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Archive: Irregularities threaten bingo licence

Originally published Nov. 25, 2005
The Fort Erie Native Centre may lose its bingo licence unless another board election is held by Dec. 17.

The town’s gaming manager, Russ Wilson, reported to town council Nov. 21 that the board was not duly elected according to the Friendship Centre’s own bylaws.

He said the annual general meeting held Sept. 17 was not proper because the start time was changed without providing due notice to the membership.

He said the organization’s bylaw states the AGM must be held the third Saturday of September at 1 p.m.

“Our information tells us the meeting started between 12:15 and 12:30,” Wilson said. “There’s no evidence” the general membership was notified of the change in time.

Wilson’s investigation was spurred by the allegations of Victor Hill, who was fired as executive director of the centre after the new board was installed.

His report followed the release of the bingo compliance audit that showed the centre had improperly spent more than one-third of its $1.2 million in bingo-generated funds over three years ending in 1998.

The audit was done over the summer by accounting firm Durward Jones Barkwell and Company LLP and presented to council Nov. 7.

The vast bulk of money — $396,000 — was used for eligible but unapproved expenses to fund over-spending on approved items and items that were not budgeted.

Another $24,000 was used to fund items that were not eligible for bingo funding.

The infractions occurred when bingo enforcement was under the purview of a lottery licensing officer of the town.

The Community Gaming and Development Corporation — an “arms-length” board with council-appointed directors — of which Wilson is general manager was formed in 2000 and now oversees bingo.

A specific item the auditor traced was a 1996 payment for $3,000 to settle a complaint with the Ontario Human Rights Commission in 1994.

The organization said the payment out of bingo was justified because it was for legal fees incurred by the complainant.

“We are unable to satisfy ourselves that this payment was specifically issued on account of legal fees,” the audit report states.

Consistently over the three years of the audit period, payments were made to an employee of the Centre for her role as bingo manager in contravention of licence terms.

More than $95,000 over the audit period were paid in unauthorized wages and Christmas bonuses.

The auditor notes $75,000 in expenditures for computers, phone system and an outdoor sign, exceeding the $5,190 budgeted for equipment replacement.

The expenditures, however, were for capital purchases related to the establishment of the Adult Training Centre which was a classroom for computer training.

Other over-budget items such as maintenance and supplies, excess day care establishment costs and staff training were funded from bingo money.

The auditor also found $46,000 was paid in municipal taxes out of lottery proceeds.

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