Office of the Chief Financial Officer

Executive Summary for Closed Reports

Status as of March 5, 2014

 

Original Report

OIO Report No. 11-02-28-DCLB:  Audit of the District of Columbia Lottery and Charitable Games Control Board Operations, dated May 29, 2013.

 

Current Status

Closed.

 

Chief Risk Officer’s Risk Assessment

The Inherent Risk associated with the operational aspects of the games and supporting technology for the District of Columbia Lottery Board (DCLB) is classified as High risk. Therefore, particular emphasis is placed on OIO’s recommendations.

 

Recommendations Overview   

OIO provided seven recommendations and three have been implemented in an effort to strengthen internal controls. 

• Procedures have been enhanced to include ensuring retail agents have complied with the Department of Consumer Affairs Clean Hands Act.  The procedures were further enhanced by ensuring that no fewer than three Sales/Licensing staff members have access to the Citywide Clean Hands Database.
• Changes to the licensing process and/or requirements stipulated by District laws and regulations were documented via Administrative Issuances (Director's Memorandum 13-01 and Director's memorandum 13-02).
• During new agent recruitment training and any other refresher training, the Sales/Licensing Division will continue to reinforce the message that agents' compliance is monitored.  This is in keeping with DCLB's Security Division conducting routine compliance checks of agent locations at any given time. The purpose of these checks is to identify and hold accountable lottery agents or their employees who intentionally defraud lottery players of their legitimate winnings by theft or paying less than the full prize of a winning lottery ticket. In the event that an agent fails to comply, DCLB retains the option to suspend, terminate, revoke the license, or take any other enforcement action authorized by law.

Two of the remaining recommendations have also been fully implemented.

• Additional resources are being requested to ensure that all required licensing documentation is kept in retail agent files and readily available for external review. Documentation is kept in files and available for external review.  Additional documentation includes supervisory review evidenced by a sign-off required prior to recommendation for license approval to ensure program compliance.
   
• Additional resources are being requested, as directed, to adequately manage the license program, including program compliance. Compliance is reinforced to new agents during the agent training sessions. DCLB‘s Security department has a section in the agent training manual specifically dedicated to compliance. Current licensees’ compliance monitored through periodic spot checks conducted by the Security department.  In addition, compliance reminders are being published in the Gent Newsletter on an as needed basis.

One recommendation will only be partially implemented.

• Because DCLB's primary mission is to generate sales via the sale of lottery products, DCLB will not shut down agent terminals.  However, DCLB has revised and updated its NSF policy to protect the agency’s cash position and will follow said policy.

One recommendation will not be implemented.

• DCLB will not be enforcing a separation of duties between Draw Staff and Marketing Staff as the integrity of the draw is verified by the presence of one to two auditors on site at the Verizon Center at all times with the Draw Staff. The auditors certify the integrity of the draw process as well as the selection of winners; therefore, there can be no hint or impression of a pre-selected winner. However, to enhance the public perception of fairness, only one Draw Staff person will conduct the Draw and the other two assigned Draw staff personnel will only help when needed.

 

To view the full report, click DCLB Audit of the District of the Columbia Lottery and Charitable Games Control Board Operations.