The Minister of Finance and President of Treasury Board, the Honourable Tom Marshall, commented today on the findings of the KPMG forensic audit into the Atlantic Lottery Corporation (ALC).

The independent board of directors of ALC, which includes two senior officials from the Government of Newfoundland and Labrador, hired the firm KPMG to conduct a forensic audit of retailer wins as well as past customer complaints and how those complaints were handled by ALC.

"KPMG has identified major problems with the way investigations were conducted, customer complaints were addressed and the manner in which records have been kept," said Minister Marshall. "The President and CEO of ALC has taken full responsibility for problems identified within the KPMG report and has committed to put in place the solutions. I am pleased the recommendations will be implemented and the report will now serve as a road map for ALC to better protect its customers."

Minister Marshall said a number of measures have been taken by Newfoundland and Labrador and the other Atlantic shareholders to ensure the integrity and security of the Atlantic lottery system. "Based on issues surrounding retailer lottery wins in Ontario, ALC conducted an internal review that found a disproportionate percentage of retailer wins in Atlantic Canada. It was based on this information that ALC board of directors hired KPMG to conduct its forensic audit."

Further to the internal ALC review and the KPMG forensic audit, Newfoundland and Labrador has also joined the other Atlantic Provinces for a comprehensive review of the entire lottery system. The RFP for the review was released May 9. "The new four-province, broad-scope review will examine the entire lottery system in Atlantic Canada as a whole, something that no other review has done. While the KPMG report is a historical review of complaints and retailer wins, this review will be broader, more comprehensive and forward looking," stated Minister Marshall.

This broad-scope review will look at all lottery games operated by ALC, including every key point along the creation, distribution and sales cycle. It will also extend to review controls in place at product suppliers, independent testing agencies, distribution agencies and retailers.

Minister Marshall said he met last month with the Minister of Justice, the Honourable Tom Osborne, and Deputy Minister of Justice Chris Curran, RNC Chief Joe Browne, and RCMP Chief Superintendent Bill Smith to ensure they were aware of circumstances surrounding the potential issue of retailer wins at ALC.

"As a result of the KPMG review, there are 53 files that include customer complaints and retailer wins in Newfoundland and Labrador that will be forwarded to the police via the Department of Justice to determine whether further review is warranted," said Minister Marshall.

"As a shareholder in the ALC, we take upholding the integrity of the lottery system very seriously. We will keep a watchful eye to ensure the recommendations of KPMG are being followed and look forward to the final report of the four-province comprehensive review," said Minister Marshall. "We will play whatever role is required to ensure that problems are identified and addressed and our consumers are protected and public confidence in ALC products is maintained."

Information on the KPMG Report can be found at www.alc.ca.

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