Lukaszuk will appoint independent consultants to review U of A finances

EDMONTON – Chair of the University of Alberta’s Board of Governors says the minister of advanced education has told him independent consultants will be reviewing the school to “identify any potential gaps in fiscal planning” and “ensure the long-term fiscal sustainability.”

In a blog post on Tuesday, Doug Goss confirmed Minister Thomas Lukaszuk had responded to the U of A’s Comprehensive Institutional Plan and proposed budget plan.

“The deputy premier has approved the board’s request to carry a deficit of $44,691,000 for the 2013-2014 fiscal year, but also expresses concern with the proposed three-year plan,” Goss wrote in the blog. “Although he did not state a definite deadline for when the university must reach a balanced budget, I interpret this letter–as well as a letter to me from the deputy premier on June 26th–as directing administration to continue with plans to reach a balanced budget for the 2014-15 fiscal year, resulting in a sustainable, balanced position by April 1, 2015. We must provide quarterly updates on the institution’s financial performance for the year.”

Goss also said Lukaszuk is planning on assignment consultants to review the university’s finances.

“In addition, the deputy premier has informed me that he will be appointing independent consultants to conduct a pilot financial review project in order to “help identify any potential gaps in fiscal planning for the institution, and ensure the long-term fiscal sustainability.” University administration will work cooperatively with the ministry and these independent consultants to ensure that they have all the information they need to understand the financial challenges we face–their root causes and the risks they present the university and our students.”

“It’s not unusual. This practice has taken place on a number of occasions with other institutions,” Lukaszuk explained on Wednesday. (Watch the full Global News interview below).

“After ten years of continuous budget increases, this was the first year where there was an actual decrease. All schools dealt with it differently, but the University of Alberta has communicated clearly that they have some structural issues that they need to deal with, and as we have seen recently, some dire consequences were being communicated. So, we’re there to help them deal with the financial situation to see if their business plan can be adjusted in any way, to make sure that they don’t run such high deficits.”

Goss tells Global News the whole process has been “a little surprising.”

“This institution is run extremely well. It’s run very efficiently. We don’t have $70 million dollars just kicking around to balance the budget. For us to make those kinds of cuts takes a lot of time. It takes a lot of thoughtful planning,” he explained.

When asked whether Lukaszuk’s review of the university could be used to improve confidence students and stakeholders have in the institution, Goss replied:

“I don’t know where he would’ve got the thought this place wasn’t being run well. There seems to be some kind of notion that there’s a bunch of money washing around here so as I said, I think it’ll be helpful for the consultants to come in and dispel all those myths because that’s what they are.”

“We’re very proud of the University of Alberta,” added Lukaszuk. “But there’s nothing wrong with opening books. These are publically funded institutions. 25 per cent of their operating budget is actually students’ tuitions, so if there is an institution that is posting three-year deficits – much higher deficits than the actual budget cut of this year – there is nothing wrong with simply looking at their books together and saying ‘Can we help you? Is there a structural problem? Is there something we need to overcome so that you have a very solid, sound business plan into the future?’”

On Tuesday, the University of Alberta announced the Faculty of Science would have to bring down enrollment numbers by 300 students this fall because of budget restrictions.

In a letter to department chairs on August 16, the Dean of the Faculty of Arts revealed the U of A was suspending admissions to 20 Arts programs because of the budgetary situation.

“Many people across the institution have been working hard to address this fiscal situation, and I appreciate the good work and thinking happening at all levels of the university,” explained Goss in the blog. “I reaffirm my and the board’s commitment to excellence and our dedication to being an outstanding institution for the benefit of all Albertans and those who come to us from across Canada and around the world.”

NDP MLA Rachel Notley feels the Alberta PCs are trying the frame the issue as an accounting problem to distance themselves from the consequences of the provincial budget.

“I think this is pure optics on the part of the minister. He’s trying to distance himself from the predictable results of taking more than $40 million out of the U of A budget in one year,” she says.

“It is no surprise that we’re losing Arts programs, that we’re losing science programs, that fewer spaces are going to be there for students, because Alison Redford broke her promise to give them a two per cent increase, and instead, took $40 million away from them. So, to then somehow try and pretend that it’s an accounting program, is theatre and nothing more.”

In a written statement on Wednesday, Students’ Union Vice President Academic Dustin Chelen commented on the government’s plan to review the U of A’s finances.

“It is unclear at this point how transparent the process will be, how involved students will be as U of A stakeholders, or what this means for overall financial transparency at the U of A,” the statement reads.

“The Students’ Union believes that students and the academy should be privy to detailed budgetary information and should be part of any financial reviews of the institution, especially in light of recent budget cuts.”

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