When conservative-oriented politicians talk about government waste, they are often criticized by left-leaning politicians who claim it is just a smokescreen to hide underfunding or a way to drum up support for government spending cutbacks.
But sometimes, the accusations are true. And whenever it occurs, it undermines taxpayers’ faith in the system.
Such was the case earlier this month when Nolan Quinn, the Ontario Minister of Colleges, Universities, Research Excellence and Security, took over Conestoga College, fired the board of governors and appointed an administrator, Linda Franklin, to oversee the cleanup.
Franklin, well regarded as the former CEO of Colleges Ontario, the sector’s industry association, will act in place of the board and work with an interim president of Conestoga to restore appropriate financial and governance management and oversight.
The government’s move, the first in the college sector, followed the release of an external audit which uncovered “numerous egregious financial decisions which lacked appropriate oversight” by the board.
For example, the board had approved a 55 percent salary increase for the college’s former president, John Tibbits. This was in addition to a termination payment that was 83 times his monthly salary, in contravention of provincial legislation limiting such payments to 24 months.
Tibbits’ salary of $636,107 was already higher than what his counterparts received at much larger universities and colleges like the University of Toronto, University of Ottawa, Humber and Seneca Colleges.
To make it worse, the details of the termination payment were approved by the board without the governors knowing the details of the financial arrangement, a clear breach of good governance practices.
But the financial issues did not stop there. The audit also discovered that the college had paid for expensive luxury trips taken by senior staff, hospitality expenses that had not been properly reviewed or approved and expense account purchases of alcohol which are prohibited.
The college’s strategic decisions had also raised criticism for some time about the sustainability of its business plan. In an attempt to dramatically boost revenues, the college had accepted more international students than any other college in Canada.
International students pay much higher tuition fees than resident students so Conestoga revenues soared, generating more than $100-million surpluses at its peak. But community supports, primarily housing, could not support the growing numbers so the federal government started cutting back how many international students would be allowed into Canada.
The subsequent hit to the college’s budget resulted in more than 500 employees losing their jobs, the largest layoff in Ontario’s college sector to date.
The current head of Colleges Ontario, Maureen Adamson, said the provincial government was also “doing what they should be doing…the government has a really important role in overseeing colleges and governance rules.”
Quinn called Conestoga an outlier in the college sector, and hopefully that is true. Fingers can be justifiably pointed at the board of governors and the college’s former CEO. But it is also an opportunity for the provincial government to take a good look at its own oversight and appointment practices to ensure that they are rigorous enough.
Are civil servants in the ministry exercising enough due diligence to spot trouble when it happens? Do they have enough authority to act before the situation becomes a crisis? Is the government’s own appointment process thoroughly assessing the competence and skill set of the people being named to governance boards?
Governments of all political stripes frequently use public appointments as a way to reward supporters. But that doesn’t mean they should not pay attention to the skills and competencies such appointments require.
Millions of tax dollars are at stake. And taxpayers have the right to expect that the people in charge of these agencies know what they are doing.
Janet Ecker is a former Ontario Finance Minister, Minister of Education, Minister of Community and Social Services and Government House Leader in the governments of Premier Mike Harris and Premier Ernie Eves. After her political career, she served as the founding CEO of the Toronto Financial Services Alliance, a public-private partnership dedicated to building Toronto region into an international financial centre. She currently sits on a number of corporate and non-profit boards, agencies and advisory committees.
Ms. Ecker received the Order of Canada for her public service contributions and was recognized as one of the “Most Influential People in the World’s Financial Centres” by Financial Centres International. She also received a “Canada’s Most Powerful Women: Top 100 Award” from the Women’s Executive Network and the Richard Ivey School of Business, among other awards. She is also one of the founders of Equal Voice, a national, multi-partisan organization working to elect more women.
