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Donors wondering where their money went amid Laurentian’s insolvency

‘I’m angry about it,’ said retired prof Bill Crumplin, who wonders about the status of funds for a scholarship he set up in his late wife’s name

A retired Laurentian University professor who set up a scholarship for students in his late wife’s name is one of several people who have spoken out recently because they’re concerned about the fate of their donations amid LU’s insolvency.

Bill Crumplin, who retired as a Laurentian environmental studies professor last year, set up the scholarship through Laurentian’s development office in memory of his wife, Donna Williams, after she passed away in 2016.

The scholarship provides $1,000 per year to a woman in the environmental studies program who is involved with the community. 

Crumplin estimates there was about $10,000 in the fund, although he was aiming to eventually get the fund to about $25,000 so it would be self-sustaining.

But with Laurentian announcing its insolvency earlier this month and entering restructuring under the Companies’ Creditors Arrangement Act, Crumplin said he suspects the money is probably already gone.

“I just don’t know how all that money comes back, if it’s possible to come back,” he said.

“It’s very frustrating, very disappointing. I’m angry about it. I wish there would be something said. This process seems to make the university completely untouchable. That is very frustrating.”

Crumplin said he wrote to the development office Feb. 11, asking what was going on, but nobody has gotten back to him.

A report by Ernst & Young, the consultants appointed by the courts as the monitor as Laurentian goes through the CCAA process, sheds some light on what has happened with donations to the university. It’s similar to what has happened with research grant funds.

The report said that all receipts, whether for operations (i.e. operating grants, tuition and ancillary revenue) or for restricted or designated purposes (i.e. research grants, designated scholarships etc.), were deposited into the same bank accounts and effectively co-mingled. Donations, both unrestricted and restricted, were initially received into a separate bank account but were then transferred to the operating accounts and co-mingled. 

(Restricted funds refer to a reserve of money that can only be used for specific projects or purposes, such as for a scholarship). 

All disbursements, whether on account of operations or in connection with activities funded by restricted funds, were paid from the operating accounts.

There were no separate bank accounts set up to receive and hold restricted funds. All funds available in the operating accounts were utilized prior to drawing on lines of credit.

Ernst & Young said it understands that it is not uncommon for universities to deposit research grants and other restricted funds into their main operating account. 

In most cases, these universities have sufficient cash reserves to cover obligations associated with these items. 

However, in LU’s case, as a result of its historical deficits and other issues, the funds held by Laurentian as of earlier this month was insufficient to cover obligations in connection with these restricted funds.

Laurentian’s cash management practices were changed in December after they were brought to the attention of LU’s president and the matter was discussed with the board. 

Segregated bank accounts have now been set up, including for donations. Only unrestricted donations are to be transferred to the operating accounts. Restricted donations are to be transferred to the newly-created Restricted Funds Account.

New endowment contributions will be transferred to the investment account that currently holds endowment funds, said the report.

A website dedicated to Laurentian’s insolvency addresses several questions about donations to the university.

Responding to the question “What has happened to my donation,” the university provided the following response:

“Laurentian is currently reviewing and reconciling all donations it has received, whether they were donated for a specific purpose (restricted) or for general use (unrestricted). The Pre-Filing Report of the Monitor provides further information regarding the status of endowments and donations.”

In response to the question “I created an annual award. Was the last round issued to students, and will it continue to be available to students?” the university says the following:

“The Court Order that Laurentian University obtained from the Court included specific protections for current students who are recipients of bursaries, scholarships and awards, to allow them to continue to receive them in the ordinary course.”

And the question “What would happen to my funds if I were to make a donation today?” has this response:

“Donations that are made from and after mid-December 2020 which are designated to be used for a specific purpose (as compared to those that are general and unspecified) will be processed by the Advancement Office and Finance and placed in a separate, segregated bank account for that purpose. These arrangements were confirmed and approved by Court Order.”

Another person who has been raising questions about the status of donations to the university is Stacey Zembrzycki, a former Sudburian who led efforts to raise funds for Laurentian’s varsity swim team.

These donations were actually made more recently, so based on the information above, it’s possible they could be sitting in the aforementioned segregated bank account, but Zembrzycki said she hasn’t received any answers either.

Alumni LU varsity swimmers on a Facebook group run by Zembrzycki, who swam for Laurentian between 1997 and 2001, raised about $7,800 in November and December for the team to help defray its expenses.

The money was given to the university’s development office, and specifically earmarked for the swim team.

The Jeno Tihanyi Olympic Gold Pool at Laurentian has been closed since March 2020 (the university initially said this was due to COVID-19, but later said it’s because the athletic complex needs millions in repairs).

The varsity swim team has been practising at a city pool in Hanmer, and Laurentian had been paying the bill, but when the university’s insolvency hit, the team got the news that LU would no longer cover those costs.

Zembrzycki said the coach reached out to the development office to see if he could access the recently-donated money to pay for the pool time.

They only received a brief reply from the office saying no answers were available at that time, and referring them to the Laurentian website providing information about the insolvency process. They haven’t heard anything from the development office since.

“We just want some answers for the university, and all the donors are owed that,” Zembrzycki said.

Some of the students on the swim team are in Sudbury because of their athletic commitments when they could be attending Zoom classes in their home communities.

One of the athletes is hoping to participate in the Olympic trials amid COVID-19 and the issues surrounding Laurentian’s insolvency.

“The money was there to support them most of the way through, and now we don’t know where it is,” she said. “We would like to know.”


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