Report: Audit Committee - November 19, 2025

REPORT NUMBER 166 OF THE AUDIT COMMITTEE

Wednesday, November 19, 2025

CLOSED SESSION

1. Chair’s Remarks
   
   The Chair welcomed members and guests to the meeting.

2. Reports of the Administrative Assessors
   
   Professor Scott Mabury, Vice-President, Operations & Real Estate Partnerships, provided an update on business continuity tabletop exercises. He reported that the most recent exercise expanded the usual 30–40 participant format into a cross-campus critical incident exercise involving approximately 250 participants. The exercise used the 2022 Rogers outage as the scenario and included support from a Rogers representative. He noted that the University plans to continue expanding these exercises to further strengthen institutional preparedness and coordinated incident response.

3. Revisions to the Audit Committee Terms of Reference
   
   Ms. Sheree Drummond, Secretary of the Governing Council, presented proposed revisions to the Audit Committee Terms of Reference.
   
   The proposed revision aligns the Committee's membership with a change in the University's senior administrative structure regarding responsibility for Enterprise Risk Management. Specifically, the revision adds the Chief Legal Officer as an ex officio non-voting assessor to the Committee.
   
   On motion duly made, seconded and carried

IT WAS RECOMMENDED,

THAT the proposed revised Audit Committee Terms of Reference be approved, effective December 12, 2025, replacing the Terms of Reference previously approved on December 15, 2022.

4. External Auditors: Report on Non-Audit Services, Engagement Letter, Audit Plans, and Audit Fees
   
   The Committee received and reviewed the 2026 Audit Plan, including the Engagement Letter for the year ended April 30, 2026, and the Report on Non-Audit Services.
   
   Mr. Jeff Lennon, Interim Chief Financial Officer, noted that the Engagement Letter outlined the terms of engagement with Ernst & Young, summarizing the audit approach for 2026 and areas of audit emphasis and risk. He mentioned that the audit plan considers prior year results and current market conditions, with a planning materiality set at $110 million, based on 2.5% of forecasted total expenses. Unadjusted differences exceeding $5.5 million will be reported. The audit timing includes interim procedures starting December 2025 and year-end procedures in May 2026.
   
   Ms Kathi Aspros, Engagement Partner, Ernst & Young, reported that the audit plan emphasizes revenue recognition (including student fees, grants, and sales), pension and retirement benefits, investments, significant contracts, legal matters, and the risk of management override of controls. She highlighted the audit’s alignment with the University’s Strategic Mandate Agreement (SMA4) performance metrics effective April 1, 2025. Ms Aspros also described continued enhancements to the audit process, including use of AI capabilities and digital collaboration tools to increase audit efficiency and quality.
   
   Regarding the Report on Non-Audit Services, Mr. Lennon confirmed that payments to Ernst & Young for the period October 1, 2024, to September 30, 2025, totaling $243,044, were reviewed and deemed not to impair auditor independence.
   
   It was noted that future engagement letter approvals will align with the appointment resolutions for the external auditors.
   
   Discussion
   
   Members inquired whether the audit planning materiality of 2.5% of forecasted total expenses appropriately reflected current financial pressures and requested clarity on how corrected and uncorrected differences would be evaluated and reported. Ernst & Young noted that while overall materiality is set using standard benchmarks, lower thresholds are applied in certain areas and unadjusted differences are assessed both quantitatively and qualitatively. The auditors indicated they would be open to revisiting thresholds with the Committee if desired.
   
   Members also sought assurance regarding auditor independence, including the criteria used to assess whether proposed non-audit services could impair independence. Ms Aspros confirmed that it applies independence safeguards and internal review processes and that any potential conflicts are escalated and discussed with management in advance of undertaking non-audit engagements.
   
   On motion duly made, seconded and carried

IT WAS RESOLVED

THAT the Audit Committee accept the external auditors’ engagement letter for the University for the year ended April 30, 2026, as outlined in the report from Ernst & Young dated November 5, 2025.

5. Annual Administrative Accountability Reports, 2024-25
   
   The Committee received the Annual Administrative Accountability Reports for 2024-25 for information. The President confirmed that all direct reports have complied with administrative and financial responsibilities, with no negative findings. Deans and Principals submitted accountability reports reviewed by the Vice-President and Provost, also without negative responses.
   
   The Finance Division expanded the use of an online tool to facilitate and streamline accountability reporting across more units, improving efficiency and compliance oversight. Overall, the reports demonstrate continued strong administrative accountability and effective governance across the University.
   
   Discussion
   
   In response to members’ questions regarding assurance that the administrative accountability signoffs were taken seriously and provide meaningful assurance, particularly given the University’s distributed accountability model, Mr. Sanish noted that accountability reporting is intentionally distributed, with managers collecting attestations from staff and escalating them through the reporting line. It was acknowledged that the central administration does not review every unit-level report in detail and that an appropriate level of oversight was achieved through the cascading attestation process.
6. Enrolment Report to the Ministry of Colleges and Universities: Audit, 2024-25
   
   The Committee received and reviewed the Enrolment Report to the Ministry of Colleges and Universities (“MCU”) for the 2024-2025 academic year.
   
   Mr. Lennon reported that under the current Strategic Mandate Agreements, a growing portion of enrolment-based funding is allocated through a differentiation envelope linked to performance metrics. For the 2024-25 fiscal year, approximately 60% of funding is expected to flow through this envelope, with 25% of total funding tied to performance metrics, an increase from 55% and 10%, respectively, in the previous year.
   
   He noted that while the overall operating grant funding remains stable, the distribution between core funding and performance-based funding continues to evolve. Current provincial funding trends for 2024-25 reflect overall high-level investments in publicly assisted postsecondary institutions, including targeted grants for capital repairs, STEM program support, and sustainability initiatives.
   
   Eligible full-time equivalent (FTE) enrolment and Weighted Grant Unit (WGU) figures continue to be closely monitored, reflecting minor planned changes aside from strategic growth areas such as nursing, medicine, and integrated health programs.
   
   Mr. Lennon emphasized that despite the tuition freeze and funding constraints, the University remains committed to maintaining enrolment within funded corridors while managing the impact of evolving provincial policies and performance frameworks.
7. Internal Audit Semi Annual Report for the period May 1 to October 31st, 2025
   
   Mr. Alex Matos, Director, Internal Audit, provided an overview of semi-annual internal audit activity for the six months ended October 31, 2025.
   
   The report summarized the activities of the Internal Audit Department from May 1 to October 31, 2025, highlighting progress toward the department’s long-term vision and plans for the remainder of the fiscal year.
   
   The Annual Internal Audit Plan for 2025-26 has remained generally on schedule, with some adjustments due to increased management engagement and personnel changes. Key themes included challenges and opportunities for improvement in resource deployment, data management, oversight, and a continued focus on leveraging technology.
   
   The Internal Audit Department expanded its engagement within the university community, supporting educational initiatives and enhancing continuous audit functions to address significant institutional risks. Assistance was also provided to Ernst & Young for the audit of the University’s financial statements, enrolment audit, and other program audits.
   
   Discussion
   
   In response to a member’s question regarding EY’s perspective on the sufficiency of the University’s internal audit function and the robustness of its work plan, Ms Aspros advised that it works closely with Internal Audit throughout the year and described the internal audit program as robust and appropriately focused on the University’s key risks and priorities. Recognizing that resource constraints are common, Ms Aspros also noted that Internal Audit has been effective in adapting its plan and prioritizing areas of greatest significance to the University.

CONSENT AGENDA

8. Report of the Previous Meeting – Report Number 165 (September 17, 2025)
   
   The report of the previous meeting was approved.  
9. Business Arising from the Report of the Previous Meeting
   
   There was no business arising from the report of the previous meeting. 

10. Date of the Next Meeting: February 25, 2025, 4:00 p.m. – 6:00 p.m.
    
    The Committee was reminded that its next meeting would be held on February 25, 2025, 4:00 p.m. – 6:00 p.m. 

END OF CONSENT AGENDA

11. Other Business
    
    There was no other business. 

The Committee moved In Camera.

12. Risk Dashboards
    
    The Committee reviewed the updated Risk Dashboards, which reflect the most current data available for the University’s identified high, major, and moderate risks.

13. Risk Presentation
    
    The Committee welcomed Professor Trevor Young, Vice-President & Provost, Professor Kelly Hannah-Moffat, Vice-President, People Strategy, Equity & Culture, and Ms Christine Szustaczek, Vice-President, Communications, who delivered a presentation on risks related to student and employee misconduct and threats to safety on campus.
    
    The presentation outlined key types of misconduct among students, including violence, sexual harassment, policy violations, disruptive behavior, and vandalism or theft, highlighting their physical, psychological, legal, financial, and reputational impacts on the University. It reviewed recent mitigation efforts, such as policy updates, training initiatives, and new case management tools designed to enhance coordination and support for students.
    
    Employee misconduct risks were similarly explored, covering workplace harassment, violence, sexual harassment, discrimination, incivility, and other behavior inconsistent with employment expectations. The presentation emphasized the legal, operational, financial, and reputational consequences of such misconduct and outlined existing policies, guidelines, and training programs aimed at prevention and early intervention.
    
    A significant focus was placed on the reputational risk the University faces from misconduct incidents and the importance of transparent communication, privacy considerations, and proactive reputation monitoring. Mitigation strategies include continuous reporting to governance bodies, climate and culture reviews, complaint process improvements, and ongoing policy development.
    
    The Committee noted the University’s comprehensive approach to managing misconduct risk through policy, education, support, enforcement, and communication to preserve campus safety and institutional reputation.

14. Internal Auditor: Private Meeting
    
    Members of the administration absented themselves and the Committee met privately with Alex Matos, Executive Director, Internal Audit.

15. Committee Members Alone
    
    Committee members discussed topics of interest.

The Committee returned to Closed Session. 

The meeting adjourned at 6:03 p.m.

November 21, 2025