22-10-22, 05:18
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Re: Hockey Canada Moved Cash From Fund Used For Sexual Assault Claims
Hockey Canada Moved Cash From Fund Used For Sexual Assault Claims to Avoid Encouraging More Claims:
A financial analysis by Charity Intelligence Canada found Hockey Canada's board of directors approved the transfer of $17 million out a controversial reserve fund between 2016 and 2021.
CBC 22 OCT 2022
A controversial reserve fund that Hockey Canada publicly vowed it would stop using to settle sexual assault allegations is significantly depleted after the organization transferred millions of dollars in past years to another account, a new interim report reveals.
Former Supreme Court justice Thomas Cromwell's interim report on Hockey Canada's governance, released last week, contains damning details about the organization's management of its National Equity Fund — a fund Cromwell said is projected be in deficit by 2023.
Hockey Canada commissioned Cromwell's review in response to hockey parents' outrage after learning that the National Equity Fund — made up in part of players' registration fees — was being used to pay out millions of dollars for sexual assault allegations without their knowledge.
Cromwell learned of the existence of a third fund to which Hockey Canada's board of directors approved the transfer of $10.25 million in reserve funds from the National Equity Fund (NEF) in 2016. Another financial analysis has found that at least another $7 million has been transferred from the NEF to the third fund since then.
The money was moved after Hockey Canada's auditors recommended a change to the organization's disclosure on its audited financial statements that "increased the reported balance of the National Equity Fund by several million dollars," Cromwell found.
Cromwell concluded that the organization's board of directors feared that an account with more money would attract more claims.
"Hockey Canada became concerned that this change on the financial statements inflated the NEF balance artificially, which might signal a large pool of funds set aside for potential claimants and thus might increase the likelihood of additional claims," Cromwell wrote in his report.
In November 2016, Hockey Canada's board of directors transferred the money from the NEF to another fund called the Insurance Rate Stabilization (IRS) Fund, which was created years earlier to "act as a buffer against future increases in insurance rates," the report said. The Athletic was the first to report on the new fund and the money transfers.
The board justified the transfer, saying it was a way to expand the scope of the IRS Fund "for the purpose of providing financial support against potential future non-insured claims," Cromwell's report said.
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