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lip XV11i ]LAWFUL 4AMBLING a- I k1A xll�l O-KIII-C 1 0 FOAN 0 - [C i z This approach requires the state to establish, clear guidelines and set up a si tem to ensure accountability. Unfortunately', as we have seen, guidelines arl, not in, place, accountabi I lity is weak, and numerous problems have, resulted Assum Mg that the state continues to allow gambling and to imist, that the pro-, ceeds, are used for certain approved purposes, we recommend the followiffig, 9 State agencies need to establish clear and consistent poili I Cies on what 1s an, allowable expense" and what is a permissible "la wful purpose contribution." These policies need, to be communicated clearly to organizations conducting gamb 19 ing operaflons.1 State agencies need to establish. a program of field audits to review expenses and lawful purpose contributions. Audits should be p i itized, to ensure that organizations presenting the greatest risks r orl, I I are audited more freq,uently. a At a, minimum, newly required annual financial audits should include a re,con,- cilhation of'the gambling bank accounts and the profit carryforward. would enable detection of' missing funds. Also,, the Department of Revenue 01 a 4 shoulIM review required tax forms -to identify existing discrepancies. Accomplishing these tasks will require additional, plubilic resources, but, the number of new staff' needed depends principally on the frequency ofaudlots, and the amount of risk, policymakers are willing to tolerate in gambiling. opeira tions. I In addition to adding new staff, other steps could be taken to reduce the risk 0, of abuse of gambling operations. First, new requirements could reduce the sale and distribution. of 'illegal pull-tabs. We recommend that-. # The Legislature should require pull-tabs bs sold n Minnesota to, be imprinted, with the notice, "For Safelin Minnesota Only,," le The Legislature should require pull-tabs manufacturers to report all sales of products sold In Minnesota,.