Nfld. & Labrador

Atlantic Lotto gets thumbs-up, governments do not in joint AG review of actions

Two years after blasting the Atlantic Lottery Corporation for lavish spending, the region's auditors general say the organization has acted on all of their recommendations for improvement — but shareholder governments have not.

Region's auditors general looked at status of recommendations from 2016 ALC audit

A hopeful customer with a break-open ticket from the Atlantic Lottery Corp. (Ted Dillon/CBC)

Two years after blasting the Atlantic Lottery Corporation for lavish spending, the region's auditors general say the organization has acted on all of their recommendations for improvement — but shareholder governments have not.

The auditors general for Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador worked together on a joint audit to call for 25 changes at the corporation and its four shareholder governments back in October 2016, then joined forces again in October last year to see where those recommendations stood.

That report was released Wednesday.

In it, the auditors general said they are pleased the ALC has acted on all 16 recommendations. But with just two of the nine recommendations made to governments responsible for the corporation implemented, the auditors general said the provinces need to make more of an effort.

Failure to implement these recommendations may hinder ALC's effectiveness.- Atlantic auditors general

"ALC is a profit-oriented Crown corporation operating in a rapidly evolving industry. In order to remain relevant into the future, it needs more timely strategic direction and policy guidance from the shareholder governments," says the report. 

According to ALC's 2018 annual report, the corporation returned more than $400 million in profits to the four provinces last year. 

Gifting tickets, extravagant parties

Some of the questionable spending and practices that prompted the 2016 audit included $73,000 in event tickets — some of which were given to senior government officials — $111,000 on two years' worth of corporate Christmas parties, and a flopped game called GeoSweep

But the auditors general found the ALC had remedied all of the problems identified in lack of oversight and public disclosure. For example, it shares compensation, no longer buys event tickets to give to government employees and elected officials, and requires detailed invoices from vendors it works with.

It also changed its policy for travel and expenses, part of which includes addressing whether alcohol is an acceptable expense and reimbursing a claim only when adequate proof is provided. 

The Atlantic Lottery Corporation has overhauled many practices following a 2016 joint report by the region's four auditors general. (CBC)

Some of the implemented recommendations for ALC's board of directors include setting measurable performance targets for it, and a critical look at relevant experience and skills of people on it "when evaluating a new or unusual business ventures." The board got direction from governments on appropriate compensation packages for staff, such as salaries and benefits, and set policies on spending for Christmas parties. 

Governments not so quick 

When it came to what the Atlantic governments had not yet done by last October, the auditors general were clear. 

"Failure to implement these recommendations may hinder ALC's effectiveness in making timely business decisions and in the shareholders' ability to evaluate ALC's performance and future sustainability," says the report. 

Of the nine changes for the provinces, one and part of another were completely rejected.

Those had to do with no longer allowing elected officials or bureaucrats on the board, or changing the role of public servants on the ALC board to be non-voting instead of voting members.

Brent Scrimshaw is the president and CEO of the ALC. (CBC)

Although the auditors general recognized their value as board members, writing, "for complex areas such as gaming, they can speak to government priorities and address government concerns directly," they said that should be separate as it poses a conflict. 

A member may want to support a decision as a government representative that isn't good for the ALC or vice-versa. However, the governments flatly refuse to change those roles. 

As for the other recommendations, like an in-depth review of the ALC's mandate and clear and public performance expectations to make it more transparent, the report says "many are waiting for final review and approval by senior levels of government before considering them to be fully implemented."

One — an ongoing review of the Council of Atlantic Premiers pension plan — has not been touched. 

Governments gave updates on the outstanding recommendations in February, but the auditors general have not had an opportunity to confirm their accuracy. 

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