Numbers don’t add up

Like most people, I’m amazed at the expense claims filed by executivesof the Ontario Lottery and Gaming Corp. After all, what reasonableadult with a sense of propriety would assume it’s justifiable toexpense car detailing, dry cleaning, golf memberships, or annual creditcard fees?

 

Like most people, I’m amazed at the expense claims filed by executives of the Ontario Lottery and Gaming Corp. After all, what reasonable adult with a sense of propriety would assume it’s justifiable to expense car detailing, dry cleaning, golf memberships, or annual credit card fees?

Not to mention the coffee, doughnuts and that reusable Sobeys grocery bag. People who do stuff like that used to be called chisellers, and even in this age of entitlement, it’s deplorable.

I’m also astonished by Ontario Premier Dalton McGuinty’s solution — other than firing OLG’s CEO and board — which is to make the province’s integrity commissioner responsible for overseeing expenses at OLG and 22 other provincial agencies and boards.

 

How much sense does it make to have the commissioner and her staff of nine vet all those expense reports when you could take existing provincial expense policies, shore them up where necessary, and tell management of all those agencies and boards to apply them religiously on pain of losing their jobs? To make sure, there will be spot checks, like urine tests for athletes.

But forget the food, drink and other indulgences. What truly astounds me is how OLG’s free-spending management has been getting away with such sketchy financial reporting. Based on the available financial evidence — and if you visit the OLG website, you’ll see it’s scant — OLG might not be an operation you would want to invest in.

 

The one annual report posted on the site is for the pre-recession year ended March 31, 2007, and it shows OLG with net income of $1.67 billion on revenues of $6 billion. That’s obviously a good margin, yet it was nearly six per cent less than OLG earned the previous year. Unlike most corporate annual reports, OLG provides no five- or 10-year comparisons, so we don’t know whether revenues and earnings are growing or shrinking.

The site does, however, have quarterly reports showing five years of unaudited revenue figures for resort casinos and OLG casinos and slots ending with the 2008 fiscal year. Revenues in these categories, which normally provide more than 55 per cent of net income, are running three per cent lower than they were five years ago.

 

As for the lottery and bingo revenues that generate the remaining profits, OLG tells us nothing, although a recent Statistics Canada study noted these activities levelled off in 2005 and actually dropped in 2008.

I’ll give you odds they haven’t improved since then.

 
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