2015 CNIB Media statement re: Deloitte review

3/27/2015

At CNIB, we consider business and legal conversations to be private and confidential. However, some individuals who operated independent lottery kiosks on behalf of CNIB have recently taken to the media to share their impression of the legal proceedings. Out of respect for those we serve, as well as our volunteers, donors and supporters, we are now compelled to come forward and reassure the public about our integrity and principles as an organization.

CNIB is currently engaged in legal action with three former independent lottery kiosk operators over significant cash and/or product shortfalls at their kiosks. Our goal is to resolve these cases in a timely manner and avoid a lengthy legal process, so we can continue to focus our efforts on our important work with Canadians who are blind or partially sighted.

We recognize that it is not unusual in retail businesses for there to be small discrepancies between sales information and bank deposits. A lottery kiosk is a business that is run entirely on cash and debit transactions. Small discrepancies could occur. But the losses in these cases are not small. In fact, they are significant.

CNIB commissioned Deloitte Canada, an independent third party, to perform a forensic review of the three cases in question using information sourced from external partners, namely the Atlantic Lottery Corporation and Scotiabank. The Atlantic Lottery Corporation records the sales at each kiosk, and Scotiabank records the deposits from each kiosk. Deloitte’s review validates our calculations demonstrating significant losses at each of these lottery kiosks. By contract, the individuals who operate our lottery kiosks are responsible for these losses.

More detailed information may be disclosed as part of the ongoing litigation process, but sharing any further details with the public at this point is not appropriate because the report contains confidential information.

We feel it important to state that the majority of lottery kiosks operated on our behalf don’t have financial issues. We have many long-time operators in Atlantic Canada who have worked with us for years, without issue. We also have kiosk operators who have experienced discrepancy issues, resolved the missing cash and/or product shortfall and continue to operate kiosks on our behalf, in good standing.

CNIB views legal action against independent kiosk operators as a last resort. We take any situation involving discrepancies of funds seriously. When we raise money in the name of those we serve, utmost diligence is required.

We deeply value the trust and confidence Atlantic Canadians place in our organization, and thank them for their continuing support. We regret that we did not identify these losses sooner and have taken action to strengthen our controls and review practices, including Deloitte’s recent independent forensic review of the cases concerned.

As we move forward, we are committed to continuous improvement in this and all aspects of our business. For almost 100 years we’ve worked to serve and support people who are blind or partially sighted and we look forward to continuing to do so for another 100 years.

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