Rehabs Fiscal Follies
It seems Rehab lottery where one of their main products is lottery scratch cards is still not in the clear. The charity firm, which has received a massive amount of state funding, has recorded a profit of only just €468 after selling over two million scratch cards.
This has subsequently lead to an investigation into their financial spending.
According to records kept by the company, the group has received over €32m in state funding since 2007 as part of a government program to compensate the loss of business charities receive following the creation of the National Lottery.
These recent revelations are only putting further fuel to the fire surrounding this company, which has gone from one controversy to another.
The mystery surrounding the company’s finances is set to be discussed at a meeting of the Dail’s Public Accounts Committee (PAC).
This meeting is will question Rehabs executives about the lack of information provided by the company in regards to the salaries and pension amounts of their management team.
Former Chief Executive of Rehab, Frank Flannery has also been recalled amid claims he was not formally invited to the last hearing about Rehabs situation.
Flannery resigned from his position of Fine Gael election strategist earlier this week following the controversy surrounding his lack of presence at a PAC meeting that was investigating the source of Mr Flannery’s current pension plan.
Despite recent overall sales totalling €3.4m, Rehab stated their scratch cards have only managed to barely break even.
However, Justice Minister Alan Shatter announced an audit into Rehab had found their scratch cards had actually made a surplus of €10,000 on sales of €4m in 2010.
Mr Shatter criticised the government’s compensation scheme of charity lotteries, he felt that it encouraged inefficient fundraising practices and had excessive administration costs.
A Rehab spokesman has defended the company’s, saying scratch cards had ‘unfair restrictions’ and they had been: “Experiencing great difficulties.”
He continued: “Scratch cards have been particularly hard hit with the annual sales having fallen from over €10m to just over €3m. There’s the requirement to pay back 67p of sales income in prizes, and a further 12.5p in retail commission.”
According to the spokesman, the company had been struggling to maintain the profit margins on their scratch cards. He also said they were lacking the infrastructure required to operate it as a viable business with any sort of financial return.
The investigation into Rehabs questionable financial records is set to continue.