Tom Fenske said he felt a “roller-coaster” of emotions in reading Ontario Auditor General Bonnie Lysyk’s special report on Laurentian University, from vindication to anger and frustration.
The president of the Laurentian University Staff Union (LUSU) shared his thoughts on the report with Sudbury.com as he took a break from reading the exhaustive 117-page document, which was released Nov. 17.
The auditor general was tasked with a value-for-money audit of Laurentian University’s finances by the legislature’s Standing Committee on Public Accounts last year.
This was in the wake of Laurentian becoming the first publicly funded university to seek creditor protection under the CCAA when it filed under the federal law on Feb. 1, 2021.
Laurentian now expects to finally exit CCAA proceedings this month after reaching a debt plan - known as a plan of arrangement - with its creditors earlier this fall.
Fenske said the vindication comes in because Laurentian had suggested that a significant cause of its financial decline was labour costs, specifically faculty.
But Lysyk said her audit team found that Laurentian’s overall faculty costs did not surpass those of comparable universities, and that the costs associated with LU’s senior administration climbed by about 75 per cent between 2010 and 2020.
Lysyk also pointed to poorly planned and costly capital expansion and modernization as the main cause of Laurentian’s financial decline from 2010 to 2020.
She said as the university began to amass more than $87 million in debt to pay for this capital expansion, the senior administration exacerbated the situation by making a series of questionable financial and operational decisions, including amending its internal policies to allow it to incur even more debt and increasing its senior administration’s costs.
The report said to remedy the long-standing financial situation, senior administrators and the Board, guided by external legal counsel, strategically planned and pursued restructuring under the CCAA, an action Lysyk said was unnecessary and costly.
“It wasn’t labour cost, it was the senior administration and the mismanagement of funds,” Fenske said.
In terms of anger and frustration, Fenske said what happened with the Retiree Health and Benefit Plan (RHBP) comes to mind.
Lysyk outlined how Laurentian failed to keep RHBP funds protected in a distinct trust, instead commingled these funds with Laurentian’s general funds.
Following the CCAA process, current and former employees who paid into the retirement benefits plan for years, or even decades, may not get back their contributions or over-contributions, or have access to these health benefits.
It’s “emblematic of everything that's gone wrong here,” Fenske said, reiterating that Laurentian’s unions plan on taking court action against the university regarding the RHBP, targeting its directors and officers insurance plan.
Another tidbit from the report that Fenske brings up is that select senior administrators were given access to $2.4 million in discretionary expense accounts without a policy outlining what these funds could be spent on.
Lysyk also said Laurentian exceeded compensation limits for senior administrators, modifying their titles to skirt the rules.
“You see some of the examples that are in there, and it's infuriating,” he said.
Speaking for LUSU, Fenske said his union “intends to hold the university accountable” for implementing the recommendations in Lysyk’s report.
He said there potentially should be a full inquiry into the situation.
The “administrators who caused this crisis” should be held accountable, Fenske said. He said his union will also be looking into complaints of negligence for those who failed at LU, if they belong to specific professional regulatory bodies.
Fenske also had some thoughts to share about Dominic Giroux, Laurentian’s president from the years 2009-2017, which covers the majority of the years Lysyk’s audit team was examining. Giroux is now the president of Health Sciences North, Sudbury’s hospital.
He said that based on the report, it’s clear that Giroux “wanted to do the things the way he wanted to do them” without following proper procedures.
Laurentian University released a statement Thursday saying that it embraces the auditor general’s findings, and plans to implement her recommendations and make sure these mistakes are never repeated.
Jeff Bangs, who’s been the university’s board chair since last December after a shake-up on the board at the insistence of the province, told Sudbury.com following the report’s release that he finds it “informative” and “helpful.”
“It clears the air on many, many issues,” he said, adding that he’s been working with Lysyk to answer some of the tough questions she’s had over the past six months or so.
Regarding the angry reaction to the report by some in the community, Bangs said he recognizes the CCAA process was hard on many people, “and in many ways unfair.”
“We have to recognize that those people still have very strong feelings, and we have to respect that,” Bangs said, adding that his job is to “find the path forward,” and that includes a “change in culture” at LU, and bringing people to the table who have felt left out.
Nickel Belt MPP France Gélinas said the report shows the bad decisions that “Dominic” (former LU president Dominic Giroux) made, as well as the university’s board of governors.
But she also reserves criticism for the Ministry of Colleges and Universities, which had what she termed a “lack of urgency” about the situation.
The ministry was first informed in August 2020 that LU was considering a CCAA filing, something that eventually came to pass in February 2021.
“Like, they had a few months,” Gélinas said. “But nobody understood the severity or didn't react in a way that was in line with the severity of what was about to happen.”
Lysyk’s report offers recommendations not only to Laurentian, but for what the province should do differently regarding the broader post-secondary sector.
Gélinas said she’s had the chance to speak to her colleagues with the governing Progressive Conservatives, and they’re keen to make these changes.
Sudbury.com reached out to the Ministry of Colleges and Universities, and received a written response from a spokesperson for Ontario Minister of Colleges and Universities Jill Dunlop.
“We have received and will examine the Auditor General’s report on Laurentian University’s financial situation,” said the statement.
“As an immediate step, we are implementing a robust reporting and risk framework to identify institutions that are experiencing financial strain. This new reporting structure is designed to strengthen the ministry’s oversight and ensure proactive reporting before an institution reaches a point of financial distress.
“We will continue to work with Laurentian to support their path to sustainable operations as they exit the CCAA process. Our government is making sure that students get the support they need and helping Laurentian University chart a course for success.”
Although some people in the community are calling for a public inquiry on Laurentian’s journey under the CCAA following the release of the report, Gélinas said her questions have been answered.
The MPP is a member of the public accounts committee that commissioned the report in the first place.
“We know what led Laurentian to this disastrous path,” she said. “They did not have to go down the CCAA path, they chose to go down this path. Let's make sure that no other university is ever allowed to do that ever again.”
Heidi Ulrichsen is Sudbury.com’s associate content editor. She also covers education and the arts scene.
