CET
Peel District School Board’s Centre for Education and Training (CET) is not the prosperous endeavour it once was and after having to write off almost $8 million in operational debt last year, the organization has been offered up to the highest bidder.
The public school board is selling the not-for-profit corporation it created more than a decade ago.
Peel District School Board’s Centre for Education and Training (CET) is not the prosperous endeavour it once was and after having to write off almost $8 million in operational debt last year, the organization has been offered up to the highest bidder.
The right buyer and price have been found for the centre and the school board’s for-profit operation known as the Halton Business Institute (HBI).
While the deal is awaiting government approval, school board officials are refusing to release details of the sale until they get the official blessing from Queen’s Park.
Peel board established CET in 1996 as a not-for-profit corporation developing and providing a wide range of education and career training programs to the general public.
Locations in Peel, Halton and Toronto offer continuing education, employment assistance and corporate training programs as well as programs and services for recent immigrants.
CET was set up to run at arms-length from the school board— operating with its own board of directors and staff. It still generates millions of dollars in revenue, mostly from federally-funded contracts to provide community services and programs.
When the board established the corporation there was hope any profits produced could flow back to the school board to support its operations.
At one time, the centre proved highly successful and it was making significant contributions to school board coffers.
That was before the federal government tightened access to grants, accusations senior staff members were misappropriating funds, a police fraud investigation and millions of dollars in operating debt.
Legal proceedings eventually salvaged the reputations of former staff, but CET’s best days had passed.
Swimming in red ink, the organization had to borrow about $7.6 million from the school board to cover operational costs. CET has essentially been a break even operation since the board wrote off that loan.
With an eye for something more lucrative, in October 2003 the board purchased the Halton Business Institute (HBI)— a for-profit private career college. The college and CET were operated under the umbrella of the Quality and Continuous Improvement Centre (QCIC).
The two organizations are now a package deal on the auction block.
“We’re in the process of finalizing its sale,” explained Peel Board Chair Janet McDougald. “We’re actually selling HBI and with HBI we’ve included CET.”
Detailed public disclosure will not be made until the government okays the transaction, she said, the approval process was interrupted by the provincial election.
According to school board administrators, the search for potential buyers began this past spring.
McDougald said the board wants out of the business. Competition in this sector has grown and profitability has been relatively lack lustre, she suggested.
Expectations are CET will break even this year, said the Board’s Associate Director Carla Kisko. The board’s 2011/2012 budget is projecting $21,899,248 in revenue for CET. Finance department staff reported $24,255,000 in revenue for 2010/2011.
“We have been in a revenue positive position for the last couple of years with CET,” Kisko said in the spring. “This year we are anticipating a break even and next year we are also anticipating break even.”
Combined accounting numbers for HBI and CET show about $3.1 million in profits in 2009/2010 and about $755,000 expected for the 2010/2011 budget year.
While CET and HBI are not costing the board any money, McDougald explained, officials are uneasy about the future given the bad experience with CET and an increasingly competitive marketplace.
“CET created us some financial problems in the past and the board was determined not to ever let that happen again and just decided we really just wanted out of the business,” remarked McDougald. “It really is not our core business.”
School board administrators are no longer confident the business is worth the time, the energy and the resources required from the board, she added.
The continuing education programs that were a part of CET have now returned to the board, McDougald said. The board is simply divesting itself of the private, entrepreneurial courses primarily designed to generate profits, she said.