A litany of governance and oversight issues are putting the Atlantic Lottery Corporation at risk, say the regions’ auditors general.
In a joint report released Wednesday, the auditors general for Nova Scotia, New Brunswick, Newfoundland and Labrador, and P.E.I. say changes are needed to the legislation and regulations that govern the corporation.
They say changes are needed to give the lottery corporation a clear direction and make clear the parameters in which the board functions.
“Weaknesses” in governance and oversight “have resulted in increased risk” to the lottery corporation and the provincial governments, says the report. Those weaknesses could also dampen revenue growth for the provinces and possibly lead to a loss of market relevance for Atlantic Lottery Corporation.
Maximum compensation for executives increased by 56 per cent
The auditors general also question “significant” increases in compensation for ALC executives.
Changes put in place since 2014-15 mean that by the end of 2016-17 the chief executive officer could be making less than lower ranking executives — chief financial and chief operating officers.
Overall the compensation available to the COO and CFO increased by 56 per cent in three years, the report notes. Across the corporation executive salaries increased between 20 and 40 per cent, and increases to the maximum annual bonus ranged from 50 to 220 per cent.
The report says that the increases in compensation were approved by the board but not approved by the four provincial governments.
The auditors general says the increases were based on a review of executive compensation in Canada. They say the review was prompted because of a high turnover rate but the report says there was not sufficient evidence to show compensation was the driving force in turnover.
Governments intervened too much
The audit also says Atlantic Canadian governments have both intervened too much in the running of their lottery corporations and failed to provide appropriate guidance, resulting in some costly investment failures.
The report several examples of government interference, including Nova Scotia telling the corporation to pay a private company $1.26 million despite management’s and the board’s serious concerns with it.
— With files from The Canadian Press
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