Good blog by Alex this morning. I have a couple of small points to add to what he says, based on my experience with fund accounting in universities.

First, the single bank account. the number of accounts is essentially immaterial provided two conditions are met. 1/n https://twitter.com/AlexUsherHESA/status/1361663793844076544

It’s like a locked drawer with envelopes of money for different purposes, so: a) You need to know at all times exactly what’s available in each envelope; b) If you take money out of one envelope to use for the purposes of a different envelope, you need to pay it back asap. 2/n

So if you borrow money from a restricted (i.e., earmarked) envelope such as research funding, you had best be sure you can put it back before it’s needed. When there’s a structural operating deficit plus new carrying costs for buildings plus enrolment problems, that’s hard. 3/n

Second, the auditors. Not being either an accountant or an auditor I won’t comment on that question except to say that I would definitely want the auditors to be diligent in examining the books, and to run up a big red flag if they see problems. Seems that didn’t happen: why? 4/n

Third, the board. As Alex says, this is the really big one, and it was the first question that occurred to me. A couple of things to mention: a) the single account was not necessarily a problem in itself, so once again I’m not so worried about that, but there’s a big ‘but’. 5/n

Who was watching the movement of funds from restricted envelopes to unrestricted (e.g., from unspent but guaranteed research funds to operating)? So: b) the role of Board committees is extremely important here. I would look less to Finance than to Audit, myself. Here’s why. 6/n

Finance is more like the Ministry of Finance: its big role is to approve the annual budget and monitor revenue and expenditure in keeping with the budget. Audit is more like Treasury Board in paying close attention to the actual expenditures. Audit has one vital role here. 7/n

See https://intranet.laurentian.ca/upload/0/6249/AUDIT%20CTTEE%20Terms%20of%20Reference%20June%2024.11%20(EN).pdf for this. Note the highlighted points. It looks to me as though the Audit Committee was systematically and scandalously delinquent, though I would love to be proved wrong.

So, what’s the accountability here? 8/n

Well, it’s hard to escape the conclusion that the Board should pay a steep price for this disaster, because it sure looks to me as though they failed outrageously in their fiduciary duty to Laurentian.

What about senior management? Here too it’s very hard to avoid blame. 9/n

How could the President be unaware of the problems for so long following his appointment, especially given his background as a VPRI at York? He would certainly understand the important of restricting research funds. And how about the VP Admin, whose role seems critical? 10/11

So yes, like Alex, I would expect heads to roll for this mess. Had I been involved in something like, I would certainly have expected to be fired once the failures of management and oversight became clear.

I’ll hold off on saying anything about the calls for more funding. 11/11