KPMG, the auditors of Laurentian University’s books for at least the past 15 years, continues as the university’s auditors, although more senior people with the company have taken charge of the file in the wake of Laurentian’s financial woes.
Laurentian is still undergoing court-supervised restructuring under the Companies’ Creditors Arrangement Act (CCAA) after declaring insolvency last winter. It is also currently undergoing a value-for-money audit by the Ontario Auditor General’s Office.
The university had $321.8 million in liabilities as of April 20, 2020, and currently owes three Canadian banks $91 million.
The auditors were reappointed during an in-camera portion of the June 18 Laurentian board of governors (BOG) meeting.
Minutes from BOG meetings, including motions passed in-camera at the June 18 meeting, were included as part of the package for the more recent Oct. 29 meeting.
The matter also came up more recently at the Nov. 17 Laurentian senate meeting, where Laurentian senate appointees to the Laurentian BOG gave a report of the board of governors’ activities.
Laurentian University, along with most other universities in Canada, operates under what’s called a “bicameral” structure. That means financial decisions are made by the board of governors, and decisions about academic programs are made by the senate.
The minutes of the June 18 BOG meeting say the motion to reappoint KPMG as auditors for the financial year ending April 30 was moved by board member Peter Faggioni and seconded by Peter Xavier.
The full motion is as follows:
“Whereas, KPMG LLP was appointed, through a Request for Proposal process, auditors of Laurentian University for five years from April 2014 to April 2018, with reappointment options for April 2019, April 2020 and April 2021; and Whereas, during the process of restructuring under the Companies’ Creditors Arrangement Act (“CCAA”), the incumbent Auditor is reappointed to continue providing an audit opinion on the Financial Statements;
“Be it resolved that the Board of Governors approve the appointment of KPMG LLP as auditors for the year ending April 30, 2021 on terms acceptable to the university, as presented and amended at its meeting of June 18, 2021.”
When asked about the situation at the Nov. 17 Laurentian senate meeting, university president Robert Haché said there was an “extensive conversation about the appointment of the auditors for the university this year.”
He said it was Ernst & Young, the court-appointed monitor of Laurentian’s insolvency restructuring, that impressed how unusual it would be to change auditors in the middle of the CCAA process.
“However, I don't want to leave senators with the impression that there has been no change,” Haché said. “The university’s audit had been previously performed by a local partner for KPMG. In recognizing that the situation that we’re currently in, and the additional challenges that it presents, (KPMG) have provided their national post-secondary education partners to lead the audit for the university for this year.
“So ultimately, the board decided not to change the audit firm because of a variety of difficulties in handing over in the middle of the CCAA, but we’re reassured by the steps and what KPMG has proposed in order to ensure that they have their very best people on this audit for the university this year.”
