Ontario's auditor general is bringing Laurentian University to court to gain access to confidential or privileged documents needed to conduct a value-for-money audit of the school’s books.
An application was made by Auditor General Bonnie Lysyk regarding the matter with the Ontario Superior Court of Justice on Sept. 29.
In the wake of Laurentian declaring insolvency last winter, the Standing Committee on Public Accounts of the Legislature of Ontario passed a motion April 28 requesting that the Auditor General of Ontario (AGO) perform a value-for-money audit of LU for the period 2010-2020.
Ernst & Young, the court-appointed monitor of Laurentian’s insolvency restructuring, talks about the situation in its latest report, filed Sept. 28.
Since the audit was announced, Laurentian has received extensive information requests from the auditor’s office.
“The monitor notes that given the extensive nature of the information requests and LU’s limited resources, the process of responding to the information requests has taken a considerable amount of time and effort,” said the monitor’s report.
In addition, AGO staff have met with a number of LU employees and directors, visiting the campus on more than one occasion and spending several days on site.
Laurentian has co-operated with the AGO’s investigation, “and has made considerable efforts to respond to the AGO’s information requests, including producing significant volumes of information and providing the AGO with direct access to financial accounting and other systems,” the Ernst & Young report said.
“This has also involved external counsel assisting LU with a review of privileged documents and to ensure that disclosure of information does not breach any orders issued by the court in this proceeding.”
The report said that “with the exception of documents subject to privilege or court-ordered confidentiality, LU continues to provide the AGO with all requested documents.”
However, the AGO has taken the position that under Section 10 of the Auditor General Act, it is “entitled to privileged documents, including those that are subject to solicitor-client privilege, settlement privilege and documents subject to court-ordered confidentiality.”
Laurentian “disagrees with this position,” said the monitor.
Lysyk echoes these comments in her affidavit, filed with the courts in relation to the matter.
“Laurentian University of Sudbury disagrees with my interpretation of Section 10 of the Auditor General Act, and has consistently denied my office access to its privileged information and records,” Lysyk said.
She said Section 10 of the Auditor General Act “imposes a duty on a grant recipient to give information and records to the Auditor General.”
The AGO has “consistently advised” Laurentian that the Auditor General Act provides the AGO with “right of access” to Laurentian’s privileged information and records.
Laurentian University president Robert Haché posted a statement about the situation on the university website dedicated to Laurentian's insolvency filing Sept. 30.
"Laurentian respects the Auditor General’s mandate, and has granted her office direct access to our entire financial database, enrollment system, and all non-privileged documents requested," the website site.
"No Ontario court has ever ruled on whether the Auditor General can compel audit subjects to provide privileged information between lawyers and their clients. After agreeing not to seek privileged information, the Auditor General now seeks a ruling on that issue, and we will abide by that ruling. Until then, we will continue to provide any other non-privileged information. We remain committed to becoming a fully restructured, financially viable, and renewed Laurentian University."
Due to this dispute, the two parties attended a Sept. 27 case conference with Chief Justice Geoffrey Morawetz, the judge who has heard most matters related to Laurentian’s insolvency.
Morawetz endorsed a timetable for the courts to hear an application for an interpretation of the Auditor General Act in relation to this matter.
That timetable says the hearing date is to be set Dec. 6.