“... If one is doing the right thing for the public good, transparency comes easy.”
That is the final sentence in Auditor General Bonnie Lysyk’s preliminary report on Laurentian University’s insolvency.
She says a lot in those few words.
Thanks to Laurentian’s “unprecedented” (in Lysyk’s words) near-refusal to play ball with the AG’s office, the full report will not be released prior to the dissolution of the Legislature in advance of the June provincial election.
The eight pages Lysyk did release, however, paint a very troubling picture of a secretive organization inexpertly led by managers pursuing poorly defined goals without a clear understanding of where they were heading or why, or how they were going to pay for it.
It is a picture of an organization that spent almost a decade crafting a fiction that all was right and well with the world, while scrambling in the background to try to make that fiction a reality.
It is a picture of an organization that appears to have created boogeymen out of its own faculty and birthed the red herring that excessively high remuneration of professors and an intransigent senate were a big factor in its financial woes.
In fact, Lysyk said even as LU’s administration pointed blaming fingers at faculty costs, which were actually found to be in line with other comparable universities, it was rewarding itself with high salaries and perks to the tune of $4 million a year by 2018, which “negatively impacted” the school’s financial position.
And then, when the chickens came home to roost and LU’s tenuous position was on the verge of collapse, Lysyk said current president and vice-chancellor Dr. Robert Haché avoided assistance from the province in favour of deliberately pursuing insolvency, a scheme that allowed them to tear up collective agreements, circumvent the senate and use the court to prevent anyone from peeking behind the curtain.
It is, in short, a picture of two organizations: the one the public saw, a healthy and growing university community with a bright future, the jewel in Northern Ontario’s post-secondary crown; and the one that seems to have been hidden from public view, an organization desperately juggling its myriad financial obligations while walking a tightrope.
If Lysyk’s findings can be taken at face value, the true Laurentian University was operating in the shadows.
“We determined that the primary cause of the university’s financial deterioration from 2010 to 2020 was its pursuit of poorly considered capital investments”
If true, this finding flies in the face of everything Laurentian’s current and past leadership has been saying for nearly a decade. A joint letter signed by three past board chairs and a former president blamed a “perfect storm” of events for the financial problems, including the failed attempt to start a campus in Barrie, a tuition freeze and funding cut, and the COVID-19 pandemic.
Piffle, says Lysyk.
Whereas the period from 2010 to 2017 or so appeared to be heady days for Laurentian University with new buildings constructed and opened, large capital investments announced, and a campus modernization plan and new strategic direction unveiled, the auditor general’s analysis is not so rosy.
While Laurentian administrators were cutting ribbons on new buildings and smiling for the cameras, Lysyk says the senior executives who conceived these massive, multi-million-dollar plans did little more than think big — they did not actually put in the time to test if their big ideas made financial or operational sense. And there were no protocols in place, no checks and balances, to ensure the people running Laurentian were being good stewards.
The school was running deficits at least as far back as 2014, and yet presented balanced budgets every year until 2018 when it recorded a $4.4-million shortfall. So much for transparency. So much for checks and balances.
That they gambled the university’s future on a “build it and they will come” approach to enrolment seems the height of arrogance. Did it not occur to any of these people their gamble could fail?
“The poor management was allowed to continue in large part because of weak oversight by Laurentian’s board”
Boards of directors or boards of governors serve a valuable purpose: they are to provide the checks and balances an organization needs to ensure its managers act responsibly.
Lysyk’s criticism questions whether LU’s board of governors — influential and powerful people drawn from Sudbury’s upper echelons — and its committees (particularly the Audit Committee), were providing the oversight required of them or whether they were simply padding their CVs with a plum appointment.
If we accept Lysyk’s findings, each member from every incarnation of the board from 2010 to 2020 must bear some responsibility, but it is the people who chaired those boards who must bear the brunt of the AG’s critique, because they were in charge.
Lysyk does not name these board chairs in the preliminary report, but we will: Floyd Laughren (2010-2013), Michael Atkins (2013-2016, the former owner of Sudbury.com and a current board member of our parent company, Village Media), Jennifer Witty (2016-2019, now vice-president of people relations and corporate affairs at HSN) and Claude Lacroix (2019-2021, part of a slate of 11 governors who resigned in December).
Minus Lacroix, this is the same group who sent the ‘perfect storm’ letter to the province. Prior to that letter being made public, Sudbury.com reached out to each of them seeking interviews — we were either rebuffed or ignored.
If any of them decide to open up, phone lines are open.
Even if board members were kept in the dark by the administration about how bad things truly were, the governors were duty-bound to provide the checks and balances demanded of them and, in Lysyk’s view, they failed, helping usher Laurentian right to the edge of the cliff of ruin.
Lysyk does not ignore the Ministry of Colleges and Universities either, which she says did not intervene as Laurentian was faltering and failed in its duty to monitor the university’s financial well-being.
“We also found there was poor management of the university’s financial affairs and operations”
And now we arrive at Dominic Giroux, a man who is also not named in the preliminary report. LU’s former superstar president and vice-chancellor earned awards and accolades (such as this one) for the school’s bold expansion plans during his tenure from 2009 to 2017.
Ultimately, the buck has to stop with him. As Giroux was stepping into his new role in 2009, the then board of governors approved “A Plan for Regaining Sustainability at Laurentian University,” a title that suggests things were not rosy even back then, recommending LU needed to reduce costs.
Did Giroux do that? No.
In fact, he did the exact opposite, embarking on the massive expansion and modernization plan that saddled Laurentian with more than $87 million in long-term debt, millions in short-term debt and, ultimately, hundreds of millions in liabilities.
In fact, the financial picture is even worse than that, Lysyk points out, because to help fund the expansion, Laurentian’s board allowed Giroux and his executive team to defer care and maintenance of its existing infrastructure.
So now, on top of what it owes to creditors, Laurentian has an infrastructure deficit of $135 million, an amount that grows everyday repairs are not done.
Is this the kind of bold leadership Giroux’s awards and accolades suggests he provides?
If we accept Lysyk’s findings that there was a serious lack of transparency at Laurentian, one of the few people who would have had the full picture of the university’s financial woes was Giroux, a man who now commands a $381,759 a year salary as CEO of Health Sciences North.
In Lysyk’s analysis, he is not the superstar president he appeared to be.
We started this journey with a simple sentence: “... If one is doing the right thing for the public good, transparency comes easy.”
Laurentian is an institution that helped foster the regreening of the Nickel City’s moonscape, an institution that helped secure Sudbury’s position as a centre for mining excellence and innovation, a school that has churned out some incredible graduates who have gone on to make amazing contributions to Sudbury, to Ontario and to Canada.
The people we have named in this editorial have not addressed the findings Lysyk’s audit lays on them, but the auditor general believes the data shows their decisions almost led to the destruction of one of this city's greatest contributions to the fabric of the North.
Each of them owes an explanation to the citizens of Greater Sudbury and Northern Ontario, and in particular to the hundreds of faculty and students directly impacted by the near-collapse of Laurentian University.
And each of them owes all of us an apology.
Sudbury.com's editorial opinion is determined by an editorial board made up of senior staff.