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Senators Question Guns at Lottery Office, Employee Loans

During Friday’s hearing of the Senate Committee on Appropriations and Budget, Sen. Terrence “Positive” Nelson queried Virgin Islands Lottery officials regarding weapons that supposedly were ordered by a lottery employee and shipped to the lottery office on St. Croix.

Acting Director Conrad Francois stated he was unaware of any gun shipment to the St. Croix office. Ray Chesterfield, Director of Investigations, told senate members that no report was written about the incident. Chesterfield stated after the hearing that he “would be looking into the matter.”

Sen. Carlton “Ital” Dowe asked Lottery officials what they knew about $300,000 in unauthorized loans to employees that were still outstanding. Michael Toussaint, acting chief financial officer, responded, “The $300,000 in loans came out in the 2007 audit report. Auditors have not provided a listing of the employees and the breakdown of the loan amounts. It has been requested.”

Referring to these incidents, in addition to an investigation underway by Chesterfield regarding missing lottery tickets, Dowe said, “These are things that should not happen.”

Francois did tell senators that improvements were being made to the office, including implementation of a new financial management system and a reduction of authorized signatories from nine to four on St. Thomas and one on St. Croix. Auditors recommended having only two or three signatories.

Lottery officials are also looking to cut costs by contracting with the Department of Property and Procurement to print tickets for the traditional lottery. Tickets are currently printed in Puerto Rico at a cost of more than $400,000. They expect to start printing the tickets on-island by Oct.1, 2009.

Another cost-saving measure involves moving offices in order to house the St. Thomas operations under one roof. Francois stated that they were looking at two locations, the West Indian Company and the Franklin building on lower Main St. “The Franklin building,” said Francois, “has the clear advantage in terms of space, cost, location, and the added benefit of contributing to the revitalization of the lower end of Main Street.”

The lottery’s projected budget for fiscal year 2010 starts out with projected revenues of $20,541,067 and operating expenses of $15,632,381, leaving them with an operating income of $4,908,686. Of this money, $2,808,860 will be transferred to the Special Education Initiative Fund, $1,684,116 to the Pharmaceutical Assistance Program, and two other non-operating revenue expenses deducted totaling $445,0856. This leaves the lottery with a net income of $862,766. The sum of $172,553 will be paid to the General Fund from that amount, leaving the lottery with a projected net income of $690,213 for FY 2010.

Francois told the committee that the lottery has historically broken even or lost money. Sen. Craig W. Barshinger asked, “Why do we continue to do something that loses money?” to which Francois replied, “It gives people a chance to experience a windfall and contributes to community groups in need.”

Present at the hearing were Barshinger, Dowe, and Sens. Wayne James, Nelson, and Samuel Sanes.

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