Lottery Corp told to trim lavish spending

NEWS RELEASES

OFFICE OF THE AUDITOR GENERAL OF ONTARIO

ONTARIO LOTTERY & GAMING CORPORATION

************************* OLG should spend more prudently, auditor general says in special report

TORONTO, June 1 - The Ontario Lottery and Gaming Corporation (OLG) needs to spend more prudently on employee meetings and events attended by senior staff, Auditor General Jim McCarter says in an 18-page Special Report, OLG's Employee Expense Practices, released today.

McCarter's report noted instances of meals at expensive venues, an annual conference for senior gaming employees that cost more than $500,000 and team-building events held at resorts and spas.

The Auditor noted that the need for more prudence in these and other areas such as employee recognition and reward programs largely related to areas where no specific expense policies were in place at OLG.

However, McCarter did observe that "where policies were in place for employee expenses, the policies were reasonable and, for the most part, OLG staff generally complied with such policies."

His report also noted that OLG leases a fleet of vehicles for 26 senior executives with the allowable cost for executive vehicles ranging from $41,519 to $57,512 - significantly higher than the maximum of $30,000 set by the province for vehicles provided to Ontario government deputy ministers.

Another 16 executives opted instead for car allowances of up to $24,000 a year.

At Ontario ministries, by comparison, only deputy ministers are entitled to provincially supplied vehicles.

"Because OLG receives its revenues from commercial activities, the province has allowed it considerable flexibility in making financial, human resource, and administrative decisions," McCarter said in his report, conducted at the request of the Minister of Finance.

"However," he added, "OLG is a public agency, and it is therefore reasonable to expect it to manage public resources prudently in meeting its business objectives."

McCarter recommended that OLG's new board review its employee meeting and conference arrangements, employee reward and recognition programs, and its executive fleet arrangements.

With 7,700 employees, OLG markets a variety of lotteries and sports-game tickets, and is directly responsible for five casinos and 17 slot facilities at horse racing tracks.

It also has operating agreements with private companies to manage four resort casinos in the province.

For more information and to view the full Special Report, please visit here.

Printed copies of the Special Report are available by calling (416) 327-2381.

************************* Ontario Lottery and Gaming Corporation's response to Auditor General's report statement from OLG chair, Paul Godfrey

TORONTO, June 1 - When I first arrived at OLG, the Auditor General and his team were already well underway in a review of employee expenses.

There was something that struck me right away about the work they were doing.

It was clear they had targeted specific areas for review, with an eye towards the long-term good of OLG.

This wasn't about punishing a Crown agency, as much as it was striving to improve it.

They asked for our help and cooperation and always received it.

In turn, they have now helped us.

The Office of the Auditor General has produced a fair and balanced report with findings that are accurate and appropriate.

It contains valuable recommendations giving me and my colleagues on the new board clear direction on work that remains to be done.

I'm pleased they've pointed clearly in the report to some of the efforts OLG has already made in changing its expense practices.

Back in the fall, OLG fully adopted the Management Board of Cabinet's Travel, Meals and Hospitality Expenses Directive.

Our employees have gone through online training to make sure they understand the policy clearly and can follow through on it.

Other programs, including some employee reward and recognition initiatives, have been shelved or are being phased out.

OLG is a different kind of entity from most other government operations.

Yes, it is a public agency - but it's also a revenue-generating corporation that operates in a hotly competitive commercial environment.

And it has succeeded in that setting.

Down through the years, OLG has generated more than $32 billion dollars for the good of this province.

These are dollars that go to hospitals, schools, amateur sport, cultural activities, local and provincial charities and non-profit organizations through the Ontario Trillium Foundation.

Every dollar we spend in our every-day business practices, is one less dollar that goes to those causes . . . it's one less dollar to the taxpayers of this province.

This new board is clear in its expectation this agency will adhere to government practices in terms of prudent use of taxpayer dollars.

It's clear to me, even from my short time at OLG, there is a strong desire from the staff to meet that expectation fully.

*************************