Lottery Commission
An Audit Report on Management Controls at the Lottery Commission's Charitable Bingo Division
October 1998
Report Number 99-004
Overall Conclusion
The Lottery Commission's Charitable Bingo Division (Bingo Division) does not receive or fully use all the financial, security, and performance data necessary to ensure it manages its resources efficiently. This has an adverse impact on its ability to effectively achieve its mission of maximizing the revenues distributed to licensed charities by ensuring that the bingo games are conducted fairly.
To ensure the fairness and integrity of the industry, the Bingo Division relies on its own Licensing and Audit Services sections and on the Commission's Security Division to enforce bingo regulations. Improvements are needed in the Licensing Section to reduce the potential risk of licensing ineligible charities. The Audit Services Section ensures fairness and integrity in the bingo industry by effectively identifying and auditing potential violators of the Bingo Enabling Act. Enhancing the process used to select organizations for audit and adding procedures to increase audit efficiency would improve these processes.
Key Facts and Findings
The Bingo Division does not obtain or use all the information it needs to efficiently manage resources and effectively regulate bingo licensing. Executive management does not always ensure information reaches the managers who need it.
- The Bingo Division spent 28 percent of its operating budget for support services provided by other Lottery Commission divisions. The costs do not reflect the actual cost of the services. Due to the lack of cost information, unbudgeted fiscal year end expenses have averaged approximately $200,000 or 7.5 percent of total budget over the last two fiscal years.
- Greater control by the Bingo Division over certain areas of the enforcement of regulations would add vital information to improve licensing and audit functions and provide possible cost savings of approximately $27,000 per year.
- The automated Charitable Bingo System contains many access problems and inefficiencies. A formal needs assessment and cost/benefit analysis are needed to determine if the system should be replaced.
- Management controls over the Licensing Section should be improved to further limit the risk of licensing ineligible charities.
- The Audit Services Section has processes and audit coverage that ensure charities and lessors of bingo facilities comply with bingo statutes and regulations. An improved audit selection process and more efficient audits should enable Audit Services to increase this regulatory effectiveness.
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