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MO Lottery receives clean audit, on pace for another productive year

JEFFERSON CITY, Mo. – The past fiscal year was a very productive one for the Missouri Lottery, and it looks like it’s on path for another great year in FY 2017.

The lottery transferred $26.1 million in profits Friday to the Lottery Proceeds Fund, bringing the total for the 2017 fiscal year to more than $143.7 million. That’s nearly half of what the lottery built up during FY 2016, in which they recorded a record $308.9 million. The December transfer of $26,142,925 is based on ticket sales in November.

The Lottery Proceeds Fund helps provide funding to programs like the A+ Scholarship Program, the Foundation Program and Access Missouri, to name a few. Since 1986, Missouri Lottery sales first began in the state, the lottery has generated more than $5.5 billion for the state and public education.

Each year, the proceeds are allocated by the governor and the state’s legislature during the annual appropriation process. Lottery proceeds make up about 4 percent of the state’s annual funding for public education.

In addition to providing funds for public education, the lottery also benefits the state by collecting state taxes on prizes of more than $600. During FY16, the Missouri Lottery added $5.9 million in state tax collections from prize winnings to the General Revenue Fund.

The Lottery received more good news during the commission’s agenda meeting Friday morning: the results of an independent audit.

Barb DuBois of CliftonLarsonAllen reported an unmodified audit of the Missouri Lottery, or in laymen terms, a clean audit with no issues, saying the report had a “lot of good news to report in financial statements”.

The audit focused a sharp eye on internal control, cash and investments, revenue recognition, prize expenses and accruals, pension liability, transfers to state, contractual agreements and information technology.

DuBois said they did not identify any significant deficiencies or material weaknesses during their audit. Any issuance of an internal control letter would be considered a negative, but no letter was issued.

The audit showed the total assets for the lottery increased by $4 million, as did the liabilities. The lottery also had a significant increase in sales, with scratcher ticket sales going up and Powerball buys up by roughly $50 million from the previous year. The total revenue increased from $1.1 billion to $1.3 billion.

“That, of course, allows the Lottery to return to the state for education in an additional $30 million this year,” DuBois said.

But, as the commission noted, there has been questions in the past about whether that money really goes where they say it does – with some speculation from the Missouri government. Two years ago, Gov. Jay Nixon overhauled the commission, replacing four of the five commissioners and suggesting they take a “clean look” at everything.

The commission received a report on the legislature during Friday’s meeting, taking a look at the number of pre-filed bills and the effect they would have on the Missouri Lottery. (As of now, there are none.)

The commission says that one of their goals is to prove where the funding goes and encourages those with questions about proceeds to visit the “Where the $ Goes” section at MOLottery.com.