LITTLE ROCK, Ark. — The director of the Arkansas Lottery, who oversaw its successful launch but has had a series of high-profile flubs, will receive his first employee evaluation Wednesday when the Arkansas Lottery Commission.
Commission chairman Dianne Lamberth said the panel will go into executive session to discuss Ernie Passailaigue's performance, which has been highlighted by the scholarships given to students last fall but darkened by a critical audit and other problems.
The commission met in closed session twice last year to discuss whether Passailaigue should be fired, but each time only two members supported firing him. Lamberth wouldn't speculate on whether another run at Passailaigue's job might be made Wednesday.
"We have a group of independent thinkers," Lamberth said. "I never know what to expect."
Joe White, one of the commission members advocating for Passailaigue's dismissal, said he's made his thoughts known already.
"You know how I voted," he said. "We need to do the best that we can to effectively run a lottery with integrity, dignity and to provide scholarships to our students."
Passailaigue didn't return a message left seeking comment.
The Wednesday meeting will be the first since the legislative Lottery Oversight Committee announced that scholarship awards could drop by 10 percent for the next class of recipients.
University students who received lottery scholarships in the fall got $5,000, while community college students were awarded $2,500. Those amounts could fall to $4,500 and $2,250, based on projected lottery revenues. Rep. Barry Hyde, D-North Little Rock, the chairman of the oversight committee, said the lottery could provide full scholarships initially, but there would not be enough to fully fund them for four years.
The scholarship amounts for the first year were based on the expectation that 65 percent of applicants would be in four-year-schools, with the remaining 35 percent in community colleges. Instead, 80 percent were university students and 20 percent attended community college. Barring a windfall, revenues projected for the next class can't sustain the outlay without either cutting scholarship amounts or the number awarded, Hyde said.
Passailaigue has said he expects the lottery to generate $105 million this fiscal year and $110 million in the 2012 fiscal year.
The Legislature has to approve the scholarship amounts in the session that begins Monday.
A year ago, the Legislature approved a provision that rolled money from unclaimed prizes into scholarships, while Passailaigue expected that money to be available for marketing. The issue drew attention when the Lottery Commission had to approve a second fiscal 2011 budget because the legislative vote escaped Passailaigue's notice, one of a number of points on which he's been criticized.
Gov. Mike Beebe said in November that the lottery should get a new director if an array of problems identified in a state audit weren't corrected.
The audit criticized Passailaigue's decision to grant himself and other salaried lottery workers 200 hours of compensatory time for the long hours they put in during the lottery's launch. The policy was revised to grant no more than 80 hours of comp time, though employees who took more were forgiven.
Legislative auditors said the lottery was unable to provide year-end financial statements in accordance with generally accepted accounting principles and that the agency did not complete required employee background checks before hiring. The agency also could not provide documentation for excessive lodging costs. The audit faulted Passailaigue's own travel reimbursement documentation.
Passailaigue, who is paid $324,000 per year, has defended his performance, noting the lottery's quick startup in 2009 and the 30,000 scholarships awarded last fall.
The Lottery Oversight Committee delayed action Friday on a proposal for the lottery to join a multi-state game being developed called Dollars for Decades. The contract for that game requires that money from unclaimed prizes be rolled back into the game, not go to the states to spend as they wish.
Some committee members said they wanted more information about the proposals, and they didn't want to act in haste when the committee's make up would change once the session started.
The committee meets next Feb. 16.
Lamberth said Friday that she expects legislators to come through with the changes the lottery needs.
"I respect their oversight, their opinion and I'm sure they had good reason to postpone (action)," Lamberth said. But, she added, the Decades of Dollars game is projected to bring in $3 million a year in profit for scholarships, so she's eager to see it approved.