National Lotteries in financial malfeasance

Investigations into the operations of the Department of National Lotteries (DNL) has revealed serious gaps in its financial reporting system, which allowed funds to be diverted into private pockets, or kept in undisclosed accounts.

“Over 90% of the department’s staff who are said to be on secondment from the Audit or the Accountant General’s Department are being paid by DNL.”

More than ?3 billion and ?4.6 billion have been spent on personal emoluments in 2000 and 2001 respectively and it is estimated that about ?7 billion more would be spent this year.

Another area is the extravagant culture at DNL, which resulted in an expenditure of ?1.6 billion for 2001on traveling and transport. Another ?3.2 billion was also spent as general expenditure.

Over ?625 million was spent under publicity and public relations while ?25 million went into official entertainment.

In 2002, DNL’s income is projected to be over ?175 billion out of which ?14 billion is to go into the consolidated account, while ?70 billion will be paid in lotto prizes. The rest (over 80 billion) would go into operational and other costs.

Reacting to the allegation of financial malfeasance, deputy Minister for Finance, Grace Coleman (MP) who is also responsible for the DNL said government is instituting adequate measures to normalize the situation within the DNL and would accordingly weed out financial racketeering.

The deputy Minister said she became suspicious about the activities of the DNL after it performed dismally in 2001, necessitating the inquiry, which revealed serious gaps in the department’s financial transactions.

Soon after the budget was read, she indicated that top officials from the DNL were invited to give briefing on the state of financial affairs, as the department had only declared an income of ?2.6 billion which was thought to be woefully inadequate.

After the briefing, it was discovered that DNL had ?15 billion that was not disclosed even though the ministry of finance had earlier requested for full financial report on DNL.

Out of the ?15 billion,, ?12 billion has so far been paid to into a special account three installments while ?13 billion was retained by DNL as imprest. What worries MOF is where the alleged ?15 billion was being kept and in whose custody the amount was entrusted.

Again, the figure does not reflect in the financial statement submitted to the ministry recently.

Meanwhile, some private lotto operators the B&FT has learnt owe more than ?12 billion in taxes to the government. Some financial analysts have say the situation is unacceptable and have accordingly, called for a probe into the affairs of the lotto industry.