New Brunswick·CBC Investigates

Atlantic Lottery Corporation reveals new spending details as audit results loom

As a joint audit was underway, ALC quietly started posting executive salaries and detailed monthly expenses on its website.

ALC quietly started posting salaries, expense details online ahead of Oct. 26 release of joint audit

Brent Scrimshaw, the president and CEO of Atlantic Lottery Corporation, says the corporation has been moving toward greater transparency over the last three to four years. (CBC)

The Atlantic Lottery Corporation is giving the public a deeper look at its salaries and other spending, as the Crown corporation awaits the release of a joint audit by all four Atlantic auditors general.

The audit, due to be released on Oct. 26, will examine ALC's salaries and expenses, how contracts are awarded and how the corporation is governed.

As that probe was underway, in June ALC quietly started posting executive salaries and detailed monthly expenses on its website.

​​The move is the continuation of a trend toward greater transparency that ALC has adopted over the last three or four years, president and CEO Brent Scrimshaw said.

The corporation decided to release more detailed expenses, he said, because "it's just the right thing to do."

"We operate largely on the basis of public trust," Scrimshaw said. "If we have a social licence, that's what it is grounded in."

That change in attitude is a long time coming, according to former New Brunswick ombudsman Bernard Richard.

Crown corporations, including ALC, tend to lag behind government bodies when it comes to transparency, he said.

Ontario's provincial government, for example, has been publicly sharing a "sunshine list" of employees who make more than $100,000 since 1996.

"It has a tendency to act in a way that will protect politicians and government," Richard said about ALC.

"For that reason, we don't always have access to all of the information that we should have. If we're to build the kind of trust that the public needs to have in these kinds of public bodies, then more transparency is called for."

First ALC audit since 1996

Atlantic Lottery Corporation is being audited by auditor generals from all four Atlantic provinces. (CBC)
The joint audit marks the first time in two decades that ALC has fallen under the microscope of all four Atlantic provinces.

When the audit was announced last year, the four auditors general said there was no specific trigger that prompted them to team up and dig deeper into ALC.

But the announcement came as both New Brunswick and Prince Edward Island lost millions of dollars of public money in ALC's failed investment in a British online gaming company.

ALC eventually wrote off its $8.7 million investment in the GeoSweep lottery game, throwing in the towel in June 2015.

In December, New Brunswick Auditor General Kim MacPherson raised red flags about the lack of due diligence involved in that investment, both by ALC and New Brunswick's Lotteries and Gaming Corporation.

At the same time, MacPherson also flagged an ALC calculation error that cost New Brunswick at least $14 million in overpayment to First Nations communities.

In an interview at the corporation's Moncton headquarters, Scrimshaw said ALC will use the joint audit findings to make the corporation "a better operation."

While ALC didn't have the audit's recommendations when the corporation decided to post salaries and expenses, Scrimshaw admitted the audit played a role in that decision.

"Some of what you're seeing certainly was influenced by the work the auditors general have done," he said.

By the numbers

Atlantic Lottery Corporation is now posting details of executive salaries and monthly expense reports on its website. (CBC)
The highest-paid executive was Scrimshaw, who made $314,085 in salaries and bonuses in 2015-16, plus an additional $50,210 in benefits.

Another 32 ALC employees — about five per cent of the corporation's 607-person workforce — received at least $100,000 each in salary, not including bonuses.

"We have conducted quite broad research within the region, using outside experts to come in and look at where our salaries, in fact where our total rewards, should exist," Scrimshaw said.

"It's based on that work that my salary was set."

In April 2015, ALC started posting copies of quarterly expense reports online for executives and board members.

The corporation switched to more detailed reporting this past June, posting details of expenses monthly and executive salaries.

The documents are difficult to find on ALC's website unless you're looking for them. But Scrimshaw promised that will change when ALC launches a new website.

A trip to Berlin

Executives and board members claimed a total of $20,037.82 in expenses in July and August 2016. (CBC)
The most recent expense report, for August, reveals that executives claimed $20,037.82 in meals, accommodations and travel.

That includes $6,376.13 spent to send a board member and one executive to Berlin for a conference.

"I didn't see anything unusual in terms of the food or accommodation or travel expenses," said Dan Shaw of Dalhousie University's Rowe School of Business, who examined the travel expense reports and salary list on behalf of CBC News.

But Shaw questioned the number of employees making over $100,000, given the cost of living in Moncton.

"Do they need to be making over 100?" he said. "I don't know. I think they're paying better than a lot of companies out there."