Red River College faces $2M shortfall as another manager leaves

Manitoba's largest college is facing a $2-million budget shortfall as it loses its 12th senior official in the past three years.

Province to investigate issues "related to human resources and financial management" after CBC story

Manitoba's largest college is facing a $2-million budget shortfall as it loses its 12th senior official in the past three years.

In an internal memo obtained by CBC News, Red River College officials are urged to reduce spending on materials and supplies, delay hiring new staff, and minimize travel.

"The review of managers’ detailed projections to June 30, 2014, is now complete for the entire college and a $2 million shortfall has been identified," the memo by Red River president Stephanie Forsyth to the college's management group, dated March 26, states in part.

"The college operates with a total budget of close to $175 million and although this shortfall amounts to less than two per cent of our overall budget, it is still a substantial dollar amount that we have to mitigate. We cannot end the year in a deficit position."

Christine Payne, Red River's director of college and public relations, says the $2-million shortfall is just a projected figure and it's well on its way to balancing its books by the end of the fiscal year in June.

"There's not really a $2-million shortfall right now on the budget. What's happening — and most businesses do this — is you kind of look mid-year and you say in your review and your budget projections, 'Look where we're headed. It looks like there could be a $2-million shortfall'," Payne told CBC News.

"People are looking at their budgets and we're well on our way to not having a shortfall," she added. "It's very important that we meet our budget, and that's where we're expected to be at the end of the year."

Mass exodus of senior managers

It has been a costly few years for Red River College, in part because of senior managers leaving.

Stan Chung resigned as Red River College's vice-president of academic and applied research three weeks ago, after a year and a half on the job. (
A total of 12 senior staff have left the college in the last three years, including Stan Chung, who resigned as vice-president of academic and applied research three weeks ago.

A memo from Forsyth announcing Chung's resignation stated that he left for "personal and professional reasons."

Chung declined comment. He had been in the job for 1½ years before he resigned.

Prior to Chung's departure, the severance paid out to the 11 managers has cost the college a total of $762,978.61 over the past three years:

  • 2011: $265,337.50.
  • 2012: $171,691.57.
  • 2013: $325,949.44.

In the three-year period prior to 2010, that total was $63,314.98. That means the severance payment total in the last three years was up 1,105 per cent from the previous three-year period.

The severance pay numbers were requested by CBC News through a Freedom of Information and Protection of Privacy Act (FIPPA) application.

Red River College had denied the request, but it was ordered by the provincial ombudsman to provide the numbers after a complaint was filed.

Employees' union concerned

College officials said the executive severance payouts have not affected this year's budget, and it plans to recruit internally to replace Chung.

Forsyth herself came under fire last year, after the Canadian Taxpayers Federation found she had expensed a number of questionable items. (CBC)
The Manitoba Government and General Employees' Union, which represents college employees, said in a statement that it's "deeply concerned about the uncertainty that will be created by a $2-million shortfall at Red River College.

"This could impact both students and staff at RRC if it results in increased workload for instructors, staff positions going unfilled, decreases in programs being offered, and increases to tuition costs or other fee increases paid by students," the union's statement reads in part.

The MGEU said its members are also concerned about the "unprecedented number of changes happening at Red River College’s senior management level in the recent past, which they feel could negatively impact the reputation of RRC in the community and adversely affect the ability of the institution to recruit and retain quality people in the future."

Forsyth herself came under fire last year after the Canadian Taxpayers Federation found she had expensed a number of questionable items, such as $205 golf shoes, a Vancouver Airport duffle bag, her driver's licence, car washes, winter tires and a GPS system for her BMW.

Forsyth responded by saying she would pay the college back for the golf shoes and her licence.

Later that year, the college's Board of Governors cleared all of her expenses.

College's numbers 'off the charts'

The Canadian Taxpayers Federation said Thursday the college's claims that its financial house is in order are not reassuring. 

"That's simply not true, because the money comes from students in the first place, as well as taxpayers," said Colin Craig, spokesperson for the Manitoba division of the lobby group. 

He said his organization has been keeping a close eye on Red River College's executive spending.

"The numbers are off the charts," he said.

CBC has learned that in 2010, the college had five executive positions. In 2013, that number was seven.

During that time, compensation in the office of the president, including salaries for two executive assistants, rose by 33 per cent to more than $360,000 a year.  Salaries in the office of the vice-president academic also jumped 88 per cent to $366,000 a year.  That figure includes the salary of one assistant.

Craig said there's no way the board should have approved those hikes. 

"The board has been kind of sleeping and just rubber stamping expenses," he said. "The province needs to get involved, I think, and ... take a look at things."

Province to investigate HR, financial management issues 

Manitoba Education Minister James Allum told CBC late Thursday officials will investigate "issues related to human resources and financial management" of Red River College.

It comes in response to CBC's story on the college's $2 million budget shortfall and recent high turnover of senior staff.

In response to CBC's questions about increases in executive positions and salary hikes, Allum said he had certain expectations of the board, and they would be met. 

"The board is left to make those kind of decisions, management decisions, human resource decisions," he said. "We expect them to follow the letter of the law. We expect them to balance the budget."

Read the memo

Read the March 26 memo by Red River College president Stephanie Forsyth to senior managers about the projected $2-million budget shortfall:


  • A previous version of this story contained incorrect information about the salaries of the college's president and vice president, academic and research. We reported that since 2010, the president's salary rose 33 per cent over three years to more than $360,000 a year, and that the vice-president's salary also went up 88 per cent over three years to $366,000 a year. In fact, these numbers refer to total compensation including benefits, and they also include the costs of two executive assistants in the president's office and one assistant in the vice-president's office. We apologize for any misunderstanding this incorrect information may have caused.
    Apr 25, 2014 2:54 PM CT

With files from the CBC's Katie Nicholson


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