§ 23-115-206 - Internal controls -- Annual audit.
23-115-206. Internal controls -- Annual audit.
(a) To ensure the financial integrity of lotteries, the Arkansas Lottery Commission shall:
(1) Establish and maintain effective internal controls over financial reporting, including the monitoring of ongoing activities, and comply with the Arkansas Constitution and applicable laws, rules, contracts, agreements, and grants;
(2) Establish and maintain effective internal controls to prevent and detect fraud, including without limitation a system of internal audits;
(3) Include in any contract or license with a vendor or retailer for data processing services or other computer services a provision permitting the Division of Legislative Audit to have access and authority to audit the computer systems of the vendor or retailer;
(4) Notify the division of all known fraud or suspected fraud or all known or suspected illegal acts involving management or other employees of the commission or others with whom the commission contracts;
(5) Inform the division and the Chief Fiscal Officer of the State of any known material violations of the Arkansas Constitution, applicable statutes, rules, contracts, agreements, or grants;
(6) Prepare the financial statements, including the related notes to the financial statements, of the commission in accordance with generally accepted accounting principles and in accordance with guidelines and timelines established by the Chief Fiscal Officer of the State to permit incorporation into the state's financial statements and to permit the audit of the state's financial statements and the commission's financial statements in a timely manner;
(7) Make all financial records and related information available to the division, including the identification of significant vendor relationships in which the vendor has the responsibility for program compliance, in accordance with 10-4-416 and 10-4-424;
(8) (A) Submit monthly and annual reports to the Governor and the Arkansas Lottery Commission Legislative Oversight Committee disclosing the total lottery revenues, prize disbursements, operating expenses, net assets, and administrative expenses of the commission during the reporting period.
(B) (i) The initial annual report shall describe the organizational structure of the commission and summarize the functions performed by each organizational division within the commission.
(ii) Future annual reports shall describe any revisions to the organizational structure since the filing of the previous annual report;
(9) Maintain weekly or more frequent records of lottery transactions, including without limitation:
(A) The distribution of tickets or shares to retailers;
(B) Revenues received;
(C) Claims for lottery prizes;
(D) Lottery prizes paid;
(E) Lottery prizes forfeited; and
(F) Other financial transactions of the commission;
(10) (A) Submit to the Cochairs of the Arkansas Lottery Commission Legislative Oversight Committee by April 30 of each year a copy of the annual operating budget for the commission for the next fiscal year.
(B) The proposed operating budget shall be accompanied by:
(i) An estimate of the net proceeds to be available for scholarships and grants during the succeeding fiscal year; and
(ii) The following information for each employment classification:
(a) The total number of persons currently employed;
(b) The number of white male employees;
(c) The number of white female employees;
(d) The total number of Caucasian employees;
(e) The number of black male employees;
(f) The number of black female employees;
(g) The number of other employees who are members of racial minorities; and
(h) The total number of minorities currently employed; and
(11) Adopt the same fiscal year as that used by state government.
(b) (1) (A) The division shall annually audit the commission.
(B) The division may conduct an investigation or audit or prepare special reports regarding the commission or related entities, scholarships, grants, vendors, retailers, or any other transactions or relationships connected or associated with the commission or its operations, duties, or functions upon the approval of the Legislative Joint Auditing Committee.
(2) The commission shall reimburse the division at an hourly rate set by the Legislative Joint Auditing Committee for work performed by the division relating to any audit, investigation, or special report regarding the commission and related entities, scholarships, grants, vendors, retailers, or other related matters.
(3) (A) If the commission, the General Assembly, the Arkansas Lottery Commission Legislative Oversight Committee, or the Legislative Joint Auditing Committee requests additional audits or performance reviews of the fiscal affairs or operations of the commission to be conducted by a private certified public accountant or other consultant, the division shall select and contract with appropriate certified public accountants or consultants to provide the services.
(B) The division shall contract for the services which shall be paid directly to the contractor by the commission.
(C) A copy of any report or management correspondence prepared by the certified public accountants or consultants shall be forwarded to the commission, the division, and the Arkansas Lottery Commission Legislative Oversight Committee.
(4) This chapter does not limit the statutory authority of the division or the responsibilities of the commission or related entities, board members, employees, vendors, retailers, or any other individuals or entities to cooperate with the division or provide information or records requested by the division.