A new report from Newfoundland and Labrador's auditor general highlights widespread spending issues at Memorial University.
CBC
Mon, October 23, 2023
(Jeremy Eaton/CBC)
A scathing report from Newfoundland and Labrador's auditor general has found widespread inefficiency and overspending at Memorial University, and highlights spending and salary concerns.
Among the findings in the 80-page report, released by Auditor General Denise Hanrahan on Monday, were compensation policies that were either outdated or non-existent between April 2019 and December 2022. The report also says a lack of oversight has led to higher salaries compared with most other Canadian universities.
In her report, Hanrahan said the university has paid significantly higher compensation to 90 per cent of surveyed employees in executive and management positions — sometimes doubling that of an equivalent role in the provincial government.
For example, the report highlighted a $143,000 difference between the salary of a campus vice-president and an assistant deputy minister in government.
"It's the same work, but upwards of double the pay," Hanrahan told CBC News on Monday.
WATCH | How many vice-presidents does MUN have?
The report shows Memorial also has the highest administrative salaries per student in Canada at $2,369 per student. The next closest university, according to the report, had an administrative cost of $1,994 per student. Administrative costs at the university were $893 higher than the average for all other universities compared.
Compensation and benefits are also a key part of the report. Hanrahan said the university paid out for benefits significantly more than government, citing one executive leave entitlement package that could grant 95 days of annual leave — or over 37 per cent of the year.
"Certainly if one in three days of a year you could be off getting paid, you would think that would have a pretty significant impact," she said.
Lack of organizational roots
Hanrahan's report highlighted a general lack of an organizational chart within the university.
According to the report, in 36 positions sampled, 35 — or about 97 per cent — didn't have a position description. There were no position descriptions for the seven vice-president positions and none for 28 of the 29 management positions.
Auditors were unsuccessful when they asked for detailed information.
"The Department of Human Resources was unable to provide this data as their systems were not designed to document the roles and responsibilities of staff," the report said. "As a result, we could not determine the exact number of staff performing specific functions within the university."
Hanrahan wrote that the lack of knowledge around specific position descriptions led to numerous instances where the same work was being done by multiple portfolios.
For example, the school's communications is the responsibility of the vice-president of advancement and external relations, but Hanrahan found 14 senior communications positions reported in other vice-president's portfolios.
The report says problems with a lack of defined roles have been identified before but noted recommendations made by Memorial's Office of Internal Audit in February 2020 and in June 2021 remain outstanding.
Auditor General Denise Hanrahan's report notes a lack of organizational structure, leading to inefficiency. (Patrick Butler/Radio-Canada)
The university's Harlow Campus, in the United Kingdom, didn't have an organizational tree at all, says the report, and there are no signs the university's board of regents received detailed updates on the campus's financial activities.
"The Harlow campus was included in the financial updates presented two to three times a year to the board of regents, but this was a single line of highly summarized information without analysis or discussion," the report says.
Hanrahan said these financial updates were expected three times per year, but the audit found there were a total of five one- to two-page reports over 45 months.
Spending and gifts
The report also outlines a lack of policy for university-hosted events and things like scholarships, which the auditor general says led to donations that could be considered excessive, including almost $50,000 paid out in special allowances for deans and directors to host events attended solely by university staff, like retirement functions or Christmas parties.
It also highlighted spending that ultimately never panned out, like $65,000 spent to hire a consultant — who was a board member of the Harlow Campus — who didn't leave a final report.
MUN also spent $1.1 million on employee recruitment firms. One-third of people hired by the firms no longer work with the university, the report said.
Hanrahan said the audit also found an instance in which the university paid $2 million to license a management software package, called Navigate, that was inefficient and underused. An internal audit recommended it only be renewed for one year before being phased out, the report said.
But in December 2021, MUN renewed the software license for five years — costing $377,356 per year. Hanrahan said that licence has now been terminated.
Former Memorial University president Vianne Timmons is a key figure in Hanrahan's audit, noted for spending decisions that appear to lack oversight. (Sherry Vivian/CBC)
Hanrahan also listed questionable spending involving former university president Vianne Timmons, including:
$1,792 on custom chocolates in December 2020, which were used as gifts.
$2,700 on a new desk and chair for the president's home. Hanrahan said the desk was returned when Timmons left as president, but the chair was not.
$600 on a limousine when a rental car wasn't available in August 2021.
"It's the public sector, and I don't think anybody anticipates their tax dollars are getting spent to buy Christmas presents," Hanrahan said, referring to the chocolates.
The auditor general said the university also couldn't provide a policy that shows how its non-operating funds, which includes $190 million from the provincial government, are monitored.
Hanrahan said the audit found that how the provincial money was spent was often the responsibility of Timmons, but there are no traces of any oversight.
"We even asked the vice-presidents who was responsible. They couldn't tell us who was responsible for oversight of that $190 million, which is about a third of their budget of the whole university," she said.
During question period Monday, Education Minister Krista-Lynn Howell said the province will need time to read through the report and and work with the university on instituting accountability. The province will have to be careful to respect MUN's autonomy, she added.
Opposition House leader Barry Petten responded that the government should have already read the report, which it received on Friday.
MUN accepts recommendations
Hanrahan's report includes eight recommendations, including the evaluation of oversight functions, a review of compensation policies across the entire organization and the implementation of measures to prevent conflicts of interest.
"These are fixable things, so we were very particular in the wording that we used for our eight recommendations to the institution," Hanrahan said. "We really believe there are concrete actions that can be done, and can be done pretty quickly, to deal with some of these issues."
From left: MUN vice-president of finance and administration Lisa Browne, president and vice-chancellor Neil Bose and Board of Regents Chair Glenn Barnes spoke on Monday, saying the university accepts Hanrahan's recommendations. (Terry Roberts/CBC)
Speaking at a news conference on Monday, MUN's president Neil Bose says he accepts the recommendations and is maintaining a commitment to openness and transparency.
"There are lessons to learn from the auditor's findings. As I noted, changes already implemented are improving our operations and supporting our academic mission," said Bose, who is also vice-chancellor.
"We will make changes that improve the way in which we operate."
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