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YLAWFUL GAMBLING
<br />ti,on revise its internal accounting and administrative control systems, it has
<br />rarely done so. We conclude:
<br />a 8,
<br />The Gm
<br />abling Control Dlivi son's review of organizations' internal
<br />61
<br />and administrative controls is inadequate.
<br />The Uambling Control Division does not review the organization's tax returns
<br />or, lawful purpose contributions, before licensing recommendations are made.
<br />For most organizations, if'the proper paperwork has, been filed the license is
<br />Lss,ued. We conclude.
<br />e The current licensing system, provides, little assurance that licensees
<br />are conducting gambilingin accordance with statute and rule.
<br />Audift,iing and Enforeement
<br />01
<br />e Very little auditing of organizations has occurred in the past.
<br />In 19881 the Charitable GamblinLy Board and Department of Revenue staff
<br />I "I
<br />conducted a total of 36 limited and 12 full-scale audits. In 1987, a total of five
<br />limited and two full-scale audits were conducted, biy Gambling Board staff.
<br />Gambling Board sitaff conducted one audit in 19815 and one in 198• .
<br />The, Department of Revenue plans to conduct a total of 50 audits in fiscal
<br />i,i,ear 19910 and 100 auditsin fiscal year 1991. Revenue conducted 14 limited
<br />and five full scale audits in 1,9189. Recently, most of the auditors' time has
<br />18 Revenue just filled three of these positions in December, 1989 and a fourth position is currently vacant.
<br />According to the Gambling Control Division,, because of a shortage of staff,
<br />the licensing, process has, in the past been largelyprofonna and not very
<br />thorough., For example, one of'the organizations we visited had recently filed
<br />months of back tax returns. The Gambliniz Control Board granted them a li-
<br />11W
<br />Licensing
<br />ce,nse when they were delinquent in their, tax returns.
<br />proviaes 11
<br />assurance that
<br />During our study we reviewed many tax returns., We found that there are
<br />organizations:
<br />0
<br />, during reviews of tax
<br />many problems evident on the tax returns.1 For example,
<br />comply With
<br />returns we found, organizations, that were violating rent rules, were missing
<br />for inventory
<br />funds from their, profit car onward, were accounting incor-
<br />state laws.
<br />rectly, were improperly deducting taxes, and were Violating expense and
<br />lawful purpose rules. These problems were all apparent from reviewing the
<br />tax returns.
<br />The Uambling Control Division does not review the organization's tax returns
<br />or, lawful purpose contributions, before licensing recommendations are made.
<br />For most organizations, if'the proper paperwork has, been filed the license is
<br />Lss,ued. We conclude.
<br />e The current licensing system, provides, little assurance that licensees
<br />are conducting gambilingin accordance with statute and rule.
<br />Audift,iing and Enforeement
<br />01
<br />e Very little auditing of organizations has occurred in the past.
<br />In 19881 the Charitable GamblinLy Board and Department of Revenue staff
<br />I "I
<br />conducted a total of 36 limited and 12 full-scale audits. In 1987, a total of five
<br />limited and two full-scale audits were conducted, biy Gambling Board staff.
<br />Gambling Board sitaff conducted one audit in 19815 and one in 198• .
<br />The, Department of Revenue plans to conduct a total of 50 audits in fiscal
<br />i,i,ear 19910 and 100 auditsin fiscal year 1991. Revenue conducted 14 limited
<br />and five full scale audits in 1,9189. Recently, most of the auditors' time has
<br />18 Revenue just filled three of these positions in December, 1989 and a fourth position is currently vacant.
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