A merger between two local colleges has been killed, the CEO and president of both has been fired, and the government is now looking into possible financial irregularities.
On March 17, Rob Norris, Minister of Advanced Education, Employment and Immigration, announced that an independent study had concluded that Carlton Trail Regional College (CTRC) and St. Peter's College (SPC) are not ready for a merger.
The independent study was prepared by Meyers Norris Penny (MNP), who had conducted community consultations and interviews regarding the merger late last fall.
The report states that some key elements to support the merger are missing. Things like a comprehensive business case and rationale, a clear implementation plan, a financial management and operational plan, a thorough human resources strategy, and a governance structure providing oversight and accountability for public funds.
"While many people at the public consultations supported the concept of a merger, there were serious concerns and questions about the proposal," Norris said in the news release. "The consultant's report is clear that the proposal is not in the public interest."
Some of the information collected during the consultations also prompted concerns regarding the governance and leadership of the two colleges, including potential financial irregularities, it was reported.
Those concerns were contained in a separate report, which will be the subject of further review by MNP and the Ministry.
In the meantime, the minister requested that the boards of both schools place Glen Kobussen, who had been acting as CEO and president of both colleges since the spring of 2010, on administrative leave pending the outcome of the review. Both boards complied. SPC placed him on leave, and CTRC terminated the contract they had for his services.
Kobussen was found guilty of five counts of fraud and theft in 1995 for siphoning money from the Saskatchewan professional firefighters' burn fund charity.
He did not return phone calls from the Humboldt Journal.
"I want to reassure the students of both schools and the taxpayers of Saskatchewan that we take these matters very seriously," Norris said.
When contacted on the afternoon of March 17, Abbot Peter Novecosky, who spoke for SPC, stated that "everything is in place to continue the college. Things will continue as usual.
"The merger with Carlton Trail which we were looking at... does not affect the day to day operations (at SPC)."
The government, he added, has just said no to the merger at this time. Once the board meets, he added, they will be going over the plans they have in place and determining what needs to be done to see if the merger can still happen.
"There is going to be work on the part of both boards to fill in the details," he said.
"Certainly, we want to work for the benefit of the whole area. If we can be a partner to that, we are willing to do that," he said.
No decision had been made at that time regarding Kobussen's future at the college, he said, though he had been placed on administrative leave from SPC.
"All I can say is we certainly have appreciated and do appreciate the vision and expertise he has brought to (SPC)," he said.
They were not privy, he added, to all the information that led to the government requesting he be placed on leave. Once they had that information, he said, the board would meet to share their thoughts.
"Our leadership is still in place with Rob (Harasymchuk, who is the current vice-president of SPC)... to carry on."
CTRC board chair Marlene Latreille told the Journal that both boards had met with the Ministry in Humboldt on March 16 to discuss the report from MNP.
"The board has received the report from MNP and we are reviewing it to understand the ramifications. We will have more details for you at a later date," she stated.
Until, she added, they have all the information and sit down as separate boards, until "we look at it and digest it, there's really nothing we can say. We haven't reached a consensus."
The Ministry, she added, has requested the administrations of the two colleges be kept separate, including having the boards meet separately, and they are complying with that request.
She promised more information will be released at a later date.
On March 18, the Saskatoon StarPhoenix reported that documents they had obtained showed concerns had been raised to the two boards about potential financial and accounting irregularities last spring, before the official merger proposal was submitted to the government.
Norris told the StarPhoenix he was upset that he had never seen or hear of a six-page report delivered to the boards of both colleges that raised concerns about potential improper financial management, improper reporting of taxable benefits and issues over whether there was proper compliance with auditor's recommendations at SPC.
Norris told the StarPhoenix reporter that he was deeply concerned by the issues raised in this report and that he was moving immediately to get answers from the boards about why this had not been disclosed to the government earlier.
The memo, written by Andrew Burgess, chief financial officer and acting financial officer for CTRC and SPC respectively, raised concerns that Kobussen had been charging SPC twice for reimbursement of travel expenses, that a television purchased by the college and picked up by Kobussen had never been accounted for, and that Kobussen had made a $1,000 donation to the Saskatchewan Party to join its Enterprise Club, and was reimbursed for it by the SPC.
The Sask Party government later said the donation money was being returned to SPC by the party.
Burgess also asked whether SPC was following proper accounting practices.
Fr. Demetrius Wasylyniuk, chair of the SPC board, told the Star-Phoenix that no financial irregularities had occurred in relation to Kobussen, and all the concerns raised in the memo had been dealt with by the boards when they considered the report in-camera at their May 10 meeting.
He said the SPC board had given approval ahead of time for all the issues raised in relation to Kobussen, that there are no issues around the SPC accounting practices, and that the college is audited yearly by MNP.
"Our accounting system is different than that of the regional colleges because we are a private college," he is quoted as saying.
On March 21, Norris announced in a news release that both colleges have been directed that, in order to receive funds from the upcoming provincial budget, they have to comply with an audit ordered by the Ministry and conducted by a national accounting firm, "to ensure appropriate and adequate controls are in place."
He also stated that the materials that came to his attention last week were to be forwarded to the Ministry of Justice for review and appropriate disposition.
"We ask that anyone with further information on these issues to do the same," Norris said.
In the same release, Norris updated the public on the steps taken by the government so far.
"On Friday, March 18, I asked the boards of each institution to provide me with a written report of the steps they took after receiving a memo dated May 10, 2010, regarding the allegations of financial and accounting irregularities," he reported.
The responses provided by each institution were to be made public on March 21.
The Ministry met with officials from the Provincial Auditor's Office on Friday morning, he stated, adding that "My ministry has written a letter to the auditor, pledging our full co-operation in any actions deemed necessary."
Norris also consulted with ministry officials over the weekend, he reported, and as a result, he has:
Directed the immediate release of the MNP report dated February 15, 2011 on the proposed merger.
Confirmed that MNP has commenced a second review on governance, financial management and leadership at the colleges.
Directed that the terms of reference for the appointment of an interim CEO at CTRC be subject to a review by the Ministry.
Sent a letter to the Deputy Minister of Advanced Education, Employment and Immigration requesting two detailed action plans; the first including measures to enhance board governance and administration for our post-secondary partners and the second to enhance the ministry's ability to increase institutional accountability.
These steps, he added, are necessary to protect the interests of students and taxpayers.
"I understand this may be a difficult time for them. However, I will take every step necessary to guarantee this year's studies are not interrupted."
The Journal was promised an interview with Norris before our press deadline, but none took place.
These announcements by the government follow a number of concerns raised by members of the community regarding the merger, including the moving of public assets to a private institution, and combining unionized and non-unionized staff.
