Nfld. & Labrador

Auditor general to scrutinize spending, operations at Memorial University

With all the legislative hurdles removed, Newfoundland and Labrador's auditor general will now undertake a review of spending at Memorial University, the provincial government announced Monday.

Province provides 76% of university's revenues, well above national average

The Office of the Auditor General of Newfoundland and Labrador will carry out a full review of spending and operations at Memorial University, the provincial government announced Monday. (Terry Roberts/CBC)

With all the legislative hurdles now removed, Newfoundland and Labrador's auditor general will undertake a review of spending at Memorial University, the provincial government announced Monday.

However, it's too early to say when the audit will begin, how long it will take, and the extent to which spending will be probed, said a spokesperson in the auditor general's office.

Denise Hanrahan and her team will conduct a "full and comprehensive review" of operations and spending at the university, which is the "most heavily subsidized university in Canada," according to a government media release.

"This is a function of protecting taxpayers' dollars," said Education Minister Tom Osborne on Monday afternoon.

According to Statistics Canada data, 76.2 per cent of the university's general operating revenue in 2019-20 came from government grants, compared with a Canadian average of 44.8 per cent.

Because of the disparity with other universities, and with Memorial's quest for more autonomy, Osborne said an unbiased review of spending "is the responsible thing to do."

When asked if the university's government grant might be reduced in Thursday's provincial budget, Osborne said, "There are no unexpected surprises for Memorial."

Nothing to hide

Memorial president Vianne Timmons said the university doesn't have anything to hide and welcomes the increased scrutiny.

"We are open and transparent. We get an audit every year. And since I've been here we've had a clean audit every year and a balanced budget. So we're very positive about it," Timmons said.

We are open and transparent. We get an audit every year. And since I've been here we've had a clean audit every year and a balanced budget. So we're very positive about it.- Vianne Timmons

But the president is concerned that the university might be "over-scrutinized," considering Memorial was recently the subject of a post-secondary review and was featured prominently in last year's The Big Reset report by the premier's economic recovery team.

"The perception that we're not transparent is ill-founded," she said.

Memorial University president Vianne Timmons announced in July that tuition would increase significantly in the fall of 2022. (Terry Roberts/CBC)

Timmons said she has not be been briefed on the parameters of the audit but hopes it will be a "timely and efficient process" because of the demands it will place on staff.

As for the above-average rate of public money required to operate Memorial, Timmons said it's a reflection of government policy that prevented Memorial from increasing tuition over the years. That's slowly changing, she said, with higher fees set to take effect in the fall.

'More entrepreneurial and nimble'

She wants to see changes to the Memorial University Act to allow the university to become "more entrepreneurial and nimble."

Under the current act, she said, the university must seek permission from the province before investing any donations or even federal funding in the university.

Past attempts to scrutinize spending have been stymied because of language in the Memorial University Act and the Auditor General Act. But with changes to both pieces of legislation last year, those hurdles have been removed, said Osborne.

Final amendments to the Memorial University Act relating to additional independence for Memorial will be made based on the findings of the auditor general, said Osborne.

According to a media release, the auditor general now has the authority to scrutinize university spending to ensure its revenues are "being managed with due regard to the economy, efficiency and effectiveness."

Finance Minister Siobhan Coady said the government recognizes the "significant value" that the university delivers to the province, but as stewards of the public treasury, she said the government must also "ensure that this investment is being used to maximize the benefit for post-secondary students and their educational outcomes."

In 2019-20, the provincial government provided Memorial with a base operating grant of $245 million, plus $64.4 million to help keep tuition from increasing. In addition, the Department of Health and Community Service provided an operating grant of $54 million to the faculty of medicine.

A long-standing tuition fee freeze distinguished Memorial as one of the lowest-cost universities in Canada, outside Quebec.

But with the province slowly phasing out its tuition offset grant, and with the university facing a financial crunch, a new fee structure was announced last summer. Taking effect this fall, it will effectively double tuition for Newfoundland and Labrador students to roughly $6,000 for an academic year. The cost for international students will increase to $20,000, still well below the national average of roughly $32,000.

Despite the fee increases, Timmons said, enrolment projections for next year are consistent with the 2021-22 academic year.

"It is important to recognize that students come to Memorial for the programs we offer, and the numbers are showing that," she said.

Read more from CBC Newfoundland and Labrador

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