FREDERICTON (GNB) – In her latest report to the legislative assembly, Auditor General Kim MacPherson found the New Brunswick Lotteries and Gaming Corporation (NBLGC) has made questionable decisions such as participating in the Atlantic Lottery Corporation’s (ALC) Geonomics investment, and knowingly allowing overpayment errors to several First Nations to continue.

As well, lengthy delays to complete audited financial statements for the 2012, 2013, 2014 and 2015 fiscal years were deemed unacceptable by the auditor general. For example, the NBLGC financial statements for 2013 were completed two and a half years after year-end.

The report shows that NBLGC recorded a loss of approximately $4.3 million through its participation in ALC’s Geonomics investment.

Also the auditor general found that between 2002 and July 2015, overpayments to seven First Nations totalled $14 million due to Video Lottery Terminal (VLT) net profit calculation errors. The calculation errors were discovered in 2013 and disappointingly, have not been corrected as of October 2015.

“NBLGC is knowingly continuing the overpayments at the rate of $172,000 per month,” said MacPherson “In my opinion, NBLGC should discontinue making unauthorized overpayments to First Nations immediately.”

The auditor general was also concerned upon learning at the time of her  fiscal 2013 audit there were more than 300 unauthorized VLTs operating throughout the province. 

“This represents a potential reduction of revenue available to the province’s consolidated fund to finance programs such as education and health care,” said MacPherson.

In addition, the auditor general found the NBLGC board of directors governance practices were weak. This may have contributed to the problems identified.

The auditor general made recommendations to NBLGC in a wide range of areas including:

  • performing due diligence procedures for future investments similar to Geonomics;
  • discontinuing making unauthorized overpayments to First Nations immediately;
  • recovering the overpayments made to date;
  • reviewing and obtaining support for third-party information items or amounts; and
  • adopting improved governance practices for the NBLGC board of directors.

Additionally, it was recommended that the Department of Public Safety more proactively monitor and increase compliance initiatives to reduce or eliminate unauthorized VLTs.

The New Brunswick Lotteries and Gaming Corporation chapter can be found in Volume III of the 2015 Auditor General Report which presents matters arising from the annual financial audit of the province and Crown agencies. Volume IV, also released today, reports new performance audits completed in 2015. These volumes and one page summaries for select chapters are available online.