Commissioners halt decision on lottery data | Arkansas Blog

Thursday, June 2, 2011

Commissioners halt decision on lottery data

Posted By on Thu, Jun 2, 2011 at 12:06 PM

Ernie Passailaigue, Arkansas Lottery Commission
  • FILE
  • MIA: Passailaigue did not attend meeting
Arkansas lottery staffers seemed surprised this morning that two new lottery commissioners, Bruce Engstrom and Steve Faris, sat in on a meeting between the lottery’s retail division and representatives from the state Department of Information Systems (DIS). The lottery held the meeting to request that DIS turn over historical data on retailer contracts to be housed on the lottery’s own system, run by Intralot, the Greece-based company that holds the lottery’s online gaming contact. Engstrom and Faris raised concerns that removing that data from a state-run system would result in a lack of accountability. Faris suggested the lottery should not take action on the matter until it could be discussed before the full commission, which meets on Monday. The meeting then ended abruptly.

Comm. Engstrom said after the meeting that this was an important decision and lottery commissioners should have been notified. The commissioners also expressed their unhappiness that lottery director Ernie Passailaigue was not present.

Much more on the jump including comments from lottery Vice President of Administration Ernestine Middleton, Engstrom and Faris.

Engstrom and Faris asked many questions during the meeting, attempting to figure out why the move was necessary. Lottery Vice President of Administration Ernestine Middleton said the lottery wanted to house the data to eliminate redundancies and make it more readily available for auditors.

“[Intralot has] all of our data,” Middleton said. “They’ve been running our application process from the very beginning. When we asked DIS to do this, it was for the renewal process. Now we’ve got the renewal process where it needs to be. The only thing we need is for DIS to give us the historical data so when the auditors come in we can show them what happened with a particular retailer.”

Rick Lee, Licensing Manager also said housing the data on the lottery’s “back office system” would make it easier to provide information to auditors. However, Michael Hyde, the lottery’s auditor, said after the meeting that he had not requested such a move and was not even aware of the meeting this morning until shortly before it occurred.

Faris said the issue was not about redundancy, but transparency.

“This is not a question of money but accountability,” Faris told the lottery staff. “I think that transparency and accountability is something the legislature and the people want and I just think it’s better to have an independent state agency housing these facts and figures and things we might need as opposed to a person that we pay as a contractor. An independent, unbiased third party who gets a fee to house this information could prove to be a wise and prudent decision.”

It costs about $1,000 per month for DIS to host the data. Lottery staff told the commissioners they stopped sending retailer data to DIS in April of this year. When asked by Engstrom if commissioners had been notified of that decision, a lottery staffer replied: “I don’t think they were aware that the retailer application for DIS was even being used. It was always on the back office system.”

Local media outlets were notified the commissioners would be on hand for this morning’s meeting at 11:30 last night, well short of the required legal notice for such meetings. Lottery spokeswoman Julie Baldridge said she notified the press as soon as she became aware that two commissioners would be present at headquarters this morning.

Baldridge and Engstrom said it was their understanding that even if the data were transferred to the Intralot-run system, the information would still be available through Freedom of Information Requests.

“It could just be a little harder to get,” Faris said. “When a state agency builds a program for an entity like this, from the ground up, it’s important to look at that very closely before we say we just don’t need it anymore. It’s a whole lot easier to walk across the street than it is to go to Greece. Even though they have offices in this country, Intralot doesn’t have the data in the state of Arkansas. Even if they did, I would be for having the checks and balances of DIS continuing to house these documents. I think it’s the right thing to do for transparency and accountability.”

When asked if other lottery commissioners were notified about the meeting, Engstrom said he was not sure. The Times tried to contact Commission Chair Diane Lamberth on her cell phone, but had not heard back by the time this post was published.

“I was just trying to figure out the motivations for what they’re doing,” Engstrom said. “I was trying to explore to what extent cost was a motivating factor in what they’re doing. It sounded like it wasn’t. I’m not sure what it is. That’s what we need answers to.”

“This is a major decision and as a commissioner, I don’t know enough about this to say it’s okay,” Faris said. “I do know I just came out of the legislative arena and a lot of things that were happening over here were questioned in various ways by legislative audit and the oversight committee. It never hurts to put the brakes on something like this.”

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