After posting a deficit of $66.7 million in the 2020-2021 financial year, draft financial statements released by Laurentian University this week show the university has a nearly $16.8-million surplus for 2021-22.
Laurentian University’s board of governors will vote Oct. 21 on whether to approve the statements for the 2021-22 financial year.
Sudbury.com has obtained a copy of the agenda and board package in advance of the Oct. 21 meeting, which includes a draft of Laurentian’s 2021-2022 financial statements.
The following motion is up for discussion during the meeting: “Be it resolved that the Board of Governors approve the Consolidated Financial Statements of Laurentian University of Sudbury for the year ending April 30, 2022, as presented at its meeting of October 21, 2022.”
This as Laurentian expects to exit insolvency restructuring next month after filing for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) more than a year and a half ago, in February 2021.
A report from the board of governors’ audit committee said the surplus for 2021-2022 would have been $44.5 million before restructuring costs.
Those restructuring costs are listed as being $27.7 million in 2021-2022, and $78.9 million in 2020-2021.
A breakdown of those restructuring costs for the past financial year include $10.6 million for legal fees, a little over $5 million for monitor fees (presumably to be directed to Ernst & Young, the court-appointed monitor of Laurentian’s insolvency), $3.5 million for consulting fees and $2.8 million for interest and finance costs.
The restructuring costs also include a figure of $25,000 under the category of “employee restructuring and termination costs,” and a little over $6 million for “restructuring and settlement costs.”
Laurentian spent $93.2 million on salaries and benefits in 2021-2022, as opposed to $128.4 million in 2020-21. The university’s insolvency restructuring included mass layoffs and program cuts in the spring of 2021, hence the reduction in salaries.
It brought in $79.5 million in operating grants and contracts, slightly more than in the last fiscal year, and $54 million in tuition fees, down from $58.2 million in 2020-21.
The university is still listed as owing $89.9 million to several major Canadian banks, the same as the last fiscal year.
Laurentian, of course, is in default on those loans. Under the plan of arrangement reached this fall, the university will only have to pay back a small percentage of what it owes its creditors.
The financials were audited by the firm BDO, which is replacing Laurentian’s long-standing auditors, KPMG.
In April, Laurentian’s board of governors selected BDO to audit Laurentian’s financial statements for the next five fiscal years.
The university conducted an RFP, and BDO was the only firm that submitted a proposal through the Ontario Education Collaborative Marketplace, a sourcing partner for Ontario's broader public sector.
Laurentian is bringing its 2021-2022 financial statements to the board of governors for approval more than half a year after that financial year ended, on April 30.
Pointing to multiple competing priorities, Laurentian was even later than that in presenting its 2020-2021 financial statements, with the board of governors only approving the statements from that fiscal year in March 2021, a situation that prompted warnings from the CRA.
Ernst & Young, the firm acting as the court-appointed monitor of Laurentian’s insolvency restructuring, went into detail about the situation in its 10th report, which was released late in January.
Laurentian is required to publish its audited financial statements within six months of its fiscal year end, meaning Oct. 31. It’s also required to file an annual Registered Charity Information Return with the Canada Revenue Agency by the same date.
— Sudbury.com
