The Canada Revenue Agency gave Laurentian University notice in December that it would revoke LU’s charity registration if its information return were not filed within the next 45 days.
This as Laurentian, which continues to undergo insolvency restructuring, experienced delays in publishing its 2020-2021 audited financial statements and thus filling its charity information return with the CRA.
On Jan. 15, Laurentian filed its annual information return with CRA prior to the expiry of the 45-day window, appending its then current unaudited financial statements.
The audited financial statements have yet to be published.
A spokesperson for Laurentian University said in an email to Sudbury.com that “we do not have a specific date just yet regarding when these statements for 2020-2021 will be published.”
Ernst & Young, the firm acting as the court-appointed monitor of Laurentian’s insolvency restructuring, goes into detail about the situation in its 10th report, which was released late in January.
According to the Broader Public Sector Accountability Act, Laurentian is required to publish audited financial statements within six months of its fiscal year-end, which was April 30, 2021. So Laurentian’s deadline to do so was Oct. 31, 2021.
Ernst & Young noted that in exceptional circumstances, the chair of the Treasury Board can extend the date by when these documents must be publicly available.
(The court-appointed monitor, has, however, been providing some information about Laurentian’s financial situation in cash flow reports. Check out our recent story on restructuring costs at the university).
As a registered charity, Laurentian must also file an annual Registered Charity Information Return with the Canada Revenue Agency within six months of its fiscal year-end (also by Oct. 31, 2021).
In late September, Laurentian advised Ernst & Young that due to the limited resources within LU’s finance team and numerous competing priorities, including responding to the Auditor General of Ontario’s audit team, it would not be in a position to complete the preparation of its 2020-2021 financial statements and have them audited by Oct. 31.
Similarly, as the CRA return requires financial statement information and financial statements to be appended, it would be unable to complete the CRA return by the same deadline.
Given this situation, additional accounting resources from Ernst & Young were brought in to provide assistance to Laurentian’s finance team.
“Efforts continue by management to complete and finalize the financial statements. In addition, KPMG LLP, LU’s auditor, has been working with LU throughout this period to conduct the audit concurrently with the completion of the financial statements,” said the Jan. 24 monitor’s report.
“While substantial progress has been made, LU advises that additional time is required to finalize the financial statements and for KPMG to complete its audit.”
With respect to the requirements in relation to the CRA Return, Laurentian sent a letter to the Charities Directorate of CRA on Oct. 25, advising of the delay.
As mentioned above, on Dec. 3, the CRA issued a “Notice of Intention to Revoke the Registration” to LU, which provided that if the annual information return was not filed within 45 days (i.e., by Jan. 17), LU’s charity registration would be revoked.
On Jan. 15, Laurentian filed its annual information return with CRA prior to the expiry of the 45-day window, appending its then current unaudited financial statements.
“Representatives of (the Ontario Ministry of Colleges and Universities, or MCU) and the province have been continually apprised of the delay and anticipated timing for completion of the financial statements,” writes Ernst & Young. “LU’s grant funding from MCU has not, to date, been impacted by the delay.”
