Hockey Canada used player registration fees to pay $2.9 million in settlements this fiscal year, including one related to a high-profile sexual assault allegation against members of the 2018 World Juniors team , according to recently released financial records.
The new financial statements confirm that the controversial National Equity Fund was used to pay all settlements this fiscal year.
The only money going into the fund comes from player registration fees, records show.
“Over the past year, the Organization has come under intense public and media scrutiny regarding its management and governance of dispute settlements and the use of player registration fees. ”, wrote BDO Canada, the company in charge of the audit.
“…The organization is exposed to lawsuits from various sources. Due to this risk, the Organization has obtained insurance coverage which is additional by holding funds in reserve to cover uninsured claims.”
Hockey Canada has been embroiled in controversy since May, when it reached a settlement with a young woman who filed a $3.5 million lawsuit alleging a group of eight Canadian Hockey League players kicked her. sexually assaulted in 2018 in a hotel room in London, Ontario.
Hockey parents have been outraged to learn that their registration fees were going into the National Equity Fund without their knowledge – and that the reserve fund was used to pay millions of dollars in sexual abuse claims over the years. years.
Hockey Canada told MPs it used the National Equity Fund to settle the London case, the board ‘approved the maximum settlement amount and the settlement offer was made and accepted. “.
New audited financial statements suggest the settlement in that case was less than $3.5 million.
CBC News asked Hockey Canada how many settlements it paid out during the fiscal year. Hockey Canada said nothing. A spokesperson said $2.9 million is an “aggregate figure for legal settlements reached during the fiscal year.”
CEO Scott Smith fired ‘without cause’
Financial records also reveal that Hockey Canada CEO Scott Smith was “terminated without cause.”
Smith and the entire board announced their resignation after a report commissioned by the organization revealed serious accountability and transparency issues.
Financials show that, for the first time, Hockey Canada had to include a previously undisclosed fund – the Participant Legacy Trust Fund – in its audited financial report, which showed its balance was $7.5 million dollars in June.
Hockey Canada’s auditors said on the front page of the financial statements that the fund “has not been disclosed in the previous year.”
The Legacy Trust Fund was only discovered in the fall when the Globe and Mail learned of its existence through court documents. The newspaper revealed that the fund was established in 1999 and that the hockey organization used player registration fees to build up another large financial reserve that could be used to pay for allegations of sexual abuse and other complaints.
During a Commons committee appearance in October, former Hockey Canada board chair Andrea Skinner told MPs that the Legacy Trust Fund had been “fundamentally misrepresented in the media” and n was not used to settle claims. Skinner said the fund “is not an asset of Hockey Canada” and therefore “does not appear in Hockey Canada’s financial statements.”
But once the organization informed the auditor that the fund existed this year, the auditor determined that it should be on the books because Hockey Canada controls it.
“The Legacy Trust trustees are appointed and removed by the Organization,” BDO Canada wrote.
The fund is intended to respond to pre-September 1995 claims associated with some of Hockey Canada’s member branches and the Canadian Hockey League, in the event the National Equity Fund does not have enough money, according to the statements. financial.
“It sets the record straight”
Kate Bahen, Managing Director of Charity Intelligence Canada, reviewed the latest audited financial statements and prior statements dating back to 2008.
Bahen said Hockey Canada’s audited financial statements over those years never disclosed the Legacy Trust Fund.
“It shows that the previous management did not provide information,” Bahen said.
“It sets the record straight. Previous Hockey Canada management said it was not on their books and the auditors said yes, it is on your books under control.”
Hockey Canada’s decision to open its books comes after a review the organization commissioned from retired Supreme Court Justice Thomas Cromwell recommended the organization do so.
Prior to this, Hockey Canada did not publish its audited financial statements online. The only way to get them was to file requests under the Access to Information Act.
Bahen continues to call on the federal government to require nonprofits like Hockey Canada, which receive millions of dollars in federal funding and tax breaks, to post their audited financial statements online.
Source : WORLD NEWS