OLG Runs Out of Luck with Audit Showing Misuse of Funds

In a delayed publication of an audit report, findings show that Ontario Lottery and Gaming Corporation misappropriated funds. The Canadian Government published the results of the two-phase audit on 8 October 2021, although they completed it in June and December 2020.

The province’s premier, Doug Ford, requested the audit in 2019 when he discovered what executives of the government gambling monopoly were earning. It turns out that the independent auditor general’s office was not the team responsible for the audit results, and this raised a few eyebrows.

 Excellent Dividends for Stephen Rigby

In 2019, a series of reports in the Toronto Sun exposed salaries of executives in service of OLG and made specific mention of the former CEO, Stephen Rigby. Rigby, who stepped down in the meantime, enjoyed a salary increase of approximately 75% over the five years that he managed the gambling corporation. He earned an unprecedented CA$797,309 by the time he left the crown corporation. Premier Ford commented, saying:

“There’s one thing I won’t tolerate is people wasting taxpayers’ money. So, once we get the audit done, we’ll make sure we’re transparent, we’ll be talking to the media and you can look at the audit.”

An internal division of the government conducted the audit and even though the report eludes OLG’s financial performance, it uncovers the misuse of funds. A whopping 29% of the credit card expenses went to office revamps and furniture, as well as travel expenses, violating credit card policy. It seems Rigby is quite the jetsetter, as he enjoyed flights between Ottawa and Toronto while OLG footed the CA$20,000 bill. The OLG board also approved expenses covering Rigby’s rent for 9 months.

 An Executive Affair

The tax-funded agency paid their executives CA$11,1 million in salaries during 2019. Other government-owned companies pay their execs much less in comparison, with Metrolinx paying the highest at CA$7,2 million.

The crown company’s executive team expanded 36% during the period of 2016 and 2019, while the rest of OLG’s staff complement diminished by 82%. Some of these senior staff members received salary increases between 16% and 46% from 2015 to 2018. The standard increase at government-run corporations is 3% to 10%.

Seeing that tax money funds OLG, it is extremely important that an unbiased auditor does a review. Findings from the internal OLG board audit, completed in February 2020, concluded that those expenses were authorised and appropriate, also stating that the OLG was in adherence with applicable policies.

In an interview with The Star, Toni Bitoni, the OLG’s spokesperson, said that the credit card expenses were found to be legitimate work-related expenses. Regarding the executive salaries, Bitoni reassured everyone that an independent review “confirmed these salary ranges fall within market rates for the broader public sector”.

The report does not go into detail about the previous CEO.

 Whose Dreams Are Coming True?

In 2014, the auditor general instructed OLG to provide a comprehensive “business case” for their highly optimistic profit forecasts to follow their modernisation plan. The crown company is yet to produce this. Instead, they adjusted the CA$1,3 billion predicted growth in profit to CA$889 million.