Laurentian University says it has hired external financial advisors Ernst & Young to assist in a review of its finances in light of a $7 million structural deficit, as well as the $5 to 10 million impact of the pandemic to date.
The university put out a brief press release Thursday about the hiring of the financial advisors. We asked for an interview with Laurentian administration to get more information, but the university declined our request.
They did release an additional, very succinct, email statement.
“Laurentian has been transparent that we are facing some financial challenges, some historic and some brought on by COVID-19,” said the email statement.
“We have retained Ernst & Young, as advisors, to assist us in a further review of our financial results, budgets and various initiatives to help us identify and analyse additional opportunities for cost savings or improvements.”
The university’s press release said it has worked hard to address the financial challenges brought on by the global COVID-19 pandemic and its pre-existing structural deficit.
This past spring, Laurentian announced it was expecting a $6 million deficit for 2019-2020, and said its shortfall could rise to $15 million potentially by the end of 2020-2021, due to the pandemic and provincial cuts.
Amid these financial problems, the university also announced the suspension of 17 programs this past summer, citing low enrolment, although university faculty have attempted to block the suspensions.
Laurentian University Faculty Association (LUFA) secretary-treasurer Jean-Charles Cachon said he thinks hiring external financial advisors is a good idea.
“I think it’s a good sign that there is some interest in finding out further ideas in terms of getting out of the current financial conundrum, basically,” Cachon said.
The union rep contends Laurentian’s financial problems stem from debt incurred by new buildings put up on campus.
“When these expenses were incurred, we were promised that none of that would spill over into the operations budget, and now it does,” in terms of interest payments, Cachon said.
He said LUFA hired experts from the University of Manitoba to analyze Laurentian’s publicly available financial data.
“And according to those data, the situation was in fact worse in 2016, before everything was considered as a terrible situation,” Cachon said.
“If we look in terms of constant dollars, what was going on four years ago, the situation actually was worse in terms of debt and the proportion of debt relative to the assets of the institution.”