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Audit Audit of the Massachusetts State Lottery Commission

The audit of MSLC shows improvements in oversight of lottery sales and game integrity. The audit, which examined April 5, 2019 through March 31, 2020, pointed to deficiencies in criminal background record checks for lottery sales agents, reconciliation reports for terminated sales representatives, as well as the process the agency was using to prevent family members of lottery employees from claiming winning tickets.

Organization: Office of the State Auditor
Date published: June 9, 2021

Executive Summary

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor (OSA) has conducted a follow-up audit of the Massachusetts State Lottery Commission (MSLC) for the period April 5, 2019 through March 31, 2020.

The purpose of this follow-up audit was to determine whether MSLC had effectively resolved the issues OSA identified during our previous audit No. 2013-0089-3S, which covered the period July 1, 2010 through September 30, 2012. In our current audit, we sought to determine whether MSLC had properly conducted criminal background reviews and financial credit reviews of all new lottery sales agent applicants, as well as criminal background reviews of all active agents every four years after their initial reviews for the duration of their MSLC licenses. We reviewed the process for terminating agents to ensure that MSLC properly accounted for and safeguarded all tickets in the custody of terminated agents. Finally, we determined whether MSLC employees, or their immediate family members living in their households, had claimed prizes, which they are prohibited from doing by Section 31 of Chapter 10 of the General Laws.

Below is a summary of our findings and recommendations, with links to each page listed.

Finding 1
 

MSLC did not conduct all required fourth-year Criminal Offender Record Information (CORI) reviews for its active lottery sales agents.

Recommendation
 

MSLC should continue to reduce the backlog of lottery sales agents who have not had CORI reviews.

Finding 2
 

Terminated lottery sales agents’ reconciliation reports were missing.

Recommendation
 

MSLC should establish policies and procedures to ensure that all required reports for reconciling instant ticket game books and funds are generated.

Finding 3
 

MSLC missed 39 potential claimant addresses that may have matched MSLC employee addresses.

Recommendations
 

  1. MSLC should investigate the potential matches to ensure that no employee or employee’s family member claimed a prize.
  2. MSLC management should ensure that each claimant’s address information is accurately and completely entered in the Enterprise Series system.

 

A PDF copy of the audit of the Massachusetts State Lottery Commission is available here.

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