Province Fines Concordia $2M Over Severance Packages

Ministry of Education Fines Concordia Over Payouts

NewsRiley Sparks — Published March 9, 2012

On March 9, Quebec decided that enough was enough.

The provincial government is punishing Concordia for shelling out over $3.1 million in severance packages to administrators between October 2009 and December of 2010.

“Concordia University has shown a lack of control and should face the consequences,” Minister of Education Line Beauchamp said in the press release that announced the move.

Making an example of Concordia’s massive spending on severance packages for retiring senior administrative staff, the provincial Ministry of Education will reduce the university’s funding by $2 million, starting April 1 of this year.

“What we’re telling universities is this: ‘You’re managing money that comes mainly from taxes. You can’t just run it like any other business,’” the Minister told the Canadian Press.

“Healthy management is synonymous with transparency and efficiency,” she continued in a letter addressed to Peter Kruyt, chair of the university’s Board of Governors, rebutting Kruyt’s comment after a December 2011 Board meeting that “transparency does not equal good governance.”

In the letter, Beauchamp explained that she was particularly concerned about a total of $3.1 million given to former Concordia president Judith Woodsworth and five other departing administrators.

The university also paid $1.3 million to Woodsworth’s predecessor, Claude Lajeunesse.

“We take note of the Minister’s decision and will act in accordance with our responsibilities,” said university Interim President Frederick Lowy in a statement issued later in the afternoon of March 9. “I would like to assure our community that Concordia is committed to prudent fiscal management.”

At a Board meeting March 12, Kruyt echoed those comments, but was adamant that “The letter from the minister does not really change the work we intend to do.

“It’s unfortunate—her choice of language for us—particularly given the bigger picture of us as Quebec’s healthiest and most financially responsible institution. This is not money well-spent,” he added.

Concordia Student Union President Lex Gill agreed, calling the $2 million fine “scandalous” and “embarrassing,” though she felt the severances had been excessive.

“[Spending] $2.4 million on five people over six months [amounts to] over 1,000 Quebec residents having their tuition paid and going to school for free for a year,” Gill noted.

Still, she added, the government penalty does not address what she calls systemic financial mismanagement at both the university and in the provincial government.

“Is the $2 million going to change anything? No. There should be an actual investigation,” she said.

“It’s a clear problem of mismanagement. They didn’t intervene when it happened, they didn’t intervene a year ago, or when Woodsworth got a $700,000 severance package, or with Lajeunesse before that.”

The university announced last week it would spend $25,000 to hire two external auditors to examine the payouts. That audit is expected to be finished in June.