LITTLE ROCK — The chairwoman of the Arkansas Lottery Commission on Monday promised lawmakers she’d take steps to correct problems found by a legislative audit, while another member of the commission left open the possibility he’d ask for the lottery’s director to step down.
Lottery Commission Chairwoman Dianne Lamberth told the lottery’s legislative oversight committee that she’ll present the commission with a plan for addressing the problems outlined in an audit released earlier this month. Auditors said they were concerned the lottery couldn’t provide year-end financial statements that meet generally accepted accounting standards after its first fiscal year.
The audit also said the lottery entered contracts with instant ticket providers without review by the Lottery Commission Legislative Oversight Committee.
“We understand our shortcomings, and we take each of these very seriously,” Lamberth told the oversight committee.
The audit, which also identified 11 other less serious infractions that auditors said must be addressed, prompted lawmakers earlier this month to criticize Lottery Director Ernie Passailaigue.
Voters approved the lottery in 2008 to raise money for college scholarships, and the state began selling tickets in September 2009. Lamberth said the games have raised more than $113 million for scholarships.
One lawmaker vented frustration at lottery officials pointing to the quick startup of the games in addressing the problems.
“Would you say we’ve moved beyond the statement that we’re in a learning mode in the lottery and that we’ve passed that phrase?” Rep. Rick Green, R-Van Buren, asked Lamberth.
“I think we’ve moved way past the learning mode,” she replied. “We should now be well aware of how to take care of these problems.”
Lamberth told reporters after the meeting that she did not believe Passailaigue’s job was on the line. Passailaigue attended Monday’s meeting but did not speak to the committee.
Joe White, a member of the commission, said after the meeting that he was embarrassed by the audit’s findings and questioned Passailaigue’s leadership of the lottery. White and Commissioner Ben Pickard in September voted to fire Passailaigue, but the motion was voted down by the rest of the 9-member commission.
“I don’t think there’s a high level of confidence in Mr. Passailaigue’s administrative ability,” White said after the meeting.
When asked whether he would seek Passailaigue’s resignation, White responded: “I’m not at that point right now, but I wouldn’t rule it out.”
Pickard, who also attended the meeting, wouldn’t say whether he’d ask Passailaigue to resign but called the report “appalling.”
Passailaigue said it would be up to the commission to judge whether the audit reflected poorly on him as the games’ director.
The oversight committee recommended several changes to the lottery, including a requirement that the lottery’s internal auditor report to the panel every month. It also recommended changing the lottery-funded scholarship to eliminate stricter eligibility requirements for students who graduate from schools the state has identified as grade inflaters.
At those schools, 20 percent or more of students earned an A or B in math courses but scored below proficiency levels on corresponding state exams. The stricter eligibility requirements are set to take effect next year.
A spokesman for Gov. Mike Beebe said the governor is open to new ideas, but believes that grade inflation should be addressed in the lottery scholarship eligibility.
The recommendations will be included in legislation proposed by the committee for the legislative session, which begins Jan. 10.