Auditors general urge Atlantic Lottery reforms

The Atlantic region’s auditors general highlighted in a report released on April 26 that several key recommendations made to Atlantic Lottery Corporation (ALC) more than five years ago are still yet to be implemented.

Back in 2016, the auditors general’s report advocated for an update to ALC’s shareholder agreement and bylaws, which the auditors general say hasn’t happened in a decade. The shareholders of the corporation are the gaming commissions of the region’s four provinces.

That is among four of nine 2016 recommendations intended to improve the corporation’s governance and business agility which have not been fulfilled.

“The board needs direction from its shareholders and that’s why the (shareholder agreement) is an important document,” Nova Scotia auditor general Kim Adair said, as quoted by Global News. “It is the overriding agreement that sets the framework and objectives of the organization.”

The report also noted the region’s governments have not completed a review of the corporation’s underfunded pension plan, which has swallowed up $87 million in potential profit in order to cover a shortfall between 2012 and the end of 2021, although it did recognize that a pension committee has been authorized to oversee the plan.

In addition, a long-standing disagreement over whether elected officials and government employees should be excluded from the board has not been resolved, an issue which had been flagged in 2016 and reiterated in a 2019 follow-up report. The region’s provincial governments, the report said, maintain that it is in their best interests to continue having civil servants as voting members of the board.

The four governments have agreed to appoint eight independent voting shareholder representatives and keep the remaining four spots on the board for senior public servants. They have also agreed to create staggered three-year terms for members of the board.

However, the report noted that there is no term limit for the chairman of the corporation’s board. The current chair, Sean O’Connor, has been in his role since 2007 after having served as vice-chairman since 2000, and the auditors said that tenure is much longer than best practices recommend.

Adair said she and the other three auditors general think their recommendations are necessary to ensure the proper operation of the corporation, which has been around since 1976. “It has functioned very well, but they are in a very dynamic and competitive industry,” she said.

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