Reviewed by Spacing Atlantic

Shareholder Governments Push Back on Final ALC Reforms

The audit uncovered a concerning level of mismanagement at the Atlantic Lottery Corporation. Their expenses were out-of-control, with executives receiving excessive pay hikes and plenty spent on things like concert tickets or holiday parties for staff members. The findings from this 2016 review led to an overhaul in how finances are managed which has improved company efficiency as well as increased public trust–something we’re proud Record.

2022 Follow-Up

The CEO and President of ALC, Brent Scrimshaw, recognized the economic times for this region. “The people here need to tighten their belts too.”

The auditors found many areas for improvement in the ALC’s operations, including improper paperwork and lack of communication.

The ALC continues to dodge some of the recommendations and argue about whether or not they need others.

Remembering the 2019 Update

The auditor general from three years ago has just released a report on the ALC’s progress, which isn’t pretty. In June 2019, they reported that this organization implemented only 22% of recommendations in 2018-19 alone! The auditors found many areas where improvement was necessary, including governance structures around risk management practices as well accountability for investments or financial statements themselves, which represent huge risks if not handled properly.

2022 Follow-Up

The provinces had not excluded their elected officials and government employees from the ALC board, which could continue hindering future performance or sustainability evaluations.

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The ALC has been making positive strides in the right direction. They implemented 16 of 26 recommendations and even got an audit from Nova Scotia’s Auditor General Michael Pickup, who said he was confident they would handle the rest because it “wasn’t too much work.”

2022 Follow-Up

The auditor general’s office is on high alert. In late April, they followed up once again to ensure everything was going well with the audits and investigations into various departments across Canada that were commissioned by this four different auditors-general.”

These auditors are on top of their game! The four offices assessed this report completed their latest assessment last December 31st, 2021.

The report found that as of the end of 2021, there were only five out of nine primary recommendations whose implementation was completed by shareholder governments. In addition to this lack in completion rates for some items on their list (two remain unfinished), it appears all four secondary points will go ignored, too!

The ALC board of directors completed all seven recommendations. And management finished their nine-recommended actions to resolve the government’s issues with this organization!

Completed by Shareholders

The governments are taking care of the following tasks to secure a brighter future for shareholders. The previous follow-up report prompted us to move forward with our necessary actions, and it seems like we’re making progress because this latest update says they took some important steps!

  • Complete in-depth review of ALC mandate for updates to meet public and government gaming policy objectives with the proper organizational structure.
  • Collaborate with the ALC to provide regular and timely policy directions for strategic and business planning duties.
  • Define and document roles and responsibilities concerning overseeing the ALC, including relationships between board members, ministers, and government representatives.
  • Define formal performance expectations of the ALC – clearly and publicly – and update them annually.
  • Clarify the levels of government authority to oversee ALC transactions.

Two Outstanding Points in Progress

The governments have yet to implement two pieces of business that could revolutionize the world.

governments must review the shareholder agreement and corporate bylaws annually. If there are any updates, they must be proposed to incorporate them into this document with other revisions deemed necessary over time- so as not to disrupt operations or hurt companies’ profitability. It can’t just stay like old times when we had complete control!

The governments should complete the review of this Council of Atlantic Premiers pension plan as soon it is available. Any changes must be made after an update for these revisions to stay up-to-date with current practices and standards, so there will likely need some more authorizations before they’re final!

Two Recommendations Refused

The two points on which the governments disagree with their attorneys general are as follows.

As the recommendation pressed for more competitive, transparent and open governance structures to reflect best practices regarding appointments of directors, it called upon shareholder governments that decentralize power by giving voting rights only when there is no other choice. It also suggested limiting elective office holders or employees from being present at meetings where decisions are made, which would allow them an opportunity to voice their opinion but not have any say over what happens in these matters due solely on popularity votes rather than meritocracy as some might think this system allows less qualified people access into high-level positions while allowing better-qualified individuals entry thanks largely because they don’t know anyone else personally.

Secondly, public officials should not be allowed to vote unless they have been convicted of a crime. Third, these people must be independent of any organization or businesses that could benefit them financially while working on the board.

The government representatives are refusing to comply, noting that they have a duty of care towards their employees who work best as voting directors. The auditors general reminded them it is because there’s a conflict between fiduciary duties and policy interests which must be considered when making these decisions.”

The stalemate continues.