“Difficult conclusions”: a consultant focuses on the financial mismanagement of the insolvent Laurentian University.
Consultant Nous Group says “budget management, financial processes and reporting lack rigor” at Laurentian
Reports by outside consultants outlining recommendations to guide the transformation of the insolvent Laurentian University in the years to come were released by the university on Wednesday.
You can read reports on Laurentian’s operations and governance by Nous Group here.
Laurentian has retained Nous Group to review its operations and governance as it continues to undergo insolvency restructuring.
Just before these reports were made public, 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.
Rowe of Nous Group, who led the review under Laurentian’s director of redevelopment and court-appointed monitor of LU’s restructuring, told those on the Zoom call that to be frank , “these are difficult conclusions”.
“Obviously when you do a review like this it’s not all sunshine and roses,” she said, “there are a lot of harsh realities that are exposed. But congratulations to the institution for wanting to move forward with it in the first place. We think that really does offer you some sort of path to follow over the next few years.
A press release issued by Laurentian indicates that at the operational level, the reports propose a transformation program to improve operational efficiency focused on seven key areas, including strategy, service delivery, financial performance, structure, digital processes, technology and platforms, and capability and capacity.
This transformation program would take three years to start, but could last longer, Rowe said. We estimate that the transformation program will cost between $26 million and $32.5 million.
Other recommendations call for the development of a new strategic plan; consolidation of all student services to improve student satisfaction and retention; implementing new financial planning, budgeting and reporting practices; the restructuring of administrative functions with clear lines of authority and responsibility; simplified, standardized and automated processes and new business processes for risk and records management; priority investments in digital tools and capabilities; and attract new capabilities by tapping into a large 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 the flow of information between the two bodies.
Additional recommendations call on each governing body to establish a clear mandate and set of responsibilities, to ensure that the appropriate composition and capacities are in place, and to adopt appropriate structures and processes, including the creation of a professional secretariat.
As far as the university’s finances are concerned, it is evident that LU is in a “significant financial situation”, and Rowe said there is “some kind of large-scale overhaul that needs to be done around the way which you are dealing with planning, scheduling, budgeting, forecasting, reporting, etc.”
The report says Laurentian’s “budget management, financial processes and reporting lack rigor” and 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 states that there “should be an implementation of new financial planning, budgeting and reporting practices, as well as new controls , to increase the maturity of the finance function and support performance improvement.
“Working with the board to update and establish financial policies and procedures is a first step toward improving financial management.”
Laurentian’s current strategic plan, which was to take the university through 2023, is obviously dated due to changes at LU over the past year as it underwent insolvency restructuring, said Rowe.
The university is under orders from the province to begin consultations for a new strategic plan.
We Group found that the previous plan had a lot of hard-to-measure goals, the reports didn’t seem complete, and they weren’t able to see how this plan was impacting the whole company. organization.
In the new strategic plan, the report states that “goals should be specific, measurable, achievable, mission-aligned and time-bound. Accountability for results should be assigned to specific university leaders.
Rowe said the Us team is considering recommending Laurentian’s move from the bicameral governance structure (which consists of the board of governors, which is responsible for the university’s finances, and the senate, which is responsible for policy academic) to a unicameral governance structure (which merges the two into a single governing body).
She said that in Canada, only the University of Toronto is governed in this way. However, they recommended that Laurentian stay with the bicameral model for the time being, although there is a “governance maturation” that needs to occur at Laurentian.
The Governance Report states that with respect to Laurentian’s Board of Governors and Senate, “where ambiguity or overlap occurs in written mandates or in practice, it must be corrected immediately.”
A press release issued by Laurentian indicates that as a next step, LU will discuss the recommendations with stakeholders, including determining the source of funding to execute the transformation.
As Laurentian moves through this process in collaboration with key academic and community stakeholders, including its faculty, employees and creditors and in partnership with the Government of Ontario, it will provide regular updates. on progress, the press release said.
“We are confident that implementing these recommendations will enable the University to make the necessary changes to ensure that the appropriate governance and operational frameworks are in place to better meet the needs of future Laurentian students” said Lou Pagnutti, director of redevelopment at Laurentian, in a press release.
“While there will be challenges as Laurentian executes this ambitious, long-term transformation, the university is focused on doing everything that needs to be done to make Laurentian the best possible environment for its students. The report serves as a roadmap to success – and the university is committed 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 about the release of the Us reports.
“Laurentian University is committed to making the necessary changes to ensure that we have the processes, functions, equipment, training and personnel necessary to support financially sustainable operations,” said the president of the Laurentian, Robert Hache.
“Some of the changes will be made immediately, while others, including an update to the university’s IT and other systems, will require new funding. While we have a lot of hard work to do, I believe this transformation will allow Laurentian to resume its role as a source of bilingual and tricultural knowledge for the North for generations to come.
“This Board of Governors will take the steps necessary to perform the work required for a greater degree of Board scrutiny, accountability and oversight, ongoing renewal and training, and a deeper and more diverse skill set of its members,” Jeff said. Bangs, the interim chair of Laurentian’s board of governors.
“We look forward to working with management, the Senate as a university governance partner, our union partners LUSU and LUFA, and our wider community to ensure we follow best practices in our governance structures and processes to to better serve our students and our community. »