Auditor analyzes lottery operations
Tuesday, November 27, 2012
State Auditor Tom Schweich today recommended some changes in state lottery operations in a 23-page audit released at mid-day.
And the Lottery generally agreed.
The audit cited three problem areas: "Deficiencies in internal controls, noncompliance with legal provisions, and the need for improvement in management practices and procedures."
In the state's 2009-10 and 2010-11 business years, Schweich's audit said, "The Lottery renegotiated some contracts instead of rebidding the service" and "also entered into long-term contracts for other services" — violations of "state purchasing laws, rules, and regulations (which) provide that a formal method of solicitation, such as Request for Proposals, should be utilized for purchases exceeding $25,000," and that Lottery contracts be "awarded 'on the basis of lowest and best bid on an evaluation basis.'"
In its response, the commission said: "Although some contracts have extended renewal terms, they are renegotiated before renewing to ensure the Lottery is receiving the best price and service."
The audit questioned the Lottery's sponsorship of "local community events," because they cost more than the Lottery gets back.
The commission responded: "The return on community events is typically lower than the return on other sponsorships because community events focus on community outreach and building relationships rather than ticket sales."
Even with the recommended changes, Schweich's audit gave the Lottery Commission a "good" rating.
More details in Wednesday's News Tribune