Fiscal Mismanagement

WLUFA news release:

Laurier’s “Large Deficit” Show Hides Declining Cost of Salaries

Dr. Max Blouw, the new President of Wilfrid Laurier University, in a number of public statements, has expressed concern about Laurier’s financial deficit. He has indicated that he intends to address this deficit through economies in salaries paid to Laurier employees.

The present impasse with the Contract Academic Staff which has led to a strike is just the first round in President Blouw’s plan.

At the request of Wilfrid Laurier University Faculty Association, Dr. Bill Salatka, Professor of Accounting in Laurier’s School of Business and Economics, has undertaken an analysis of the University’s published financial statements for 2002 - 2006.

“There are at least two important aspects to what the published financial statements show,” Dr. Salatka says.

“By transferring money out of the General (or Operating) Fund into capital and other funds, the University Administration has “created” a large deficit for 2006 in the General Fund. The University was not overall in a net deficit position in 2006 (the last year for which there are published financial statements available).”

Dr. Salatka says, “This deficit of $62 million in 2006 is the result of cumulative transfers out of the General Fund amounting to $39 million since 2002.”

This is a deficit created by the Administration.

A second significant aspect that undercuts the Administration’s claims relates to the total salary bill for all employees (administrators and managers, full-time faculty, contract academic staff, librarians, non-academic staff, et al.), which is a major cost for universities. At Laurier, however, the total salary cost has been declining in relation to total revenues.

“Total salaries, as a percentage of student fees, have dropped approximately 9% since 2002,” Dr. Salatka says.

Also if you compare total salaries as the cost of total revenues, total salaries have actually declined from nearly 53% in 2002 to just under 47% in 2006.

The Administration claims that the deficit means it cannot move to resolve the dispute over CAS seniority and compensation. Yet the analysis of the financial statements indicates that salaries have been a declining portion of University revenues. The deficit arises from past administrative decisions leading to transfers out of the Operating Fund.

This spring the collective agreements for two other major employee groups are coming up for renewal – the WLUFA full-time faculty and librarian collective agreement and the WLUSA agreement for non-academic staff.

“Creative accounting” is being used as a smokescreen to hide the Administration’s real agenda,” says Dr. Judy Bates, President of WLUFA.

Woops... You can't win when you don't have math skills on your side.