Harvey Weingarten announced in February that he is stepping down as president of the University of Calgary. ((CBC News))

The multimillion-dollar pension of the University of Calgary's outgoing president was part of a "handshake" deal that didn't end up in a signed employment contract for seven years, Alberta's auditor general has concluded.

Auditor General Fred Dunn examined the negotiations that led to Harvey Weingarten's controversial $4.5-million pension package in a report released Friday.

During a press conference, Dunn said he was "really disappointed" and "troubled" by the university's conduct during his investigation

"They were the last ones to give us the contract. They did it very reluctantly. And I'll be blunt. They sent me the wrong contract," he said. "And if you're going to deceive an officer of the legislature, I believe that's tantamount to deceiving the legislature … and I believe that is obviously inappropriate."

Charlie Fischer, vice-chair of the university's board, said it's unfortunate it took so long to resolve the problems with Weingarten's contract but denied there was anything inappropriate.

"You can look at the process and say the process was terrible but nobody was hurt, nobody was harmed," said Fischer.

Outside consultants have now been brought in and will make recommendations to the university on how to negotiate pay issues with senior executives, Fischer said.

Handshake deal in 2001

Weingarten, who worked as a vice-president at McMaster University before moving to Calgary, negotiated his agreement with the board of governor's chair in 2001, and signed an employment contract two years later.

"During their negotiations [they] agreed the president would be left 'in no worse a pension situation than if he had stayed at McMaster University,'" the report states.

"The president told us that he signed the contract knowing it did not include significant benefits for him, on the basis that he had a 'handshake' deal with the university and that he trusted they would do the right thing."

Weingarten brought the issue up during contract extension negotiations in 2005. By 2006 the president and the university had signed a statement of principles that included an agreement to make up for the pension Weingarten lost when he left McMaster, his employer for 22 years. But Weingarten didn't sign an amended employment contract until 2008.

"It seems highly unusual that the university and the president would take two years to negotiate an employment contract, reduce it to writing, sign it knowing it excluded significant benefits, and then take a further five years to come to a final agreement on the excluded terms," the auditor general wrote.

"That said, there is no evidence that the president or anyone else has received or will receive an inappropriate benefit from the amendment to his employment contract."

Financial services didn't know about the deal

The university's financial services department didn't even know about the multimillion-dollar pension package until Weingarten, who is in his early 50s, announced his retirement in February. Staff had to adjust the pension liability from $522,000 to $3,375,000. On Friday, the university restated that the actual pension liability, based on figures from actuaries, is closer to $4.5 million.

Dunn is recommending the board of governors "establish systems to guide all aspects of compensation, including timely negotiation" for senior executives.

"Without effective systems and processes to guide recruitment, compensation and retention of senior executives, the university risks over-compensation … legal liability for disputed compensation agreements and damage to its reputation, which in turn may dissuade qualified executives from considering the university as a career choice," Dunn wrote.

News of Weingarten's pension came as the university faced financial pressures. In the summer, Weingarten warned that as many as 200 jobs would be cut in an attempt to reduce an estimated $14-million budget shortfall.