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JSC disturbed no audits in 5 years
Although the National Lotteries Control Board (NLCB) yesterday boasted of $300 million in profit following some $2.8 billion in sales during 2016/2017, the best ever performance in its existence, it was still taken to task by a Joint Select Committee for failing to submit annual reports to the Finance Ministry since 2012. This has resulted in the State-owned entity neglecting its statutory obligations.
The company’s checks and balance systems came under scrutiny by the JSC, after it was revealed despite raking in decent profits for the past five years it was unable to offer a decent remuneration package to keep an internal financial controller. This has resulted in the NLCB being unable to provide financial statements since 2012 to present.
Questions also arose regarding the NLCB having its own authority to hire personnel for key top positions and granting perks as board members saw fit.
JSC chairman Ian Roach chastised the NLCB for deliberately misleading them, as in its written submission it said all financial records were updated.
“This would be a far cry in terms of complying with the National Lotteries Act,” Roach said.
This also prompted Opposition Senator and member Khadjiah Ameen to say the NLCB’s written submission to the committee ought to be taken “with a heavy dose of salt.”
NLCB chief accountant Leslie Ann John said in 2013 the financial controller left but had prepared audits up to 2009 then.
“In 2014 we had another financial controller and he would have prepared up to 2012. In late 2015 we got another controller who left in 2016 and was responding to the management letters issued by the Auditor General,” John said.
John said they were unable to retain a financial controller over the years because the $18,500 salary was seen as unacceptable. But human resource assistant Yana Mollino said the terms and conditions were set by the chief personnel officer.
“Because the position is contract, the board’s hands are tied as to what it can add to the package,” she said.
NLCB chairman Marvin Johncilla said a financial controller’s position was difficult to fill given its area of skills, adding the board was constrained over the years in getting people with the required competencies. But he said only last month they sourced a “qualified financial professional” who is currently dealing with the backlog, which is now expected to be cleared in several months. Another troubling factor was the absence of an audit committee, which existed under the previous board.
The JSC also heard there were positions which remained under contract due to a lack of Cabinet approval since 2013. Mollino said the board was not allowed to recruit without Cabinet approval, resulting in some positions being continued under contract arrangements.
The committee was told in order to boost sales, the NLCB tried a range of things from offering new products to hiring more field agents, while mobile gaming was also in the works.
But deputy director Ricardo Borde said illegal “play whe” continued to contribute to a decline in profits, since illegal operators offered their game at higher odds and payouts. NLCB director Michael Jogee said the board was working with the Financial Investigative Bureau to crack down on illegal operators.
On remuneration, the JSC heard the board provided the terms and conditions for managers, including executive management.
Ameen expressed concern that the board seemingly had power to pay itself hefty benefits. Johncilla said this was incorrect, but admitted the board “engaged from time to time in sourcing talent” difficult to find under the service provision contract.
The NLCB also spent $37 million in sponsorship during 2014-2015 under the previous board, the highest ever, but this figure was down to $28 million in the current fiscal year. Asked how the monies were allocated for sponsorship, the JSC was told this came via board directives.
In his closing remarks, Roach described the NLCB as a critical revenue stream for the country, especially given the current economic challenges.
“Clearly, from the discussions, it seems there is some bit of internal tightening in terms of internal controls and your audit committee ... We are hoping your audit committee will be on stream very soon because it is a critical part in dealing with breaches given the high volumes of cash, especially in these lean times,” Roach said.
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