Laurentian University implements nearly half of recommendations from Ontario auditor general's report

Laurentian University in Sudbury has fully implemented almost half of the more than 60 recommendations from a 2022 Ontario auditor general's report regarding its financial insolvency the year prior.

In a followup on that report, the current auditor general, Shelley Spence, said the university is also working on implementing another 30 per cent of the recommendations in the 2022 document. Little or no progress has been made on 17 per cent of the recommendations and two per cent are no longer applicable.

"The progress made to date sends a clear signal that the entire Laurentian University community — students, staff, faculty, labour partners, the board of governors and the university senate — has come together to do the important work of implementing these recommendations," Laurentian president Lynn Wells said in a statement.

In February 2021, Laurentian's administration made the unprecedented move, for a publicly funded Canadian university, to seek protection from creditors under the Companies' Creditors Arrangement Act (CCAA).

Laurentian was able to continue operating after filing for insolvency, but ended up cutting 195 jobs and 76 programs in the process.

In her 2022 special report on Laurentian, then Auditor General Bonnie Lysyk outlined more than a decade of financial mismanagement that eventually led to the university's insolvency.

"The poor management of the university's financial affairs and operations was allowed to continue because of weak board governance and ministry oversight," Lysyk said at the time.

From 2009/2010 to 2019/2020, for example, Laurentian pursued six major capital projects that cost $168 million without adequate evidence or analysis to justify the investments, according to Lysyk's report.

In her report, Lysyk made a number of recommendations to Laurentian, Ontario's Ministry of Colleges and Universities and the Office of the Integrity Commissioner of Ontario to ensure no other university would find itself in Laurentian's position.

The recommendations to Laurentian focused on financial accountability and transparency.

In her followup report, Spence said Laurentian fully implemented some recommendations such as preparing budgets on the same basis as its consolidated financial statements and imposing several changes to its board of governors.

Those changes to the board included new term limits for all board members, a new conflict of interest policy and establishing a "board skills matrix" so people with relevant skills are brought onboard.

Spence said many of the recommendations Laurentian hasn't made progress on are related to capital planning.

She said in her report that Laurentian has a 15-year loan agreement, through the CCAA, that prevents it from incurring capital expenditures of more than $10 million without approval from the Ministry of Colleges and Universities. That has hampered its ability to move forward on some capital projects.

Laurentian does have a five-year capital plan to address deferred maintenance on some of its buildings, but it doesn't yet have a longer term capital plan, Spence added.