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<br />EXECI IVE MARY M11,
<br />Our review oflawful purpose contributions made in 1988 revealed that.
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<br />Organizati6ons spent almos '
<br />t 2,5percent of their contributions on
<br />themselves, mostly for building construction or repair,, and property
<br />taxes. Beginning in mid-19881, most of these contributions were
<br />disallowed, without gambling board approval, but "gra,nd,fathered"
<br />building loans, will keep this fi gure high for many years.,
<br />*1 Government agencies,, including fire departments,, schools,, and parks,
<br />received 21, percent of all charitable contributions.,
<br />Medical and human service agencies each received 8 percent, of all
<br />contributions, youth sports groups and needy, Individuals each
<br />received, about 7 percent, and youth, sle cesll and veterans programs
<br />each received about 5 percent of all contributions.
<br />9 Only a small proportion of all contributions were not allowed under
<br />current board policy, notably $800,0010,1 or 1 percent of the statewide,
<br />total, which went for adult sports.
<br />A somewhat larger, proportion of contributions were questionable,
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<br />including $183,000 which was donated to, lobbying organizations and
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<br />many contributions which sponsoring organization gave to
<br />themselvesO
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<br />Under previoUs rules', orga,nizat,ions could make contributions to themselvesy
<br />and much confusion remains about what i's permitted and what i's not. Un,-i
<br />Coirtunately,
<br />State agencies have not developed comprehensive policies on
<br />allowable lawful purposes, nor have they effectively communicated to
<br />licensees the policies that do, exist. ,
<br />W 11 11101
<br />When the state, took over responsibility for gaming regulation, gamming
<br />board staffbegan to develop polim"esi on, what, types of expenditures met the
<br />i fully, developed.,
<br />definitilon. of lawful purpose., But the policies were never
<br />When organizations requested approval for lawful purpose contributions,
<br />they were handled in an ad hoc way without systematic follow throughei
<br />We reviewed one randomly selected contribution from each of 100 organi'za-
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<br />tioins to d,et,erm,i,ne 1) whether the, payee. actually received the funds, 2) 1-fthe
<br />funds had, been, used as stated by the, payee, and 3) if the organization had,
<br />prioperil,y approved, the expenditure.
<br />We found, that the payee was, accurately reciord,ed in 95 of 10�O cases. The
<br />other cases were reimbursements to the organizations" geinerial, bank account
<br />for contributions, made through the generiail account. While th,i,s practice of
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<br />imbursing the, general account for lawful, purpose contributions is allowed by
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<br />rule I it, creates, a loss of control, over, the gambling account. It', al,so makes com-i
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