of New Zealand Statement of Performance Expectations Statement of Performance... · Challenges and maximise opportunities for ... an important role to play in advising the Minister

Health Research Council

of New Zealand

__________________________________

Statement of

Performance

Expectations

2015

www.hrc.govt.nz

Phone: +64 9 303 5200

Fax: +64 9 377 9988

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PO Box 5541, Wellesley Street, Auckland 1141

www.hrc.govt.nz

ISSN 2382-0586 (Print)

ISSN 2382-0594 (Online)

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New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you

attribute the work to the Health Research Council of New Zealand and abide by

the other licence terms.

www.hrc.govt.nz

Table of Contents

Foreword .............................................................................................................................................. 1

Introduction ......................................................................................................................................... 2

Statement of Performance Expectations ................................................................................... 5

Output 1: Health research contracts........................................................................................................... 6

Scope .............................................................................................................................................................. 6

Annual Funding Round ................................................................................................................................... 6 Vision Mātauranga Capability Crown Fund .......................................................................................... 7 Performance indicators .......................................................................................................................... 8

Output 2: Career development contracts .............................................................................................. 10

Scope of the output ................................................................................................................................ 10

Performance indicators ....................................................................................................................... 11

Output 3: Co-funding relationships ......................................................................................................... 12

Scope of the Output ............................................................................................................................... 12

The Partnership Programme .................................................................................................................... 12 International Relationships Fund ........................................................................................................... 13 Health Innovation Partnership................................................................................................................. 13 Performance indicators ....................................................................................................................... 13

Output 4: Contribution to policy, regulatory and ethical frameworks ...................................... 15

Scope of the Output ............................................................................................................................... 15

Performance indicators ....................................................................................................................... 16

Forecast Statement of Comprehensive Revenue and Expense ............................................ 17

Forecast Statement of Financial Position ............................................................................................ 18 Forecast Statement of Cash Flow ............................................................................................................ 19 Notes to the Financial Statements .......................................................................................................... 20

Information on the Organisation ............................................................................................... 32

Appendix 1: Key focus of the HRC’s Research Investment Streams and their

relationship to the performance framework .................................................................... 33

Glossary of Abbreviations and Terms ...................................................................................... 34

HRC Statement of Performance Expectations 2015 1

Foreword

IN 2015, WE WILL SUPPORT HIGH QUALITY AND INNOVATIVE HEALTH

RESEARCH THAT IMPROVES THE HEALTH OF NEW ZEALANDERS. WE

WILL CONTRIBUTE TO A STRONG AND SUSTAINABLE ECONOMY

THROUGH THE DEVELOPMENT OF NEW KNOWLEDGE, MEDICAL

TECHNOLOGIES AND PRODUCTS, AND A HEALTHY, PRODUCTIVE

POPULATION

We will do this by supporting the best health

research that is done in New Zealand,

identified by our internationally recognised,

best-practice processes. We will work closely

with the Ministry of Health and the Ministry

of Business and Innovation (MBIE) to ensure

that the research we support meets our

needs as a nation, supports our economic

growth and attracts and fosters the expertise

and skills that New Zealand needs to prepare

for the challenges of the future as well as

those we face today.

In January, we welcomed our new Chief

Executive, Professor Kathryn McPherson, and

are excited by the skills, expertise and

research experience that she brings to the

organisation. We look forward to a fresh

approach to our business and exploring ways

in which we can deliver even more value and

utility to our stakeholders.

The strategic refresh of our functions and

operating environment in 2015 gives us the

perfect opportunity to further engage, evolve

and excel as an organisation and ensure that

we are well aligned with our stakeholders

and positioned to deliver maximum impact

and value. This year we invested in a

revamped electronic application system,

Gateway, to create an improved and seamless

process for our researchers.

The growing burden of non-communicable

diseases on the health sector is a long-

standing concern and we will continue to

contribute knowledge and innovations that

will reduce the impact of diabetes,

cardiovascular disease and obesity in our

population. Our long-term investment in

understanding the antecedents of these

conditions in utero and early childhood forms

an excellent base on which to build more

effective interventions for at-risk children

and their families.

The link between non-communicable

diseases, mental health and general well-

being is an important one. We understand

that effective interventions require research

that delivers advances in all of these areas.

The HRC has a strong record for keeping

costs down and operating well within the

guidelines set for operational expenditure.

We have reduced costs considerably over the

last five years and continue to look for ways

to do so whilst retaining our current high

standards of performance and service.

Sir Robert Stewart KNZM

Chair

16 June 2015

Professor Richard Beasley CNZM

Deputy Chair

16 June 2015

2 HRC Statement of Performance Expectations 2015

Introduction

This Statement of Performance Expectations sets out the four Outputs

that the HRC will deliver in the 2015/16 financial year, with funding

from Vote Science and Innovation ($82.71 million) and Vote Health

($0.29 million)

The HRC's Statement of Intent 2014–18 (SoI)

provides the basis for our SPE, outlining the

strategic directions for the HRC for the next

three years, and defining the performance

framework and outcomes that we are aiming

to achieve.

The HRC is the principal government funder

of health research, owned by the Minister of

Health, and primarily funded by the Minister

of Science and Innovation.

Our major activity is investing in health

research; some proposed by health

researchers themselves (investigator-led),

some sought through directed requests for

proposals on specified topics (mission-led),

and some through training and development

support for the research workforce in areas

where greater capacity is needed (career

development).

We provide internationally recognised best-

practice processes to ensure that only high-

quality research is supported that will deliver

important health, social and economic

outcomes. This principle underpins our work,

as poorly designed or conducted research is a

waste of precious public resources.

Our investment makes a difference to the

health, wellbeing and productivity of New

Zealanders – through research that generates

new knowledge, solutions and innovations,

and improves the quality and cost-

effectiveness of the healthcare system. By

keeping New Zealanders healthy and

productive, we support economic growth. We

also support innovative research that results

in new products and processes with

commercial value – this can take years to

achieve.

To make all this happen we have to balance

our investment so that we can deliver

knowledge and solutions that will impact

immediately, but also seed the ideas and

support the exploration that will produce the

innovations of the future.

In 2015/16, the HRC plans to spend

approximately $82 million in delivering the

following four Outputs funded primarily

through Vote Science and Innovation:

Output 1: Health Research Contracts;

Output 2: Career Development Contracts;

Output 3: Co-Funding Relationships, and

Key facts about the HRC

Crown Agent (established HRC Act 1990)

Mission: Benefiting New Zealand through health research

Vision: Improved health and quality of life for all

Principle statutory functions:

advise the Minister of Health on national health research policy

advise on health research priorities for New Zealand

initiate and support health research

foster the recruitment, training and retention of health researchers in New Zealand

Our Outcomes: New knowledge, solutions & innovations

improve health

The healthcare system is improved through research evidence & innovation

The best clinicians & health researchers are supported & retained in New Zealand

The impact, responsiveness & uptake of health research is increased


Output 4: Contribution to Policy,

Regulatory and Ethical Frameworks.

The majority of HRC research investment is

mapped to four Research Investment Streams

(RIS) that have been designed to cover all

areas of human health and development. A

summary of the four RIS and the health and

economic benefits that arise from the

research supported is provided in

Appendix 1, p33.

As of 1 July 2015, we expect to have forward

commitments of between $190 and

$210 million to health research contracts,

being undertaken in more than 30 different

research organisations, and supporting a

research workforce of 2751 positions (1721

salaried), equivalent to 850 full-time posts.

Our SoI 2014–18 provides detail on how we

are addressing our Minister’s expectations. In

the coming year, we will also be focusing on

priorities identified by Government and the

Minister of Health, which include supporting

vulnerable children, improving prevention of

disease, injury and disability, lifting the

quality, safety and accessibility of health

services and supporting the health of older

people.

Our work will also make an important

contribution to the Minister of Science and

Innovation’s priority – ‘Increasing the

economic contribution of the skills, science

and innovation systems’. Much of the health

research the HRC funds has an economic

impact, either directly or indirectly, and we

look forward to exploring an increased role in

realising the economic outcomes arising from

the cutting-edge research we support.

The HRC will work closely with MBIE to align

investment with the National Science

Challenges and maximise opportunities for

success in the health-related fields.

Discussions are on-going as to how we can

best work together to co-ordinate investment

and leverage the greatest value for New

Zealand.

The HRC has a ten-member Board appointed

by the Minister of Health (see Information on

the Organisation, p32) with a range of

expertise, as defined by our Act. Members of

the Board chair three of the HRC’s four

Statutory Committees, which provide advice

to the Board on research funding, policy and

training. Some standing committees also have

an important role to play in advising the

Minister of Health on the ethics and safety of

research and new technologies.

Another way we add value is through our

Partnership Programme. We bring

stakeholders together across sectors to

commission research. Sharing the cost,

resources and expertise that each partner

brings to the table raises both the scale and

value of the resulting project.

The HRC has set four high level Outcomes for

the investment, which are shown in the

following schematic of our performance

framework.

HRC committees

Statutory committees

Biomedical Research Committee

Māori Health Committee

Public Health Research Committee

Ethics Committee

Standing committees

Pacific Health Research Committee

Grant Approval Committee

Risk Management Committee

Standing Committee on Therapeutic Trials (SCOTT)

Gene Technology Advisory Committee (GTAC)


The HRC’s Performance Framework

HRC Mission: Benefiting New Zealand through health research; HRC Vision: Improved health & quality of life for all

Outcomes

New knowledge, solutions & innovations improve health

The healthcare system is improved through research evidence & innovation

The best clinicians & health researchers are supported & retained in NZ

The impact, responsiveness & uptake of health research is increased

Research Impacts System Impacts

Building Research Capacity & Capability

Sustainable career pathways enhance the skills of researchers & clinicians

Research opportunities for frontline clinicians are delivered

Research is easily accessed, understood & applied by end-users

Research continues to respect the rights of participants

The ethical framework for reviewing new technologies & trials is sound

NZ has a high-quality & consistent system of ethical review

NZ has access to well-informed & independent ethical advice

NZ has the research capacity to address the needs of our unique population

The HRC works in partnership to ensure NZ’s investment in health research meets sector needs & represents best value

Strong leadership identifies enduring priorities & provides clear direction

Knowledge transfer pathways ensure relevant research is adopted by the health & disability sector

Strategic partnerships engage end-users, leverage benefit, & improve research uptake

Researchers are encouraged to focus on improving health & health equity

NZ has the ability to respond to urgent or emerging issues

High-quality, high-impact, original research is conducted

International advances are adapted for NZ conditions

High-quality research improves health & health equity

More front-line clinicians are engaged in health research

Promising emerging researchers gain valuable research experience

NZ research contributes to national & international advances International advances are adapted to NZ conditions Encourage risk-taking by research teams Support unique & distinctive opportunities

A strong research focus on keeping New Zealanders healthy & productive

Innovative health technologies & therapies develop HRC-funded research contributes to building & sustaining the body of Māori health knowledge & research expertise

HRC research contributes to earlier diagnosis & better treatments for New Zealanders living with serious conditions

Research that improves the quality, cost-effectiveness & sustainability of NZ's health system is prioritised

HRC’s Research Investment Streams HRC Systems

Health & Wellbeing in NZ

Keeping people healthy & independent throughout life

Improving Outcomes for Acute & Chronic Conditions in NZ

Improving the understanding & management of disease & disability in NZ

New Zealand Health Delivery

Strengthening the use of evidence to inform decision-making in health practice or improve the health system

Rangahau Hauora Māori

Contributing to Māori health gains through Māori research that upholds rangatiratanga, & utilises & advances Māori knowledge, resources & people

These impacts are achieved through other HRC initiatives & the work of the HRC’s Statutory & Standing Committees, including the HRC Ethics Committee, the Gene Technology Advisory Committee & the Standing Committee on Therapeutic Trials. The HRC’s Partnership Programme research contracts are included in the investment reported by Research Investment Stream, but investment occurs throughout the year, as do continuous efforts to forge new national & international partnerships & maximise the returns on investment.


Statement of Performance Expectations

WE DESCRIBE IN DETAIL THE FOUR OUTPUTS THAT THE HRC WILL

DELIVER IN 2015/16, OUR PERFORMANCE MEASURES AND TARGETS

The links between the HRC’s outputs and our funding streams are shown in the table below.

HRC Output Funding Sources Vote Output Expense

1. Health Research Contracts Vote Science & Innovation Bequests & donations Cost-sharing arrangements Interest

Health & Society Vision Mātauranga

Capability Fund

2. Career Development Contracts

Vote Science & Innovation Interest

Health & Society

3. Co-funding Relationships a) Partnership Programme b) International Collaborations

Vote Science & Innovation Third-party management

fees Interest

a) Health & Society b) International Relationships

Fund

4. Contribution to Policy, Regulatory & Ethical Frameworks

Vote Health Vote Health


Output 1: Health research contracts

THE HRC INVESTS IN HEALTH RESEARCH CONTRACTS THROUGH

CONTESTABLE FUNDING ROUNDS AND CO-FUNDING PARTNERSHIPS

Cost 2015/16 $ 000’s

Prospective revenue: refer to Financial Statements: $73,985

Prospective cost: refer to Financial Statements:

Deficit funded from reserves:

$74,442

($437)

Scope

This output covers research contracted

through the annual funding round and

Request for Proposals (RFP) processes.

Research contracts funded in this output are

supported by funds from the Health and

Society and Vision Mātauranga Capability

Crown Funds. In the period ending June 2015,

there will be 240 active health research

contracts, some of which were initiated up to

five years previously.

Annual Funding Round

The annual funding round is our major

opportunity to support research that has

been proposed by the research community.

Through this process, we see the work that

researchers are really passionate about and

the areas where they feel that they can make

the biggest contribution. It is also an

opportunity to fund ideas and innovations

that the broader health and science sector

have not yet conceived of, as well as support

links with international teams that have been

forged independently of our processes.

Ensuring that peer-review assessment and

contracting is equitable, free from conflict of

interest, and identifies the best ideas is a

major part of the work of the HRC. The

process of assessment, ending in funding

decisions, takes about nine months in total

and will involve approximately 240 expert

committee members and a further 450-500

specialist reviewers. All research receiving

funding demonstrates a combination of high

scientific merit and a high likelihood of

making a significant contribution towards

improving health, social and economic

outcomes for New Zealand. We invest time

and effort into ensuring that we are picking

the best teams and ideas.

The HRC will support four different types of

contract through the annual funding round,

and Explorer Grants through a separate

funding process. Our Explorer Grants were

introduced in 2012 to provide researchers

with seed support for transformative ideas

that are untested or at an early stage of

Expected HRC support for contracts

in 2015/16

25-30 new Projects (Each up to 3 years, $1.2M)

5 new Programmes (Each up to 5 years, $5.0M max)

6-7 new Feasibility Studies (Each up to 1 year, $150K max)

10 new Emerging Researcher First Grants (Each up to 3 years, $150K max)

3-4 Explorer Grants (Each up to 2 years, $150K max)


development. This investment is all in

addition to the support for the research

contracts still active from previous years.

All new contracts will be selected using the

HRC’s method of peer review (using expert

researchers in the same field to assess the

proposal). All our research contracts will be

monitored to ensure delivery of contracted

objectives.

All investment in this Output is mapped to

one of our four Research Investment Streams

(RIS). These represent broad priority areas

for the HRC’s research investment. They

reflect our drive to deliver greater value for

money by ensuring that investment is

directed to areas of greatest research need

and opportunity. The four RIS, and the

indicative proportion of new investment, are

described in the highlighted text (left). More

information on how the RIS map to the

outcomes and impacts in our Performance

Framework (p 4), taken from the HRC's

Statement of Intent 2014–2018, are set out in

Appendix 1.

The focus on keeping people well, productive

and independent, alongside concerted efforts

to combat chronic conditions and improve

the quality and sustainability of our

healthcare system is driven both by

international trends and by the needs of our

stakeholders and end-users.

We also recognise that New Zealand has a

unique opportunity to support distinctive

approaches to addressing the health needs

and aspirations of Māori, and to build the

capacity needed to work with our indigenous

population in order to improve health

outcomes and achieve health equity.

Vision Mātauranga Capability Crown Fund

The Vision Mātauranga Capability fund

supports contracts to the value of

$1.98 million that progress the goals of the

Vision Mātauranga strategy. The aim of the

strategy is to unlock the science and

innovation potential of Māori knowledge,

resources and people for the environmental,

economic, social and cultural benefit of New

Zealand. In 2015/16, the Vision Mātauranga

Crown Research Fund will support one or

more research projects submitted through

the annual funding round that addresses the

goals of Vision Mātauranga. The fund also

supports Ngā Kanohi Kitea research

contracts, which provide support for iwi,

hapū and Māori community groups to focus

on a community-identified health need. An

important goal for this fund is development

of the capacity to engage in research.

Our four Investment Streams

Health and Wellbeing in New Zealand (approximately 30-35%)

Preventing illness and injury and reducing the burden on our health system.

Keeping New Zealanders healthy and independent for longer is the major focus, but highly innovative research on how the human body functions is also supported. This often provides knowledge needed to create new diagnostics and identify drug targets or medical technologies.

Improving Outcomes for Acute and Chronic Conditions in New Zealand (approximately 35-40%)

Understanding, prevention, diagnosis and management of acute and chronic conditions.

New Zealand Health Delivery (approximately 20%)

Research impacting on the health system and service delivery in the short term

Research will impact on the health system and service delivery within 3-5 years, to contribute to services being delivered more effectively.

Rangahau Hauora Māori (approximately 10%)

Improving Māori health outcomes and quality of life.


Performance indicators

The performance indicators for this output

relate to the quality, priority focus and

timeliness of HRC-funding processes, as well

as the role our funding plays in sustaining a

fit-for-purpose health research workforce.

The performance indicators, baselines and

targets are listed on the following page.

Performance Indicators for Output 1: Health research contracts

Annual performance indicator Baseline 2014/15

Actual 2015/16

Target

Outcome: New knowledge, solutions and innovations improve health

Average number of expert reviewers engaged in assessing each research proposal for the Annual Funding Round

New measure 3.7 3-5

One of the key tenets of the HRC's approach to commissioning research is ensuring that the applications are reviewed by experts in the field with the appropriate expertise to judge if the research will make an original and valuable contribution to existing knowledge in an area. Many funders are struggling to maintain a rigorous peer-review process due to the numerous competing demands on health research experts. We are proud of our ability to maintain our high standards in this area.

Time between receipt of Expressions of Interest to invitation to proceed to full proposal

New measure 2.5 months 2-3 months

The HRC runs a two-stage process, starting with receipt of Expressions of Interest. Timeliness in making funding decisions is critical. Applicants need to know as early in the process as possible if they are not likely to be supported, so they can make alternative arrangements to resource their research. Similarly, those who will be invited to submit a full application need to know as soon as possible so that they can plan and have an indication of when funding is likely to commence. Even Expressions of Interest are subjected to a peer-review process. Consequently, we must maintain a tight schedule for external and internal assessment and announcement of results.

.

Alignment with HRC’s

performance framework

Health research contracted through this output delivers to these outcomes (see Performance Framework, p4).

Outcome 1: New knowledge, solutions and innovations improve health.

Outcome 2: The healthcare system is improved through research evidence and innovation.

Outcome 3: The best clinicians and health researchers are supported and retained in New Zealand.



Actual 2015/16

Target

Outcome: The best clinicians & health researchers are supported & retained in NZ

Number of salaried research positions on HRC contracts

1988 2012/13

1721 2013/14

1500-1800

The HRC has a critical role in supporting and building the health research workforce in New Zealand. Our goal is to support approximately 2000 positions on contracts at any given time. In 2013/14, HRC contracts included a further 1030 research positions in 2013/14 for which no salary was requested, taking the total to 2571. On the basis of this, we have set a range for our target for salaried positions that is lower than in the past, knowing that there is significant additional capacity for which no salary is claimed.

Outcome: The impact, responsiveness and uptake of research is increased

Percentage of Māori experts on the committee reviewing research proposals that are led by Māori

New measure

100% 80-100%

If we are to generate research findings that are accepted and taken up by the Māori community, we must maintain specialised funding processes that incorporate Māori values, knowledge and expertise. We do this by tailoring our peer-review process specifically to Māori research, so that applicants know that the cultural importance and relevance of their methodologies and ideas will be understood and appreciated. The number of Māori reviewers involved in this process is a good measure of how successfully we are doing this.


Output 2: Career development contracts

THE HRC WILL OFFER A PROGRAMME OF CAREER DEVELOPMENT

AWARDS, EACH AIMED AT ADDRESSING A GAP IN THE HEALTH

RESEARCH WORKFORCE AND BUILDING VITAL CAPACITY.

Cost 2015/16 $ 000’s



Surplus:

$6,104

$61

Scope of the output

Our career development awards focus on

supporting our most promising emerging

researchers, engaging front-line clinicians in

research, and addressing critical gaps in the

workforce so that New Zealand has the health

research capacity to deal with current and

future health and healthcare-delivery

challenges.

Around 30 awards will be offered in the areas

of Māori, Pacific and clinical research, to

support a mixture of Masters, PhD and post-

doctoral researchers. We have been

successful in building capacity and capability

through our Māori and Pacific awards, and

this will remain a focus.

Three prestigious Sir Charles Hercus Health

Research Fellowships will also be offered.

These fellowships aim to build future

capability to conduct world-leading research

in New Zealand. These advanced post-

doctoral awards support an outstanding

emerging researcher (4–8 years post PhD)

who wishes to establish a career in health

research in New Zealand – this includes those

returning to New Zealand from overseas.

The HRC continues to support opportunities

for front-line clinicians to be involved in

meaningful clinical research, and in 2012

introduced the Clinical Practitioner Research

Fellowship. This opportunity enables

experienced, practicing clinicians to

undertake a programme of research and also

supports the integration of the research

findings into clinical practice.

All career development awards are chosen on

the basis of expert review of the proposed

research and the potential and track-record

of the applicant. The progress of all career

development awardees is monitored through

review of annual reports and periodic

outcome evaluations. Progress reflects

several factors, including an effective

recipient selection process, good recipient

performance and an appropriately

supportive training environment.

Alignment with HRC’s performance

framework




Outcome 3: The best clinicians and health researchers are attracted, supported and retained in New Zealand.




measure HRC’s success in addressing gaps in

the health research workforce, and whether

the career development opportunities the

HRC offers are creating an effective career

pathway that results in successful retention

of good researchers.

Performance Indicators for Output 2: Career development contracts


Actual 2015/16

Target

Outcome: The best clinicians & health researchers are supported & retained in NZ

Average number of HRC Project or Programme contracts awarded to Sir Charles Hercus Postdoctoral Fellowship (SCHPF) award recipients

4 Jan 2014

4 May 2015

2-5

The SCHPF is awarded to future research leaders, some repatriated from overseas. Once we have identified these individuals, we track their research careers to see if they remain in health research (see performance indicators for Outcome 3, HRC's Statement of Intent 2014–2018). One measure of whether we have correctly identified strong candidates is whether they are able to successfully compete in future HRC funding rounds. The award has been offered for 13 years, and so the number of previous awardees is relatively small (19 in 2015). The analysis is performed annually at the beginning of the year, and so the baseline does not correspond to a financial year.

Number of Pacific Health Research Scholarships awarded in 2014 (including, Masters, PhD and postdoctoral awards)

New measure 6 4-8

Statistical projections show that Pacific peoples will collectively form the majority of the New Zealand population by 2050, whilst current health statistics confront us with increasing disparities in the health of Pacific populations compared with other New Zealanders. If this is to be meaningfully addressed, we need to build the capacity and capability for Pacific people to build the body of knowledge required to find solutions that work within their community. Currently, this capacity is worryingly low.

Number of Māori Health Research Scholarships awarded in 2014 (including, Masters, PhD and postdoctoral awards)

New measure 9 6-10

The HRC has ring-fenced funding for Maori health research for well over a decade, whilst simultaneously offering a broad spectrum of career development awards to Māori researchers to ensure that they have the skills and experience to compete for this funding. Maintaining this capacity is critical to what we are trying to achieve.


Output 3: Co-funding relationships

THROUGH PARTNERING WITH OTHER FUNDERS WE MAKE EFFICIENT

USE OF SCARCE RESOURCES AND FORGE VALUABLE LINKS BETWEEN

GOVERNMENT MINISTRIES, THE HEALTH SECTOR NGOS AND

RESEARCHERS

Cost 2015/16 $ 000’s




$4,870

$(861)

Scope of the Output

By using Vote Science and Innovation funding

to leverage additional investment from other

agencies (both public and private sector), not

only can more significant pieces of research

be funded than the individual agencies alone

could support, but there is increased co-

ordination of research across agencies and

less duplication of resources and effort.

Additionally, co-funding is a useful tool to

promote the ownership of health research

outcomes by other agencies, thereby

increasing the likelihood that there will be

translation into tangible change in policy or

practice.

The HRC invests in co-funding relationships

through the Partnership Programme and the

International Relationships Fund.

In 2015, the HRC and partners will support

research in the areas of rheumatic fever,

pertussis, breast and prostate cancer, the

efficacy and cost-effectiveness of various

health technologies, community-based

primary care and studies focusing on the

Better, Sooner, More Convenient Primary

Health Care initiative. We will also support

research focusing on other areas of New

Zealand healthcare delivery.

The Partnership Programme

The HRC established the Partnership

Programme in 2000 to deliver research that

more effectively meets the knowledge and

evidence needs of policy-makers, planners

and those involved in healthcare delivery.

The HRC partners with government and non-

government agencies to purchase targeted,

mission-led research and utilises a funding

leverage model to pool and grow the

investment by sharing the cost across

partners.

Since the inception of the programme, the

HRC has entered into funding agreements

with a wide range of partners. One of the key

features of the Partnership Programme is

that it often brings together agencies that

have not traditionally worked together to

focus on problems that cannot be solved by

one sector alone. Use of the HRC’s expertise

and processes for commissioning research is

a prerequisite in all funding agreements. We

also commission health research on behalf of

other funders who wish to take advantage of

these processes, but do not require co-

funding from the HRC.


International Relationships Fund

The HRC also invests in co-funding

relationships through the International

Relationships Fund. The International

Relationships Fund focuses on the

development of international collaborations.

In December 2012, the HRC signed an

overarching agreement identifying how the

funds would be utilised to progress

international collaboration. The agreement is

to undertake collaborative research with the

United States, the European Union and China,

with a focus on non-communicable diseases

(NCDs). Following on from this agreement,

the HRC has released an RFP seeking

Expressions of Interest from New Zealand-

based researchers with demonstrated

linkages and working collaborations with

United States-based researchers, and is

committed to jointly funding research that

will lead to effective interventions for NCDs.

The HRC has also become a member

organisation of e-Asia and in 2015 is jointly

funding an internationally collaborative

health research project in partnership with e-

Asia country members. The International

Relationships Fund also provides funds to

support costs associated with engaging with

the Human Frontier Science Program – an

international funding opportunity offering

grants and fellowships for world-leading life

sciences research and researchers.

Health Innovation Partnership

This joint venture between the HRC and the

National Health Committee (NHC) will

channel a joint investment of $8.75 million

into critical research for health technology

assessment. In 2015, research will focus on

the cost-effectiveness and prioritization of

new and existing technologies in the area of

chronic obstructive pulmonary disease and

ischaemic heart disease. Due to fiscal

constraints the Ministry of Health has

withdrawn $3 million from the annual budget

for the Partnership. However, the NHC and

the HRC are committed to continuing this

important venture and a no-cost extension

has been approved to continue this important

work.



relate to our ability to develop strategic

partnerships with other agencies in the

health research sector.


framework




Outcome 4: The impact, responsiveness and uptake of health research is increased.


Performance indicators for Output 3: Co-funding relationships

Annual Performance Indicator Baseline 2014/15

Actual 2015/16

Target

Outcome: The healthcare system is improved through research evidence & innovation

Number of Research Partnerships for NZ Health Delivery (RPNZHD) contracts awarded

8 2013/14

4 4

These partnerships deliver research that is needed by the health sector for planning, service delivery or patient care. Researchers team with health-sector stakeholders to increase the utility of the research. These projects are a key part of our strategy to achieve this outcome and so we will continue to fund four new projects per year. In the first year, HRC ran two rounds in 2013/14, one with the Annual Funding Round, and one 6 months later to provide out-of-cycle funding opportunities. From 2014/15 onwards, only the out-of-cycle round will be offered. Consequently, the baseline has dropped from 8 contracts to 4.

Number of new contracts supported through the Health Innovation Partnership fund

2 2013/14

2 2

This partnership provides much needed evidence on the utility and cost-effectiveness of health technologies.


Output 4: Contribution to policy,

regulatory and ethical frameworks

OUR COMMITTEES ARE A KEY NATIONAL RESOURCE, PROVIDING

ADVICE ON RESEARCH ETHICS, MONITORING AND REGULATION

Cost 2015/16 $ 000’s




$0,300

$(0,008)

Scope of the Output

The HRC undertakes regulatory activities and

safety monitoring, and provides strategic

advice on health research issues. The extent

to which some of these services are needed

depends on the nature of the research

applications submitted and varies from year

to year. These activities are provided

primarily through the work of several HRC

committees, which are listed below with their

key functions.

HRC Ethics Committee: Provides

independent ethical advice on health

research of national importance or great

complexity, approves health and

disability and institutional ethics

committees in New Zealand, considers

appeals on disputed decisions for

research involving human participants

and on the ethics of introducing

innovative practices, and produces

guidelines on ethical research conduct.

The Ethics Committee also administers

the Data Monitoring Core Committee.

Data Monitoring Core Committee

(DMCC): Provides objective, independent

monitoring of clinical trials in New

Zealand. These are primarily, large-scale

clinical trials initiated by New Zealand

researchers relating to life-threatening

diseases, or diseases which cause

irreversible morbidity or where there are

special concerns regarding patient safety,

where the study investigators are

inexperienced, or where study integrity

could be enhanced by the independence

of the DMCC.

Gene Technology Advisory Committee

(GTAC): Assesses the scientific merit of

New Zealand applications to produce

new medical therapies through the

transfer of genes from another species to

humans, and between species. If

necessary, GTAC will advise the Minister

of Health that such trials should not be

allowed to proceed.

Standing Committee on Therapeutic

Trials (SCOTT): When requested by the

HRC Board, SCOTT will assess whether or

not a proposed clinical trial of a medicine

will provide clinically and scientifically

useful information, particularly in

relation to the safety and efficacy of the

agent.

Part of the HRC’s contribution to an ethical

health research environment is ensuring that

health research in New Zealand is conducted

in a way that is culturally appropriate and

responsive to the needs of our diverse

population. To this end, the HRC provides

guidelines on the conduct of Māori health

research and Pacific health research and


requires that applicants formally address

responsiveness to Māori in research

proposals.

Following the Report of the Health

Committee on its Inquiry into ‘Improving

New Zealand’s Environment to Support

Innovation through Clinical Trials’ in June

2011, the Government responded by

recommending improvements be made with

respect to the efficiency, consistency and

transparency of the Health and Disability

Ethics Committees (HDECs). The HRC’s role

in supporting this process of improvement is

to continue to review HDECs and approve

them when they meet the international

standard for ethical review.


The performance indicators relate to the

HRC’s regular communication of ethics issues

to the research community, timeliness in

relation to the ethics appeals process, and our

continued support of the ethical review and

approval of New Zealand’s Health and

Disability Ethics Committees (HDECs).

Performance indicators for Output 4: Contribution to policy, regulatory and ethical

frameworks


framework

Activities funded through this output deliver to these outcomes (see Performance Framework, p4). Outcome 4: The impact, responsiveness and uptake of health research is increased.


Actual 2015/16

Target

Outcome: Health research in NZ is ethical and safe

Number of Ethics Notes published to inform researchers of issues on ethics in health research

3 2013/14

2 1-3

These notes are an important tool for reaching the health research community and so we have used their publication as a metric for disseminating key information and advice. We are planning to reduce this to an annual publication, as there is insufficient content to justify two.

Percentage of appeals resolved within the target timeframe of 6 weeks from acceptance of the appeal

New measure No appeals 100%

Timeliness is key for responding to appeals on the decision of an HDEC because researchers cannot proceed with their work until a resolution is obtained, funders cannot release the funds, and the HDEC cannot close the case. Although we get few appeals (there has not been one since 2013), this is an important function for the HRC.

Number of HDECs reviewed & approved by HRC annually

4 2013/14

4 4

To create greater efficiency in the ethical review system, the Government implemented a recommendation to reduce the number of HDECs from seven to four in 2012. Approving HDECs is an important role for the HRC and so we continue to set targets.


Forecast Statement of Comprehensive Revenue and Expense

for the year ended 30 June

Note

Actual

2013/14 $(000)

Forecast 2014/15

$(000)

Budget

2015/16 $(000)

Plan

2016/17 $(000)

Plan

2017/18 $(000)

Revenue Funding from the Crown 2 82,827 82,992 83,142 83,142 82,992 Interest Revenue 700 919 578 532 532 Other 3 1,101 587 731 687 695 Total Revenue 84,628 84,498 84,451 84,361 84,219 Expenditure Research Grant costs 4 75,411 81,870 81,000 81,000 81,000 Assessment and Council Committee costs 5 848 901 908 926 944 Secretariat costs Personnel costs 6 2,678 2,474 2,691 2,745 2,800 Depreciation and amortisation expense 28 28 39 45 50 Other 7 988 786 1,059 973 965

3,694 3,288 3,789 3,763 3,815

Total Expenses 79,953 86,060 85,696 85,688 85,759

Surplus/(Deficit) for period 4,675 (1,561) (1,245) (1,328) (1,540) Other Comprehensive Income (expense)

Total Comprehensive Income 4,675 (1,561) (1,245) (1,328) (1,540)

Statement of Changes in Equity

for the year ended 30 June

Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Budget 2016/17

$(000)

Budget 2017/18

$(000)

Equity at the beginning of the year 12 9,825 14,572 13,094 11,954 10,731 Total comprehensive revenue and expense for the year 4,675 (1,561) (1,245) (1,328) (1,540) Other Comprehensive Income/(expense) Interest net charges on Foxley Reserve Fund 72 83 105 105 105

Equity at the end of the year 14,572 13,094 11,954 10,731 9,296

Represented By Public Equity 12,796 11,235 9,990 8,662 7,122 Foxley Reserve Fund 1,777 1,859 1,964 2,069 2,174

Total Equity at 30 June 14,572 13,094 11,954 10,731 9,296

The accompanying accounting policies and notes form part of these financial statements


Forecast Statement of Financial Position as at 30 June

Note Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2015/16

$(000)

Plan 2015/16

$(000)

Cash at Bank 607 650 650 650 650 Short Term Deposits 8 15,357 13,168 11,812 10,430 8,841 Funds held on behalf of – Other Agencies 21,813 17,552 17,773 17,417 17,052 Funds held on behalf of – Foxley Estate 1,777 1,862 1,967 2,072 2,177 Receivables 9 327 361 361 361 361

Total Current Assets 39,881 33,593 32,563 30,930 29,081 Non-Current Assets Property Plant and Equipment 11 53 154 232 297 358

Total Assets 39,934 33,747 32,795 31,227 29,439

Current Liabilities Payables 10 797 423 417 426 434 Contract Retentions 2,470 2,456 2,430 2,428 2,430 Employee Entitlements 282 133 133 136 139 Unearned Management Fees 544 544 544 544 544 Funds held on behalf of other agencies 6,813 2,641 2,861 2,506 2,140

Total Current Liabilities 10,906 6,197 6,385 6,040 5,687 Non-Current Liabilities Funds held on behalf of other agencies 14,456 14,456 14,456 14,456 14,456

Total Non-Current Liabilities 14,456 14,456 14,456 14,456 14,456

Total Liabilities 25,362 20,653 20,841 20,496 20,143

Net Assets 14,572 13,094 11,954 10,731 9,296

Equity Public Equity 12,796 11,235 9,990 8,662 7,122 Foxley Estate Reserve Fund 1,777 1,859 1,964 2,069 2,174

Total Equity 12 14,572 13,094 11,954 10,731 9,296

The accompanying accounting policies and notes form part of these financial statements


Forecast Statement of Cash Flow for the year ended 30 June

Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2016/17

$(000)

Plan 2017/18

$(000)

Cash flows from operating activities Cash was provided from Receipts from the Crown 82,858 82,992 83,142 83,142 82,992 Interest 630 901 578 532 532 Other Revenue 1,102 557 731 687 695

84,590 84,450 84,451 84,361 84,219 Cash was applied to Payments to suppliers (76,083) (83,959) (83,034) (82,927) (82,938) Payments to employees (2,671) (2,625) (2,691) (2,742) (2,797) GST 0 31 36 36 37

(78,754) (86,553) (86,689) (86,633) (86,698)

Net cash flow from operating activities 13 5,836 (2,103) (1,238) (1,272) (1,479) Cash flows from Investing activities Cash was provided from Funds held on behalf of other agencies 8,378 4,185 7,070 7,434 7,572 Maturing Term Deposits 87,734 109,274 110,828 104,543 104,759 Sale of Assets 0 0 0 0 0

96,112 113,459 117,898 111,977 112,331 Cash was applied to Funds paid on behalf of other agencies (6,887) (8,357) (6,825) (7,790) (7,937) Reinvestment of Term Deposits (95,189) (102,910) (109,822) (102,910) (102,910) Purchase of Property Plant & Equipment (18) (132) (118) (110) (110)

(102,094) (111,399) (116,765) (110,810) (110,957)

Net cash flow from (applied to) investing activities (5,982) 2,060 1,133 1,167 1,374 Cash flows from investing activities Cash was provided from Net interest reserve fund 71 86 105 105 105

Net cash flow from investing activities 71 86 105 105 105

Net increase (decrease) in cash held (75) 43 0 0 0 Cash at Bank beginning of year 682 607 650 650 650

Cash at Bank end of year 607 650 650 650 650


Notes to the Financial Statements Note 1 - Statement of accounting policies Reporting Entity Health Research Council of New Zealand (HRC) is a Crown entity as defined by the Crown Entities Act 2004 and is domiciled and operates in New Zealand. The relevant legislation governing HRC’s operations includes the Crown Entities Act 2004 and the Crown Service Enterprise Act 2002. HRC’s ultimate parent is the New Zealand Crown. HRC’s primary objective is to benefit New Zealand through health research. HRC does not operate to make a financial return. HRC has designated itself as a public benefit entity (PBE) for financial reporting purposes. Basis of preparation The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period. Statement of compliance The financial statements of HRC have been prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). The financial statements have been prepared in accordance with Tier 1 PBE accounting standards. These financial statements comply with PBE accounting standards. These financial statements are the first financial statements presented in accordance with the new PBE accounting standards. Presentation currency and rounding The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). Standards issued and not yet effective and not early adopted In May 2013, the External Reporting Board issued a new suite of PBE accounting standards for application by public sector entities for reporting periods beginning on or after 1 July 2014. HRC will apply these standards in preparing the June 2015 financial statements. In October 2014, the PBE suite of accounting standards was updated to incorporate requirements and guidance for the not-for-profit sector. These updated standards apply to PBEs with reporting periods beginning on or after 1 April 2015. HRC will apply these updated standards in preparing its 30 June 2016 financial statements. HRC expects there will be minimal or no change in applying these updated accounting standards.

The GST component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The GST component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes. The accompanying accounting policies and notes form part of these financial statements.


Summary of Significant Accounting Policies

Revenue The specific accounting policies for significant revenue items are explained below: Funding from the Crown HRC is primarily funded from the Crown. This funding is restricted in its use for the purpose of HRC meeting the objectives specified in its founding legislation and the scope of the relevant appropriations of the funder. HRC considers there are no conditions attached to the funding and it is recognised as revenue at the point of entitlement. The fair value of revenue from the Crown has been determined to be equivalent to the amounts due in the funding arrangements. Interest Income Interest income is recognised using the effective interest method. Provision of services Services provided to third parties on commercial terms are exchange transactions. Revenue from these services is recognised in proportion to the stage of completion at balance date. Donated assets Where a physical asset is gifted to or acquired by the HRC for nil or at a subsidised cost, the asset is recognised at fair value and the difference between the consideration provided and fair value of the asset is recognised as revenue. The fair value of donated assets is determined as follows: For new assets, fair value is usually determined by reference to the retail price of the same or similar assets at the time the asset was received. For used assets, fair value is usually determined by reference to the market information for assets of a similar type, condit ion and age. Such assets are recognised as income when control over the asset is obtained. Capital Charge The Capital Charge is recognised as an expense in the financial year which the capital charge relates to. Grant expenditure Discretionary grants are those grants where HRC has no obligation to award on receipt of the grant application and are recognised as expenditure when approved by the Grants Approval Committee and the approval has been communicated to the applicant. Leases Operating leases An operating lease is a lease that does not transfer substantially all the risk and rewards incidental to ownership of an ass et to the lessee. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.


Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term . Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held on call with banks, and other short-term highly liquid investments with original maturities of three months or less. Receivables Short-term receivables are recorded at their face value, less any provision for impairment. A receivable is considered impaired when there is evidence that HRC will not be able to collect the amount due. The amount of the impairment is the difference between the carrying amount of the receivable and the present value of the amounts expected to be collected. Property, plant and equipment Property, plant and equipment consists of the following asset classes’: leasehold improvements, furniture, office and computer equipment. Additions The cost of an item of property, plant and equipment is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to HRC and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated. In most instances, an item of property, plant and equipment is initially recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value as at the date of acquisition. Disposals Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit. When revalued assets are sold, the amounts included in revaluation reserves in respect of those assets are transferred to general funds. Subsequent costs Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to HRC and the cost of the item can be measured reliably. The costs of day-to-day servicing of property, plant and equipment are recognised in the surplus or deficit as they are incurred.


Depreciation Depreciation is provided on a straight-line basis on all property, plant and equipment other than land, at rates that will write-off the cost (or valuation) of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of property, plant and equipment have been estimated as follows: Office and computer equipment 3 to 5 years 20 – 30% Leasehold improvements 5 years 20% Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is the shorter. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end. Intangible assets Software acquisition and development Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the development of software for internal use are recognised as an intangible asset. Direct costs include software development employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred. Costs associated with maintaining computer software are recognised as an expense when incurred. Costs associated with development and maintenance of HRC’s website are recognised as an expense when incurred. The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each financial year is recognised in the surplus or deficit. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Acquired computer software 3 years 33.3% Developed computer software 5 years 20%

Impairment of property, plant and equipment and intangible assets HRC does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return. Non-cash-generating assets Property, plant and equipment and intangible assets held at cost that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable service amount. The recoverable service amount is the higher of an asset’s fair value less costs to sell and value in use.


Value in use is determined using an approach based on either a depreciated replacement cost approach, restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the impairment and availability of information. If an asset’s carrying amount exceeds its recoverable service amount, the asset is regarded as impaired and the carrying amount is written-down to the recoverable amount. The total impairment loss is recognised in the surplus or deficit. Payables Short-term payables are recorded at their face value. Employee entitlements Short-term employee entitlements Employee benefits that are due to be settled within 12 months after the end of the period in which the employee renders the related service are measured based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned to but not yet taken at balance date, and sick leave. Superannuation schemes Defined contribution schemes Obligations for contributions to KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution superannuation schemes and are recognised as an expense in the surplus or deficit as incurred. Equity Equity is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified into the following components. Accumulated surplus/(deficit); Fair value through other comprehensive revenue and expense reserves. Goods and services tax All items in the financial statements are presented exclusive of GST, except for receivables and payables, which are presented on a GST-inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to, or received from, the IRD, including GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST. Income Tax HRC is a public authority and consequently is exempt from the payment of income tax. Accordingly, no provision has been made for income tax.


Cost allocation HRC has determined the cost of outputs using the cost allocation system outlined below. Direct costs are those costs directly attributed to an output. Indirect costs are those costs that cannot be identified in an economically feasible manner with a specific output. Direct costs are charged directly to outputs. Indirect costs are charged to outputs based on cost drivers and related activity or usage information. Depreciation is charged on the basis of asset utilisation. Personnel costs are charged on the basis of actual time incurred. Property and other premises costs, such as maintenance, are charged on the basis of floor area occupied for the production of each output. Other indirect costs are assigned to outputs based on the proportion of direct staff costs for each output. There have been no changes to the cost allocation methodology since the date of the last audited financial statements. Critical accounting estimates and assumptions In preparing these financial statements, HRC has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Critical judgements in applying accounting policies Management has exercised the following critical judgments in applying accounting policies: Leases classification Determining whether a lease agreement is a finance or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to the HRC. Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments. Classification as a finance lease means the asset is recognised in the statement of financial position as property, plant and equipment whereas for an operating lease no such asset is recognised. The HRC has exercised its judgement on the appropriate classifications of leases and have determined no lease arrangements are finance leases.


Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2016/17

$(000)

Plan 2017/18

$(000)

Note 2 - Revenue from the Crown

Ministry of Business, Innovation and Employment (MBIE) 82,541 82,707 82,857 82,857 82,707 Ministry of Health (MoH) 285 285 285 285 285

82,826 82,992 83,142 83,142 83,992

In the absence of formal confirmation, HRC has assumed that the funding detailed about will be received from MBIE and MOH. The HRC has been provided with funding from the Crown for the specific purposes of the HRC as set out in its Output Agreement with MBIE and MoH. Apart from these general restrictions, there are no unfulfilled conditions or contingencies attached to government funding. Note 3 - Other Income Actual

2013/14 $(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2016/17

$(000)

Plan 2017/18

$(000)

Bequests and Donations received 106 0 20 20 20 Other (Management Fees) 995 587 711 667 675

1,101 587 731 687 695

Note 4- Research Grant Costs Health Research Contracts 64,184 73,202 69,527 68,470 68,470 Co-funding Relationships 2,845 640 3,213 3,691 3,760 Career Development Contracts 6,274 6,406 5,800 6,181 6,233 Vision Matauranga 1,886 1,342 1,954 2,108 2,131 International Relationships 222 280 506 550 406

75,411 81,870 81,000 81,000 81,000

Note 5 - Assessment and Council Committee Costs Meetings & Committee Costs 652 719 723 737 752 Council Costs 196 182 185 189 192

848 901 908 926 944

Note 6 - Secretariat Personnel Costs

Salaries 2,420 2,234 2,451 2,500 2,550 Contributions to defined contribution plans 258 240 240 245 250

Total Personnel Costs 2,678 2,474 2,691 2,745 2,800


Note 7 - Secretariat Other Costs Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2016/17

$(000)

Plan 2017/18

$(000)

Property Costs 298 291 300 301 305 Fees to Audit New Zealand for audit of financial statements 59 59 61 62 63 Other 631 436 698 610 596

988 786 1,059 973 965

Note 8 - Cash and Short term deposits Cash at Bank 607 650 650 650 650

Short Term Deposits Term deposits 15,357 13,168 11,812 10,430 8,841 Term deposits held on behalf of other agencies* 21,813 17,552 17,773 17,417 17,052 Term deposits Foxley Estate fund 1,777 1,862 1,967 2,072 2,177

38,947 32,582 31,563 29,912 28,070

Total Cash and Short Term Deposits 39,554 33,232 32,213 30,569 28,720

Interest rates on deposited funds in outer years are assumed to earn interest in a range from 4.00% pa to 4.50% pa. (2015 4.00% pa to 4.47% pa). *Funds are held on behalf of the other agencies pending the release of those funds to research projects that will be approved jointly by HRC and the partner.

Note 9 – Receivables

Interest Accrued 250 269 269 269 269 Prepayments 1 1 1 1 1 Other Receivables 76 91 91 91 91

327 361 361 361 361

Receivables from the sale of goods and services (exchange transactions) 327 361 361 361 361 Receivables from grants (non-exchange transactions) 0 0 0 0 0


Actual 2013/14

$(000)

Forecast 2014/15

$(000)

Budget 2015/16

$(000)

Plan 2016/17

$(000)

Plan 2017/18

$(000)

Note 10 – Payables Current

Cost Shares paid in advance 416 283 283 289 295 Accrued costs 66 70 70 72 73 GST 132 (30) (36) (37) (38) Other Payables 183 100 100 102 104

797 423 417 426 434

Non – Current Funds held on behalf of other agencies Payables under exchange transactions

14,456

797

14,456

594

14,456

594

14,456

594

14,456

594 Receivables from non-exchange transactions 0 0 0 0 0 Funds held on behalf of other agencies are interest bearing. Where funds have been committed to research contracts, payment terms are

dependent on the individual underlying contracts. Uncommitted funds are held with no payment terms.


Note 11 - Property, Plant and Equipment Office & Computer

Equipment $’000

Leasehold Improvements

$’000

Total

$’000

Cost Balance at 1 July 2013 327 111 438 Additions 18 0 18 Disposals 0 0 0 Less Scrapped/off register (18) 0 (18)

Balance at 30 June 2014 327 111 438

Balance at 1 July 2014 327 111 438 Additions 132 0 132 Disposals 0 0 0 Less Scrapped/off register 0 0 0

Balance at 30 June 2015 459 111 570


Balance at 30 June 2016 567 121 688


Balance at 30 June 2017 667 131 798


Balance at 30 June 2018 767 141 908


Accumulated Depreciation Balance at 1 July 2013 (268) (109) (377) Additions (27) 0 (27) Disposals 0 0 0 Less Scrapped/off register 18 0 18

Balance at 30 June 2014 (277) (109) (386)

Balance at 1 July 2014 (277) (109) (386) Additions (30) (1) (31) Disposals 0 0 0 Less Scrapped/off register 0 0 0

Balance at 30 June 2015 (307) (110) (417)


Balance at 30 June 2016 (344) (111) (455)


Balance at 30 June 2017 (389) (112) (501)


Balance at 30 June 2018 (438) (112) (550)

Carrying Value At 30 June 2014 50 3 53

At 30 June 2015 152 2 154

At 30 June 2016 223 9 232

At 30 June 2017 278 19 297

At 30 June 2018 329 29 358


Note 12 – Equity

Actual

2013/14

$(000)

Forecast

2014/15

$(000)

Budget

2015/16

$(000)

Plan

2016/17

$(000)

Plan

2017/18

$(000)

Accumulated surplus/deficit

Balance 1 July 8,121 12,796 11,235 9,990 8,662

Surplus/(deficit) for the year 4,675 (1,561) (1,245) (1,328) (1,540)

Balance 30 June 12,796 11,235 9,990 8,662 7,122

Foxley Reserve Fund

Balance 1 July 1,706 1,777 1,859 1,964 2,069

Surplus/(deficit) for the year 72 83 105 105 105

Balance 30 June 1,777 1,859 1,964 2,069 2,175

Total Equity at 30 June 14,572 13,096 11,954 10,731 9,296

The Foxley Reserve fund is a bequest received by the Council in 1998. The Council resolved to hold the bequest funds as the “Foxley Reserve Fund” and to support

the Foxley Fellowship from the interest earned by the fund.

Note 13 - Reconciliation of Operating surplus(deficit) to net cash flow

from operating activities

Actual

2013/14

$(000)

Forecast

2014/15

$(000)

Budget

2015/16

$(000)

Plan

2016/17

$(000)

Plan

2017/18

$(000)

Surplus/(deficit) for year 4,675 (1,561) (1,245) (1,328) (1,540)

Add non-cash items

Depreciation 28 31 39 45 50

Add/(Deduct) movements in working capital items

Receivable (increase/decrease) (9) (34) 0 0 0

Payables increase/(decrease) 1142 (539) (32) 11 11

Net cash flow from operating activities 5,836 (2,103) (1,238) (1,272) (1,479)


Information on the Organisation

Council membership

The Board of the Health Research Council meets between nine and 11 times per year. Membership of the

Board is set out in the Health Research Council Amendment Act 1991, and comprises five persons who are

or have been actively engaged in health research, and five persons who have skills and experience in areas

such as community affairs, health administration, law or management, or knowledge of health issues from a

consumer perspective.

Board Member1 Occupation

Sir Robert Stewart KNZM

Chair

Manufacturer, Christchurch

Professor Richard Beasley CNZM

Deputy Chair

Director, Medical Research Institute of New Zealand,

Wellington

Dr Matire Harwood Clinical Director, Tamaki Healthcare, Auckland

Ms Elspeth Ludemann Partner in a pastoral farming business, Oamaru

Professor Lesley McCowan ONZM Head of Department of Obstetrics and Gynaecology,

University of Auckland School of Medicine and

Subspecialist in Maternal Fetal Medicine, Auckland City

Hospital, Auckland

Professor Andrew Mercer Director of the Virus Research Unit, Department of

Microbiology and Immunology, University of Otago,

Dunedin

Dr Conway Powell Health Sector Consultant, Dunedin

Professor Ann Richardson QSO Professor of Cancer Epidemiology, Department of

Health Sciences, University of Canterbury, Christchurch

Ms Suzanne Snively ONZM Managing Director, MoreMedia Enterprises, Wellington

Professor Linda Tuhiwai Smith

CNZM

Pro-Vice Chancellor Māori, Waikato University,

Hamilton

1 Professors Ann Richardson and Linda Tuhiwai Smith have completed their term of appointment on the

Board and two new members are currently being sought.


Appendix 1: Key focus of the HRC’s Research Investment

Streams and their relationship to the performance framework

Research Investment

Stream Key Impacts Outcomes

Health & Wellbeing in

New Zealand:

Understanding the human

body and preventing

disease

A strong research focus on keeping

New Zealanders healthy & productive

High-impact, original research is

conducted & translated across the

research pipeline

Expertise is harnessed to create local

solutions to global health challenges

NZ research contributes to

international advances

1. New knowledge, solutions &

innovations for health are

created

2. The healthcare system is

improved through research

evidence & innovation

Improving Outcomes for

Acute and Chronic

Conditions in New

Zealand:

Better diagnosis,

treatment and end-of-life

care



research pipeline

Expertise is harnessed to create local

solutions to global health challenges

NZ research contributes to

international advances

Innovative health technologies &

therapies develop

1. New knowledge, solutions &

innovations for health are

created




New Zealand Health

Delivery:

Building a better, more

efficient & cost-effective

health system through

research evidence

More front-line clinicians are engaged

in health research

Research is easily accessed,

understood & applied by end-users

Research increasingly guides policy &

informs decisions

Overseas research is adapted for NZ

conditions

New Zealanders have access to new

treatments, technologies & improved

services that meet their needs

The cost-effectiveness & sustainability

of NZ's health system is improved

through research

1. New knowledge, solutions

& innovations for health are

created




3. The impact responsiveness

& uptake of health research

is increased

Rangahau Hauora

Māori:

Addressing Māori health

issues & building the

capacity & capability of

the Māori workforce



research pipeline

NZ has the research capacity to

address the needs of our unique

population

Promising emerging researchers gain

valuable research experience

Sustainable career pathways enhance

the skills of researchers & clinicians

1. New knowledge, solutions

& innovations for health are

created

3. The impact responsiveness

& uptake of health research

is increased


Glossary of Abbreviations and Terms

Bibliometrics: The study of the influence that scientific publications have in a given field. A number

of measures are used that include the relative impact factors of scientific journals, the number of

times an article is cited in other publications and the expected number of citations, based on the

world average for a particular discipline. Comparisons are made across countries and institutional

funders, but never across disciplines.

DHB: District Health Board.

HWNZ: Health and Wellbeing in New Zealand Research Investment Stream.

HRC: The Health Research Council of New Zealand.

Impacts: These are the impacts of our activities under our various Outputs, against which we have

designed performance indicators to measure our progress towards our stated Outcomes.

IOACC: Improving Outcomes for Acute and Chronic Conditions Research Investment Stream.

MBIE: Ministry of Business, Innovation and Employment.

MoH: Ministry of Health.

NZHD: New Zealand Health Delivery Research Investment Stream.

Outcomes: The benefits that our Impacts will ultimately bring for New Zealand society. These are

not directly measurable and so we track our progress through surrogate measures against our

Impacts.

Outputs: The principal services that we provide and the functions we fulfil, through which we will

achieve our impacts.

Peer review: Assessment by experts in the field in question - literally, the scientific ‘peers’ of the

applicant.

Peer-reviewed publications: Articles published in journals that employ a peer-review process for

selection, meaning that the article is thoroughly checked and challenged by scientists in the same

field (peers) before publication. There is great competition for publications space in most peer-

reviewed journals and only the best research is published. Consequently, peer-reviewed

publications are a good metric for research quality.

PHO: Public Health Organisation

Public health intervention: A programme that has been designed to improve public health, and

shown to be effective by sound research evidence. Examples include programmes to help people

stop smoking, or those aimed at preventing youth suicide.

RHM: Rangahau Hauora Māori Research Investment Stream.

Research Investment Streams (RIS): We have four RIS that collectively reflect the full spectrum of

possible health research activities in New Zealand that the HRC may support. We use these streams

to signal our priorities to the research community.

RIS: Research Investment Stream(s).

RPNZHD: Research Partnerships for New Zealand Health Delivery.

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