Hoosier Lottery recoups money from extravagant spending

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The Hoosier Lottery has a new direction and is on the verge of getting a new director. The Lottery has come under fire for extravagant spending during its relocation and subsequent remodeling.

13 Investigates broke the story of the extravagant furnishings when former Lottery Director Kathryn Densborn took Investigative Reporter Bob Segall on a tour of the new office and touted them as cost-effective. Thursday, interim director Megan Ornellas informed the Lottery Commission what steps she was implementing to rectify the situation.

The lottery is a game of chance - spend a little in hopes of getting a lot - but what happens when the lottery hits it big and starts spending $200 on clocks, $319 on mirrors, $553 on chairs, $800 on bar stools and $11,000 for a work table?

"Lost track of the fact that we are a government agency and we need to look and behave a little more like that," said Lottery Commission Chairman William Zielke. "It was an issue of excess, not bad decisions."

That started earlier this week when the Lottery's $25,000 gym was shipped out to the Indiana Law Enforcement Academy.

"The Indiana Law Enforcement Academy provides training to law enforcement officers around the state. So much of the fitness equipment is old and not in good working condition, so our equipment was very much appreciated and will be put to good use," said interim director Megan Ornellas.

The Lottery also recouped $72,000 in electronic equipment that had been purchased, but not yet delivered, Ornellas said. Custom-ordered furniture was sent to the state surplus to be auctioned to recoup those funds.

"In addition, we are working with a retailer to resell the other used furniture by the Lottery," Ornellas said.

The Lottery also announced plans to save rent money at its new Buick Building location.

"As part of this plan, the first floor of Hoosier Lottery will move to the second floor to accommodate (the Horse Racing Commission) as a tenant," Ornellas said.

The Horse Racing Commission and the Lottery will share the first floor conference room, reception area and break room. The Lottery will complete plans for a first-floor retail offering and is also negotiating to sub lease an additional 3,700 square feet.

"Under this agreement, our total costs will be $560,000 annually, which is 10 percent less than the cost at Pan Am Plaza," Ornellas said.

Ornellas went on to outline recommendations for new internal controls and checks and balances, when it comes to spending and purchasing.

Karl Browning, the former CIO of the State Office of Technology is expected to be offered and accept the position of Executive Director of the State Lottery. The appointment by Governor Mitch Daniels is expected to take place this week, allowing Browning to be on the job by Monday.

Browning served in the Daniels administration in two capacities. First, as Chief Information Officer for the state's Office of Technology until 2006, when he took the reins at the Indiana Department of Transportation.

The Lottery is also implementing various policy changes to curb any possible spending excesses in the future.