National Newswatch

HALIFAX — Atlantic Canada's auditors general say there's still work to be done reforming governance at the Atlantic Lottery Corporation in the wake of their report that found lavish spending, including $111,000 for staff holiday parties.

They say the four provincial governments have taken action on just 22 per cent of recommendations in a joint 2016 report from the auditors — and in particular failed to address concerns over how the lotto corporation is governed.

The four provinces have not yet excluded elected officials and government employees from the board as recommended, and not made other public servants on the board non-voting, ex-officio members.

"Failure to implement these recommendations risks impeding the board's fiduciary duty to the corporation and its overall effectiveness in providing sound governance," the auditors said in a report Wednesday.

It comes down to a difference of opinion, the auditors said: the governments told them they believe it is in their best interest to continue to have civil servants as voting directors.

However, the report also said the corporation's by-laws had been updated to require staggered three-year terms for directors, while the four governments use competency-based processes to appoint eight independent voting representatives to the board. The remaining four positions are held by senior public servants.

Further, the auditors say a failure to implement five additional recommendations from 2016 may hinder the corporation's effectiveness and the provinces' ability to evaluate the corporation's performance and future sustainability.

Among those recommendations was a call for an in-depth review of the corporation's mandate in relation to how it fits with each government's gaming policy.

All four provinces have since said they had reviewed the mandate and communicated instructions to the corporation.

"This is not a situation where these are recommendations that they don't intend to implement," Nova Scotia's auditor general, Michael Pickup, said in an interview. "It's not like they haven't done anything."

Meanwhile, the auditors said they are pleased that all 16 recommendations made to the corporation were implemented following the October 2016 report that found thousands of dollars were spent on lavish dinners and Christmas parties, boosting executive salaries and handing out generous perks to politicians.

"For me it's a reminder that this was taken seriously and it can be done and the recommendations were practical and feasible," said Pickup.

The 2016 joint audit, the first of its kind since 1996, called for greater oversight and transparency.

It looked into management of the corporation, and found confusion in decision-making due in part to a lack of co-ordination between the board, management and the governments that own it.

It also raised questions about corporate spending practices, pay hikes and $73,000 spent on concert and event tickets for so-called stakeholder relations.

The auditors highlighted a staff Christmas party in Moncton, N.B., in 2013 that cost $14,000, adding that $111,000 was spent on staff holiday parties during the audit period of April 1, 2013, to Aug. 31, 2015.

The corporation previously said it would eliminate company-funded holiday events and scale back employee recognition spending.

Pickup noted the corporation has made improvements since 2016.

"In all of those areas, if you don't tighten the holes that exist they expose you to bad things happening," he said. "I'm so pleased they acted upon this."

Keith Doucette, The Canadian Press

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