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‘Tough findings’: Consultant zeroes in on poor financial management at insolvent Laurentian U.

Consultant Nous Group says Laurentian’s ‘budget management, financial processes and reporting lack rigour’
Laurentian University.

Reports authored by outside consultants outlining recommendations to guide the transformation of insolvent Laurentian University in years to come were publicly released by the university Wednesday.

You can read the reports on Laurentian’s operations and governance by the firm Nous Group here.

Laurentian engaged the services of Nous Group to look into its operations and governance as it continues to undergo insolvency restructuring.

Just before these reports were released publicly, Laurentian University president Robert Haché, along with Kelly Rowe of Nous Group, held a Zoom call with nearly 400 members of the Laurentian community to provide an overview of the reports.

Nous Group’s Rowe, who led the review under the direction of Laurentian’s chief redevelopment officer and the court-appointed monitor of LU’s restructuring, told those on the Zoom call that to be blunt, “these are tough findings.”

“Obviously, when you conduct a review like this, it's not all sunshine and roses,” she said, “There's a lot of hard realities that are exposed. But congrats to the institution for wanting to move forward with it in the first place. We think it does really provide you with kind of a path forward over the next few years.”

A press release issued by Laurentian said at the operational level, the reports propose a transformation program to improve operational efficiency focused on seven core areas including strategy, service delivery, financial performance, structure, processes, technology and digital platforms, as well as capability and capacity.

This transformation program would last three years to start, but could last longer, Rowe said. Nous estimates the transformation program will cost $26 to $32.5 million.

Other recommendations call for development of a new strategic plan; consolidation of all student services to improve student satisfaction and retention; implementation of new financial planning, budgeting and reporting practices; restructuring of administrative functions with clear lines of authority and accountability; simplified, standardized and automated processes and new enterprise processes for risk and records management; priority investments in digital tools and capabilities; and attracting new capabilities by drawing from a broad talent pool and addressing understaffed units.

At the governance level, there are 37 recommendations to improve the university’s governance at the board and senate, including adjusting its bicameral model to improve information flow between the two bodies. 

Additional recommendations call for each governing body to establish a clear mandate and set of accountabilities, ensure the right composition and capabilities are in place, and adopt appropriate structures and processes, including establishment of a professional secretariat.

Regarding the university’s finances, obviously LU is in a “significant financial situation,” and Rowe said there’s “a wholescale kind of a rethink that needs to be done around how you approach planning, planning, budgeting, forecasting, reporting, etc.”

The report said that Laurentian’s “budget management, financial processes and reporting lack rigour," and have likely contributed to Laurentian’s insolvency.

“Financial frameworks, policies and revenue strategies are outdated or missing. Immature budget planning and management tools and capabilities hinder financial performance and effective decision-making.”

As part of Laurentian’s “transformation” over the next three years, the report said there “should be an implementation of new financial planning, budgeting and reporting practices, and new controls, to increase the maturity of the finance function and support improved performance.

“Working with the board to update and establish policies and financial procedural rules is a first step to improving financial management.”

Laurentian’s current strategic plan, which was to bring the university through until 2023, is obviously dated because of the changes made at LU over the past year as it has undergone insolvency restructuring, Rowe said. 

The university is under orders by the province to begin consultations for a new strategic plan.

Nous Group found that the previous plan had a large number of goals that were difficult to measure, reporting didn’t seem to be full, and they were unable to see how that plan cascaded throughout the entire organization.

Within the new strategic plan, the report said “goals must be specific, measurable, achievable, mission-aligned, and timebound. Outcome accountability must be assigned to specific university leaders.”

Rowe said the Nous team looked at possibly recommending Laurentian move from the bicameral governance structure (which consists of the board of governors, which is responsible for the university’s finances, and senate, responsible for academic policy) to a unicameral governance structure (which merges the two into one governing body).

She said in Canada, only the University of Toronto is governed in this fashion. However, they recommended Laurentian stay with the bicameral model for now, although there’s a “maturing of governance” that needs to happen at Laurentian.

The governance report said that with respect to Laurentian’s board of governors and senate, “when ambiguity or overlap occurs in written mandates or in practice, it should be corrected immediately.”

A press release issued by Laurentian said as a next step, LU will be discussing the recommendations with stakeholders including determining the source of funding to execute the transformation.  

As Laurentian moves through this process in collaboration with key university and community stakeholders, including its faculty and employees and creditors and in partnership with the Ontario government, it will provide regular updates on progress, the press release said.

“We are confident that implementing these recommendations will allow the University to make the necessary changes to ensure the appropriate governance and operational frameworks are in place to best serve the needs of Laurentian’s future students,” said Lou Pagnutti, Laurentian’s chief redevelopment officer, in a press release.

“While there will be challenges as Laurentian executes this ambitious and long-term transformation, the university is focused on whatever needs to be done to make Laurentian the best environment it can be for its students. The report serves as a roadmap to success – and the university is dedicated to renewing Laurentian as the proud institution our community deserves.”

Laurentian’s president, as well as the interim chair of its board of governors, also provided written statements on the release of the Nous reports.

“Laurentian University is committed to making the necessary changes to ensure we have the processes, functions, equipment, training and personnel to support financially sustainable operations,” said Laurentian president Robert Haché.

“Some of the changes will advance immediately, while others, including an update of the university’s IT and other systems,will require new funding. While we have much hard work ahead, I believe this transformation will reclaim Laurentian’s role as a bilingual, tricultural brain gain for the North for generations to come.”

“This Board of Governors will take the necessary steps to carry out the work required for a higher degree of review, accountability and oversight by the board, continuous renewal and training, and a deeper and more diverse skill set of its members,” said Jeff Bangs, the interim president of Laurentian’s board of governors.

“We look forward to working with management, the Senate as our academic governance partner, our labour partners LUSU and LUFA, and our broader community to ensure that we follow best practices in our governance structures and processes to better serve our students and community.”


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Heidi Ulrichsen

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