Future-Oriented Statement of Operations 2020-21

Canadian Institutes of Health Research
Future-Oriented Statement of Operations (unaudited)
for the year ended March 31
(in thousands of dollars)

Forecast results
2019-20
Planned results
2020-21
Expenses
Funding health research and training $ 1,178,571 $ 1,189,827
Internal Services 35,739 35,578
Total expenses 1,214,310 1,225,405
Revenues
Funding health research and training 7,422 4,877
Total revenues 7,422 4,877
Net cost of operations before government funding and transfers $ 1,206,888 $ 1,220,528
The accompanying notes form an integral part of these financial statements.

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of the government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for the fiscal year 2019-20 is based on actual results as at December 13, 2019 and forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the fiscal year 2020-21.

The main assumptions underlying the forecasts are as follows:

These assumptions are adopted as at December 23, 2019.

2. Variations and changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

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

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:

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

3. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2019-20, and is 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:

(a) Revenues

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

Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned.

Other revenues are recognized in the period the event giving rise to the revenues occurred.

(b) 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 revenue.

(c) Expenses

Grants and awards (transfer payments) are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

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 carrying value.

4. Parliamentary authorities

CIHR receives most of its funding through annual Parliamentary authorities. Items recognized in the Future-Oriented Statement of Operations 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:

(a) Reconciliation of net cost of operations to requested authorities

Forecast results
2019-20
Planned results
2020-21
Net cost of operations before government funding and transfers $ 1,206,888 $ 1,220,528
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (2,282) (2,567)
Services provided without charge by other government departments (7,507) (7,525)
Increase in vacation pay and compensatory leave (1,000) (402)
Decrease in employee future benefits 74 91
Refunds of previous years’ grants and awards 3,584 3,877
  (7,131) (6,526)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 956 857
Increase in prepaid expenses 129 -
  1,085 857
Requested authorities $ 1,200,842 $ 1,214,859

(b) Authorities requested

Forecast results
2019-20
Planned results
2020-21
Authorities requested
Vote 1 - Operating expenditures $ 57,793 $ 57,932
Vote 5 - Grants 1,136,201 1,150,268
Statutory amounts 6,848 6,659
Requested authorities $ 1,200,842 $ 1,214,859
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