Audit says Laurentian’s devastating bankruptcy ‘intentional’

Laurentian University intentionally subjected its faculty and students to the devastating programme and job cuts of bankruptcy after its leadership rejected offers of aid from the Ontario provincial government, a provincial audit has concluded.

The audit, coming a year into the bankruptcy and compiled despite the university’s refusals to cooperate with it, prompted nationwide and provincial faculty associations to call for the immediate resignation of the university’s president, Robert Haché, and his leadership team.

The university did not directly answer that suggestion, although it issued a contrite statement welcoming the audit, promising to take actions in response to it, and noting the situation ultimately will require “essential changes within the institution”.

“Laurentian is absolutely committed to seeing this transformation to completion,” the university said in the statement, attributed to Jeff Bangs, a longtime operative in Ontario’s governing Progressive Conservative Party and a former Laurentian consultant who became interim head of the institution’s board of governors after widespread resignations last year.

Laurentian last year became the first publicly funded university in Canada to file for creditor protection, stunning the northern Ontario city of Sudbury with its sudden acknowledgment of deep financial woe. In the turmoil, the campus lost about half of its 9,000 students and more than a third of its programmes, fired around 200 of its faculty and other staff, and saw its high school applications drop by nearly half. It also hurt three co-located institutions by abandoning affiliations they needed to operate.

Laurentian leaders in recent months resisted calls from the Ontario auditor general, Bonnie Lysyk, for documents that would help her figure out what happened, and the provincial legislature eventually stepped in to demand their compliance.

Ms Lysyk calls her report to lawmakers preliminary, explaining that the “unprecedented legal pushback from Laurentian” to her inquiries delayed her work to the point where she could issue only an interim assessment before the current legislative session ends.

In it, she affirms many widely suspected details, including the sense that Laurentian got itself into financial trouble not so much because of governmental disinvestment, but because of a decade-long campaign of campus expansion in which university leaders misjudged the potential student demand.

Laurentian’s leaders then took steps to hide the severity of the problem from the public and the board of governors, and intentionally chose the pathway of bankruptcy early last year rather than accept offers of aid from the provincial government, Ms Lysyk writes.

The auditor general also notes that Laurentian’s spending on senior administrative staff jumped 75 per cent between 2010 and 2020, even as the administrators were complaining publicly about faculty costs. The administrators tried to cover the costs of the capital projects by quietly reallocating money intended for research and employee health benefits, she says.

The audit confirms that Laurentian leaders figured out their mistakes and, rather than admit them, “doubled down on secrecy and spent months planning how they would dismantle the university through” the bankruptcy process, the Ontario Confederation of University Faculty Associations said in a statement from its president, Sue Wurtele.

The executive director of the Canadian Association of University Teachers, David Robinson, called the findings “absolutely scandalous” and “a damning indictment of Laurentian University’s administration”.

Both groups urged resignations throughout the top leadership layers at Laurentian.

Ms Lysyk also faults Ontario’s Ministry of Colleges and Universities for failing to keep a close eye on Laurentian’s operations. A better example, she says, came in 2014 when Nipissing University “was facing financial struggles that were by some measures worse than Laurentian’s”. In that case, she said, the ministry provided key guidance to Nipissing and the university managed to recover.

But even if the ministry had kept better track of Laurentian, the auditor general warns, the provincial legislature has not given it the power to compel changes that it may believe necessary.

paul.basken@timeshighereducation.com