The financial situation at First Nations University is so dire the school is facing the prospect of major layoffs and campus closings in spite of last-minute government funding, internal documents obtained by The Globe and Mail show.
The documents, prepared for the board of governors of the troubled Regina school, paint a grim financial picture, estimating that it will require a major cash infusion to keep the country's only aboriginal-run university operating.
"Continued operations on any scale requires a contribution of $5-$7-million to provide orderly severance of faculty and staff," the document states. Failing this, it concludes, the university "will have to go into receivership."
The document also states, "The financial situation we face is so serious that at any moment we face the prospect of receivership - not because we seek it, but because our creditors make demands we cannot meet."
This week, the federal government agreed to contribute up to $3-million to allow students at the school to continue their studies until Aug. 31, but that money comes with strings attached. The money cannot be used to pay debts or severance costs, for example.
Annual federal and provincial funding for the school was cut earlier this year amid questions of financial mismanagement by senior staff. Senior administrators were dismissed and a new board of governors was appointed. In response, the Saskatchewan government reinstated $5.2-million in annual funding under a four-year deal that gives financial oversight to an accounting firm and the University of Regina.
"We are still in a crisis situation and in crisis management at this point," said board of governors chair Joely BigEagle late Wednesday. The university, she said, is still able to make its payroll and is looking at securing financing to meet its future obligations.
She characterized the board report - based on only the $5.2-million from the province - as a "worst-case scenario" and said the school is working with its partners on a business plan to present to the federal government in the coming days.
The board also is consulting with lawyers about accepting the federal government's $3-million offer, saying there are questions about liabilities in the face of cutbacks.
Without new federal funding, the board report predicts the university would be forced to lay off 85 per cent of its staff, leaving it with just eight to 10 faculty. Most academic programs would be cut and the Saskatoon satellite campus would close, it states. The future closing of the campus in Prince Albert is also expected.
Chief Guy Lonechild, head of the Federation of Saskatchewan Indian Nations, which is responsible for governing the university, said there are plans to keep the university going through new partnerships with other schools. It is premature to talk about layoffs, he said, although he indicated some "type of restructuring will be required."
"I certainly don't believe failure is an option," he said.
Minister of Indian Affairs and Northern Development Chuck Strahl told reporters yesterday that the $3-million represents the same level of funding on a monthly basis as the school received last year. "They've got other issues that so far have not been addressed including things like severance packages, outstanding debt, money that's gone missing, a bunch of other academic problems, what they're going to do with some of their campuses," he said. "This money certainly will get them through till the end of August."
Jim Turk, head of the Canadian Association of University Teachers, called the last-minute funding announcement a smokescreen. "The federal government knows the money it is giving will not allow the university to survive," he said.