this is from the Diversity Section of the St.Louis American newspaper.
No diversity plan, no license
Casinos cannot get or renew their casino licenses without a diversity plan.
That’s the policy that the Missouri Gaming Commission established in 2008. It requires any applicant, for licensure or renewal license, to provide a detailed workforce diversity plan, said John Nathan, who was hired as the compliance officer in 2006 to oversee the process.
And the state’s 13 casinos must submit quarterly reports on minority participation as well.
The quarterly reports include employee, managers and directors demographics, minority vendor/supplier information and construction spending.
Starting last year, in compliance with state statute, the commission took a more rigorous step – auditing quarterly reports. The commission contracted with a third-party certified professional accounting firm to verify the casinos’ minority/women business enterprise quarterly statistical reports, Nathan said.
In addition to a 100-percent review of all contracts with M/WBE’s before re-licensure every two years, the CPA firm looks at all minority certification. If a vendor is found not to be certified as a M/WBE, the commission will exclude their spending amount from the minority statistical reports.
In June, the St. Louis American submitted a Sunshine law request for the first audits. Two audits have been completed so far – Kansas City’s Isle of Capri and Argosy Casino.
On May 10, 2010, the firm completed its audit of the Isle of Capri in Kansas City. In its overall findings, it states that “the casino did not have sufficient documentation to substantiate or identify the MBE and WBE spending. The reports had errors in the calculations, which caused the summary information not to add up to the totals.”
For calendar year ended Dec. 31, 2008, the Isle of Capri’s certified MBE utilization was 2.39 percent, but it reported 8.94 percent. For calendar year ended Dec. 31, 2009, the MBE utilization was 4.23 percent, and the casino reported 6.57 percent.
Breaking it down quarter by quarter, the difference in what the casino reported and the MBEs it actually utilized was more severe.
For example, in 2009, for the first, second, third and fourth quarters, the casino’s certified MBE utilizations were 3.14, 1.81, 3.65 and 1.65 percent. It reported 6.10, 9.33, 10.43, and 1.60 percent.
By seeing the difference in what casinos self-report and what the auditor finds, Nathan said the audit process is essential for ensuring minority participation.
The quarterly reports also track diversity in employment. For 2010 at Isle of Capri, the casino reported that 31 percent of employees are black and 18 percent manager/director positions are black.
At St. Louis’ Lumiere Casino for 2010, 40 percent of employees are black and 16 percent of managers or directors are black.
In addition to the audits, the commission’s compliance offi-cer, Nathan, who worked for Social Security Administration for 30 years, makes personal visits to the casinos. He tries to build a relationship with the casinos to help them succeed in their minority participation goals, he said.
To ensure that casinos are aware of their local diversity vendor resources, Nathan also takes the vendor lists of every casino and compiles them into one list.
That way, if casinos find themselves with a low minority-inclusion rate because they cannot find M/WBE vendors, Nathan can hand them the list, he said.
What Nathan is looking for is progress.
“The commission doesn’t want someone retrogressing,” he said. “In the three plus years, we’ve made great strides.”
The commission itself does not set quotas for the casinos. It holds each casino up to the MBE/WBE goals that each casino sets for itself. For example, Lumiere, the City of St. Louis and Pinnacle Entertainment, which owns the casino, set a minority participation goal of 25 percent.
Prior to contracting the CPA firm for the audits, Nathan himself would call a sample of vendors to make sure they were certified.
“I couldn’t do 100 percent,” Nathan said. “It’s just magnificent what the commission is trying to do. It solidified the efforts to assure that we were serious.”
Nathan expects that all the audits will be completed by October. Nathan said the audits will help the commission to see whether “we were accomplishing what we wanted to do.”
Nathan also meets with the minority vendors to get to know the industry, along with Missouri legislators and local officers.
The entire process – from the audits to visiting vendors –helps to achieve the maximum participation of minority and women in the procurement of contractual purchase of goods and services, Nathan said.
“The commission is committed to full inclusion of minority and women with all the casinos in Missouri,” Nathan said.
