered $87,331,623 ($76,965,301 in 2006) in funds for grants and awards. These amounts are reflected in CIHR's Statement of Operations as expenses.

12. Financial Instruments

The fair values of financial assets and liabilities approximate the carrying amounts of these instruments due to the short period to maturity.

Table 9: Details on Transfer Payment Programs (TPPs)

The following Transfer Payment Programs tables have been completed and are available at http://www.tbs-sct.gc.ca/rma/dpr3/06-07/index_e.asp.:

  • Grants for Research Projects and Personnel Support
  • Institute Support Grants
  • Canada Graduate Scholarships