Public Colleges Oversight

1 Office of the Auditor General of OntarioValue-for-Money Audit: Public Colleges OversightCover photograph credits: 20211 Public Colleges OversightMinistry of Colleges and SummaryTwenty-four publicly assisted Colleges in Ontario annually offer over 3,000 certificate, diploma, degree and apprenticeship programs to almost 350,000 stu-dents in fields such as applied arts, technology and business. The objective of Public Colleges is to provide career-oriented education and training to help students gain employment, meet the needs of employers, and support the social and economic development of Colleges are Crown agencies, established under the Ontario Colleges of Applied Arts and Tech-nology Act, 2002. The Ministry of Colleges and Universities (Ministry) sets out binding policy direc-tives, operating procedures and other requirements for Public Colleges to follow.

2 Each college is governed by a board of governors, which is accountable to the government for their legislated mandate, successful achievement of goals consistent with government pri-orities, and for prudent financial 2020/21, the Ministry provided grant-based funding to Public Colleges totalling $ billion. Public Colleges also received revenue from other sources such as tuition fees, federal and provincial grants (such as employment services grants), ancillary revenue and donations. In 2020/21, the total revenue of Ontario s Public Colleges was $ audit found that the Public Colleges collect-ive net assets (assets remaining after their liabilities) increased $ billion (62%) over the past four years prior to 2020/21.

3 While this increase supports the sector s financial health, it has been primarily due to a significant reliance on international student enrol-ment to subsidize the provincial costs of domestic students education and Colleges administrative and capital expenditures. Direct provincial funding per full-time-equivalent domestic Public college student in Ontario for 2018/19 was the lowest in Canada. Between 2012/13 and 2020/21, Public Colleges experienced a 15% decline in domestic student enrol-ments but a 342% growth in international student enrolments, with 62% (2020/21) of international students coming from India. The decrease in domes-tic students has mainly been due to a change in the demographics of Ontario s population, and high-school graduates pursuing university over college education.

4 About 30% (104,937) of all (348,350) stu-dents enrolled in Public Colleges in Ontario in the fall of 2020 were international increase in international students was influ-enced by prospective students viewing Canada as an attractive destination to study in and enrolling in Canadian post-secondary institutions as a pathway for immigration. international students in the Public college sector contribute to local economies through spending, increase the diversity of Colleges and local communities, and can help regions meet future labour demands where the local demographics are unable to meet employer these benefits, a high reliance on inter-national student enrolment by Public Colleges poses risks outside of the Ministry s and the Public college sector s control, such as the potential loss of a large number of students if individuals from one country were to suddenly not be able to obtain study visas or otherwise be restricted from entering Canada.

5 We 2nursing programs. The Ontario College Quality Assurance Service and the Postsecondary Educa-tion Quality Assessment Board conduct independent quality reviews of non-degree and degree pro-grams, respectively. The Ministry relies on these entities to ensure that Public Colleges offer quality programs. According to the most recent quality assur-ance audits of the 24 Public Colleges , all of them met or partially met the six quality assurance standards established by the Ontario College Quality Assurance Service. As well, since 2008 the Postsecondary Educa-tion Quality Assessment Board has not recommended that the Minister deny consent for any Public college degree programs due to quality the Public college level, we found that most programs offered by the Public college sector are generally aligned with Ontario s projected job market needs.

6 From 2016/17 to 2019/20, depending on the college attended, to of graduates from an Ontario Public college found full-time employ-ment in a related field six months after graduation. As well, from 2015 to 2019, to of employ-ers surveyed by a firm contracted by the Ministry were satisfied or very satisfied with their employees college preparation for their role. However, we found that significant delays in the Ministry s program approval process is hindering Colleges ability to respond quickly to market needs. Further, we found that board governance of Public Colleges could be strengthened in areas such as board member training, conflict of interest processes and board evaluations. Some of our significant audit findings include: international Students Public Colleges are increasingly reliant on tuition fees from international students to remain financially sustainable.

7 In 2020/21, Public col-leges received a total of $ billion in tuition fees from international students, enrolled at both their home and Public -private college partnership campuses, which represented 68% of Colleges total tuition fee revenue. Meanwhile, international student enrolment represented 30% of the total student enrolment. We found that some Colleges found that domestic students continue to have access to Public college programs along with international student growth; however, the Ministry has not assessed how the high reliance on international stu-dents may impact the entire Public college sector over the long term. Partnerships between Public Colleges and private providers for the delivery of Public college programs ( Public -private college partnerships) have existed in Ontario since at least 2005 and are unique in Canada.

8 However, these have significantly expanded in the last two years. As of June 2021, 11 Public Colleges had partnered with a total of 12 for-profit private career Colleges . We found that the Ministry s Oversight of these Public -private college partnerships has not been effective. For example, the Ministry did not act when certain Public Colleges exceeded the Ministry s enrolment limits at their partner-ship campuses and has not put in place compliance mechanisms. Although not under the purview of the Ministry, we also found that the quality assurance processes were not reviewed in a timely manner after these partnerships formed. New Strategic Mandate Agreements were signed between the Ministry and each Public college. The purpose is, in part, to increase accountability and incentivize Colleges to invest in initiatives that have positive labour market outcomes and encourage each college s specialization.

9 Colleges are measured against their own targets, which is a calculation that includes an average of their historical performance. Based on the target-setting formula, we found instances where some targets were set lower than the previous year s targets, despite some Colleges exceeding perform-ance in the previous year. As well, COVID-19 funding was provided to Public Colleges based on projected revenue decreases due to the pandemic, but we found that two Colleges that received funding actually saw an increase in revenue in the year that funding was external organizations assess the quality of programs offered by Ontario Colleges , in addition to other regulatory bodies that provide accredit-ation, such as the Colleges of Nurses of Ontario for 3 Public Colleges Oversightwho deliver the Public college curriculum, provides facilities for students, and manages the day-to-day operations at the partnership campus.

10 Students who graduate from programs delivered by the private career partner Colleges obtain a Public college creden-tial issued by the Public college. These partnerships are financially attractive to Public Colleges , particularly those in northern areas or smaller communities. For these Public col-leges, having a private career college partner with campuses in a large, urban centre such as the Greater Toronto Area, where most international students prefer to study, means gaining an additional source of revenue from increased international student enrolment. Under existing federal government immi-gration policy, international students who graduate from a Public college are eligible for the Post-Gradua-tion Work Permit Program.