HALIFAX – Missing financial records and meddling by former board members at the Nova Scotia Provincial Exhibition (NSPE) highlight some of the concerns revealed in an operational review prepared for the provincial government.
Although the review, prepared by KPMG at the request of Agriculture Minister Keith Colwell, did not uncover any criminal wrongdoing, operations were negatively impacted by a board of directors that regularly interfered with how the facility was run, the report said.
“In recent years the Commission has experienced turnover at the general manager position,” the report states. “This is partly due to the governance structure in that the board of directors have been actively involved in the commission’s operations which has undermined the general manager’s authority.”
Poor financial planning also resulted in the exhibition commission being unable to pay its bills, which resulted in “significant payment delays” and ultimately led to loss of credit that forced the NSPE to pay cash for delivery of all goods and services.
The commission also is at risk of having its pari-mutuel contracts with other race tracks cancelled because of a failure to remit payouts for amounts collected for betting on the other parties’ races (net of payouts), the report noted, which “has resulted in strained relationships with key racing partners.”
As well, financial results for the commission “have not been in line with expectations”, in part because of declining attendance and a lack of sufficient cash flow to fund the ongoing capital maintenance of facilities and in certain circumstances cover the operating costs, the report disclosed.
“A review of financial and business affairs of the Commission conducted by Grant Thornton in August 2013, declared it insolvent, where current and long term liabilities ($638,000 and $373,000 respectively) and cash flow constraints prevented it to make payment on its obligations,” the report said.
The KPMG review also determined that the NSPE’s financial records for the years 2009 through to 2011, were completely missing, a factor that Colwell told the Truro Daily News was especially concerning for him.
“It sure did (cause him concern). But if it’s not available it’s not there,” he said, of the missing information, which was attributed to a changeover in staff at the NSPE administration office as well as the introduction of new computer software.
“And whatever happened to it we don’t know,” he said. “That highlights one of the weaknesses in the whole system.”
Colwell said based on the report’s findings and given ”the deteriorated condition of the buildings” on the NSPE grounds, he said the facility had been mismanaged for a “long time.”
And he said that was also pretty much the assessment of the auditors when he addressed their findings in the report.
“The list goes on and on and on and on,” he said, of proper business controls that were not in place under the previous management.
“It’s just a whole lot of not really solid management practices,” Colwell said, of the overall findings.
“They said the place really needed to be run properly and the bottom line is, it wasn’t.”
Facility rentals also have to be brought in line with reasonable market rates to ensure the facility can operate without government handouts, the minister said. And controls also have be put in place for things such as gate admissions for the annual Exhibition.
For example, visitors to the Middle Musquodoboit Exhibition are given a bracelet with a serial number on it when they pay their admission fee,” Colwell said, compared to the provincial exhibition in Bible Hill where there simply is “no accountability for the cash. That’s just one example.”
Despite the past struggles, however, Colwell said that with proper controls put in place, the NSPE can have a promising future.
“We’re very optimistic about the facility at a time when a lot of facilities are struggling and I think this one has a great deal of potential,” he said.