Hockey Canada paid out $2.9 million in settlements this fiscal year, using player registration fees | 24CA News

Hockey Canada used gamers’ registration charges to pay for $2.9 million in settlements this fiscal 12 months — together with one associated to a high-profile sexual assault allegation towards members of the 2018 World Juniors group — in accordance with newly launched monetary information.

The new monetary statements verify that the controversial National Equity Fund was used to pay out these settlements this fiscal 12 months.

The solely cash going into the fund comes from gamers’ registration charges, the information present.

“During the past year, the Organization has come under extreme public and media scrutiny with regards to its management and governance of litigation settlements and the use of player registration fees,” wrote BDO Canada, the corporate conducting the audit.

“… The organization is susceptible to lawsuits from various sources. As a result of this risk, the Organization has obtained insurance coverage which is supplemental 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 younger lady who filed a $3.5 million lawsuit alleging a gaggle of eight Canadian Hockey League gamers sexually assaulted her in 2018 in a lodge room in London, Ontario.

Hockey dad and mom had been outraged to study that their registration charges had been going right into a reserve known as the National Equity Fund with out their data — and that the fund was used to pay out tens of millions of {dollars} in sexual abuse claims over time.

Hockey Canada instructed MPs that it used the National Equity Fund to settle the London case, the board of administrators “approved the maximum amount of the settlement, and the settlement offer was made and accepted.”

The new audited monetary statements counsel the settlement in that case was lower than $3.5 million.

24CA News requested Hockey Canada what number of settlements it paid out over the fiscal 12 months. Hockey Canada did not say. A spokesperson mentioned that $2.9 million is an “aggregate figure for the legal settlements reached during the fiscal year.”

CEO Scott Smith terminated ‘with out trigger’

The monetary information additionally reveal Hockey Canada’s CEO Scott Smith was “terminated without cause.”

Smith and the whole board of administrators introduced they had been stepping down after a report commissioned by the group discovered severe issues with accountability and transparency.

The monetary statements present that, for the primary time, Hockey Canada has needed to embrace a beforehand undisclosed fund — the Participants Legacy Trust Fund — in its audited monetary report, which confirmed its stability was $7.5 million as of June.

Hockey Canada’s auditors acknowledged on the entrance web page of the monetary assertion that the fund “was not disclosed in the prior year.”

The Legacy Trust Fund solely got here to gentle within the fall when the Globe and Mail discovered of its existence by means of court docket paperwork. The newspaper revealed the hockey group was utilizing participant registration charges to construct one other massive monetary reserve which might be used to pay out for sexual abuse allegations and different claims.

During a Commons committee look in October, Hockey Canada’s now former board chair Andrea Skinner instructed MPs that the Legacy Trust Fund had been “fundamentally mis-described in the media” and was not used to settle claims. Skinner mentioned the fund “is not a Hockey Canada asset” and that is why “it doesn’t show up on Hockey Canada’s financials.”

But as soon as the group made the auditor conscious of the fund this 12 months, the auditor decided it must be on the books as a result of Hockey Canada controls it.

“The Trustees of the Legacy Trust are appointed and terminated by the Organization,” wrote BDO Canada.

The fund is supposed to answer claims dated previous to September 1995 related to a few of Hockey Canada’s member branches and the Canadian Hockey League, within the occasion the National Equity Fund would not come up with the money for, the monetary statements mentioned.

‘It units the file straight’

Kate Bahen, managing director of Charity Intelligence Canada, reviewed the audited monetary statements and mentioned previous statements present Hockey Canada’s auditors had been by no means made conscious of the Legacy Trust Fund.

“It goes to show the previous management wasn’t forthcoming with information,” mentioned Bahen.

“It sets the record straight. Hockey Canada’s previous management stated it was not part of its books and the auditors said yes, it is part of your books by virtue of control.”

Hockey Canada’s transfer to open up its books comes after a assessment the group commissioned from retired Supreme Court justice Thomas Cromwell beneficial the group accomplish that.

Before that, Hockey Canada didn’t submit its audited monetary statements on-line. The solely solution to get hold of them was by submitting requests underneath the Access to Information Act.

Bahen continues to name on the federal authorities to require not-for-profits like Hockey Canada that obtain tens of millions in federal funding and tax breaks to submit their audited monetary statements on-line.