Risk Assessment 03/08

CALIFORNIA LOTTERY Audit Report RISK ASSESSMENT As of June 30, 2007 J C OHN HIANG California State Controller March 2008 J C OHN HIANG California State Controller March 21, 2008 Joan M. Borucki, Director California Lottery 600 North Tenth Street Sacramento, CA 95814 Dear Ms. Borucki: The State Controller’s Office (SCO) has completed a risk assessment of the California State Lottery’s (Lottery) operations as part of its ongoing responsibilities under the California State Lottery Act. The risk assessment included operations and activities as of June 30, 2007. We performed the assessment to evaluate the Lottery’s operations and activities in terms of the various risks to which those operations and activities are exposed, and to prioritize the operations and activities into risk categories, in order to facilitate future SCO audit plans. The SCO identified 148 operations and activities and developed a listing of risk factors with which to prioritize operations and activities. In our risk assessment, we categorized the operations and activities into five categories as follows: • 25 are high risk; • 59 are medium-high risk; • 18 are medium risk; • 22 are medium-low risk; and • 24 are low risk. The SCO will periodically assess the effect of any future changes in the Lottery’s operations and activities. Such an assessment will facilitate adjustments to audit priorities and our future audit plans. If you have any questions, please call Andrew Finlayson, Chief, State Agency Audits Bureau, at (916) 324-6310. Sincerely, Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits JVB/sk:vb Joan M. Borucki -2- March 21, 2008 cc: John Mass, Chairman California Lottery Commission Rachel Montes, Commissioner California Lottery Commission Manuel Ortega, Commissioner California Lottery Commission Patt Eberhart, Director Finance and Administration California Lottery California Lottery Revenue Collections Process Contents Audit Report Summary ............................................................................................................................. 1 Background ......................................................................................................................... 1 Objectives, Scope, and Methodology ................................................................................ 1 Conclusion ........................................................................................................................... 4 Restricted Use ..................................................................................................................... 4 Risk Assessment Ranking Schedules Schedule 1—High Risk Operations and Activities .......................................................... 5 Schedule 2—Medium-High Risk Operations and Activities .......................................... 7 Schedule 3—Medium Risk Operations and Activities .................................................... 11 Schedule 4—Medium-Low Risk Operations and Activities ........................................... 12 Schedule 5—Low Risk Operations and Activities .......................................................... 14 California Lottery Revenue Collections Process Audit Report Summary The State Controller’s Office (SCO) performed a risk assessment of the California Lottery (Lottery) operations as part of its ongoing responsibilities under the California State Lottery Act. We performed the assessment to evaluate the Lottery’s operations and activities in terms of the various risks to which those operations and activities are exposed, and to prioritize the operations and activities into risk categories, in order to facilitate future SCO audit plans. The SCO identified 148 operations and activities and developed a listing of risk factors with which to prioritize operations and activities. In our risk assessment, we categorized the operations and activities into five categories as follows: • 25 are high risk; • 59 are medium-high risk; • 18 are medium risk; • 22 are medium-low risk; and • 24 are low risk. Background By authority of the California Constitution, Government Code section 12410 states, “The Controller shall superintend the fiscal concerns of the state. The Controller shall audit all claims against the state, and may audit the disbursement of any state money, for correctness, legality, and for sufficient provision of law for payment.” In addition, Government Code section 12411 stipulates that “ . . . the Controller shall suggest plans for the improvement and management of revenues.” Proposition 37, the California State Lottery Act of 1984 (Lottery Act), amended the California Constitution to authorize the establishment of a statewide lottery, to create the California Lottery Commission, and to give the commission broad powers to oversee the operation of a statewide lottery. Pursuant to Government Code section 8880.67, the SCO may conduct other special post-audits of the Lottery, as the State Controller deems necessary. The Controller or his/her agents conducting an audit under this chapter shall have access and authority to examine any and all records of the California Lottery Commission. Objectives, Scope, The specific objective of this risk assessment is to review and evaluate and Methodology the California Lottery’s (Lottery) operations and activities in terms of the various risks to which those operations and activities are exposed, and to prioritize the operations and activities into risk categories, in order to facilitate future SCO audit plans. The risk assessment included operations and activities as of June 30, 2007. This engagement was a survey, not an audit. As such, it does not constitute an audit under Generally Accepted Auditing Standards. -1- California Lottery Revenue Collections Process The risk assessment is a systemic process of gathering, assessing, and integrating professional judgment conditions that impact the financial and operational activities of organizations. This process provides a logical methodology with which to determine the priority listing of Lottery operations and activities, based on risk. The SCO developed a comprehensive list of all operations and activities of the Lottery that could be audited. This list was determined by: 1. Performing a review of: • Prior risk assessment ranking schedules for the operations and activities noted in the previous SCO’s Risk Assessment report, dated August 2002; • The Lottery’s Organization Charts and Narrative Summaries publication for Fiscal Year 2006-2007, which describes the operations and activities of each division; • The Lottery’s contract listing to determine if contracts should be included in the Risk Assessment listing of operations and activities; and • The Lottery Internal Audits Office risk assessment to determine if the operations and activities should be included in our risk assessment. 2. Interviewing Lottery managers to confirm that the list contained all of the operations and activities in their respective divisions. The procedures we performed to assess the risk associated with each operation and activity included: • Identifying and developing critical factors to evaluate the operations and activities identified above; • Assigning each identified operation and activity a score for each risk factor; • Computing a composite risk score for each operation and activity; • Ranking the operations and activities in descending order, from highest to the lowest, and assigning each operation and activity to five risk categories ranging from high to low; and • Evaluating the overall reasonableness of the risk assessment rankings and the placement of operations and activities into the five risk categories. -2- California Lottery Revenue Collections Process The risk categories and the relative weighting of these categories are based on the most relevant critical factors for assessing risk as determined by the judgment of SCO management and staff. Each of the risk factors, except for extraordinary circumstances, received a score of one to five, with one indicating minimum risk and five indicating maximum risk. Risk factors in the Extraordinary Circumstances category were automatically given a score of five. The risk factors and their respective descriptions are as follows: 1. Financial impact—This factor was based on the dollar amount of the transactions, complexity of the transactions, and frequency of the transactions. 2. Compliance—This factor was based on the operation or activity’s mandatory compliance with the Lottery Act, other legal requirements, and the State Administrative Manual (SAM). 3. Prior SCO experience—This factor was based on prior audits and reviews the SCO has performed on the operation or activity. 4. Change in operations/new processes—This factor was based on any changes or new processes occurring with an operation or activity. 5. Security and integrity—This factor was based on the complexity and diversity of operating systems, physical access, and logical access. 6. Extraordinary circumstances—This factor was based on any important and unusual matters that deserve special attention. The scores of each of these factors were entered into a risk matrix. Each of the six risk factors was given a weight based the judgment of SCO management and auditors as follows: Risk Factor Weight Given Financial impact 50% Compliance with Lottery Act, other legal requirements, and SAM 30% Prior SCO experience 10% Change in operations/new process 5% Security and integrity 5% Extraordinary circumstances 100% We computed a final risk score for each of the Lottery’s operations and activities based on the score of each of its risk factors and the weight given to the factor. A total score of 10, which indicates maximum risk and includes the Extraordinary Circumstance risk factor, was possible. -3- California Lottery Revenue Collections Process Conclusion The SCO identified 148 operations and activities as critical or necessary functions within the Lottery. Based on the composite score of each operation and activity, the SCO categorized the operation or activity into one of five levels of risk: high, medium-high, medium medium-low, and low. The results of the final categorization of operational and activities are as follows: Number of Level of Operations Risk Explanation of Risk and Activities Schedule High Operations/activities that, due to their 25 1 nature and the level of current oversight, must be audited on a routine basis. Medium- Operations/activities for which a periodic 59 2 High audit is advisable, due to their nature and current level of oversight. Medium Operations/activities for which a periodic 18 3 audit is advisable, given time constraints and resources. Medium- Operations/activities that, as ranked by 22 4 Low the risk matrix, include only some risk. As such, an audit may be warranted at some time. Low Operations/activities that possess little or 24 5 no risk. In these cases, a new extraordinary circumstance would need to occur to warrant an audit. The risk assessment included operations and activities as of June 30, 2007. The SCO will periodically assess the effect of any future changes in the operations and activities. Such an assessment will facilitate adjustments to our audit priorities and future audit plans. Restricted Use This report is intended for the information and use of the California Lottery, the California Lottery Commission, and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of the final report, which is a matter of public record. Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits March 21, 2008 -4- California Lottery Revenue Collections Process Schedule 1— High Risk Activities and Operations As of June 30, 2007 Composite Operations and Activities Division Description Score Draw Audit Contract–KPMG Executive Provide Draw Audits services and agreed-upon 7.77 procedures. Scratcher Game Contract– Executive Produce and deliver and standard Scratcher game 7.25 GTECH/CGI, 06/06/07 tickets. Security Audit Contract– Executive Provide security evaluation audit services. 6.93 Getronics Audits, Reviews, and Special Executive Internal Audit reviews and other projects. 6.26 Projects Monitoring Audit Contracts Executive Coordinate audits to minimize duplications or 6.21 omissions. Monitor and Implement Audit Executive Monitor the status and implementation of all internal 6.20 Recommendations and external audit recommendations. Prize Assignment Finance and Process winner’s request for trusts, beneficiary, 4.32 Administration designations, estates, group claims, loan and sales, etc. of installment payments. GTECH On-Line Gaming Information Provide online gaming system. 4.30 Contract (exp. 10/13/09) Technology Services Receipts and Disbursements Finance and Monitor and record cash receipts, deposits, and 4.18 of Funds Administration remittances of money. Delinquent Account Finance and Coordinate the efforts to collect moneys due from 4.17 Collections Administration terminated retailers. Monitor collection agency contract for compliance with percentage fee billings. Purchase and Disposal of Finance and Acquisition of investments to fund the payment of 4.16 Investment Securities Administration the deferred prizes; cash out (bond liquidation) the unclaimed annuity prizes for transfer to Education. Procurement Function Executive Oversee procurement functions. 4.12 Banking Activity (Electronic Finance and Processing of electronic files created for billing 4.04 Fund Transfer) Administration purposes and ensuring appropriate retailer bank accounts are maintained on the Stratus, IBM, and Platinum accounts receivable systems. Procurement System Executive Contract/procurement management system for the 3.90 initiation, approval, acceptance of goods and services, and approval of payment. Payroll Finance and Maintain and process all payroll transactions, 3.90 Administration including distribution of warrants. On-Line Claims Finance and Validate and process online claims from winners and 3.88 Administration from district offices. Scratcher Claims Finance and Validate and process Scratcher game prize claims 3.88 Administration from winners and from district offices. -5- California Lottery Revenue Collections Process Schedule 1 (continued) Composite Operations and Activities Division Description Score Game Accounting Finance and Analyze, reconcile, research, and accrue of online 3.86 Administration and Scratcher game accounting activities such as sales, prizes, commission expenses, etc. Contract Services Executive Oversee contracting functions. 3.78 Classification and Pay Human Administer the State’s classification plan and related 3.73 Resources personnel actions. Retailer–Accounts Finance and Analyze and reconcile electronic fund transfers due 3.72 Receivable Collections Administration to/from retailers, including non-sufficient funds. Financial Statements, Finance and Analyze and prepare GAAP quarterly and annual 3.70 Reports, and Footnotes Administration financial statements, with full disclosure footnotes. Analyze and prepare end-of-game report and the monthly management information reports. General Market Advertising Marketing Provide general marketing advertising for all Lottery 3.70 Contract–Grey Worldwide products. Verizon Contract Information Provide telephone services of online and Scratcher 3.70 Technology games in Southern California. Services Pacific Bell Contract Information Provide telephone services of online and Scratcher 3.70 Technology games in Northern California. Services -6- California Lottery Revenue Collections Process Schedule 2— Medium-High Risk Activities and Operations As of June 30, 2007 Composite Operations and Activities Division Description Score Accounts Payable-Vendors Finance and Maintain and monitor accounts payable transactions 3.68 Administration for Lottery vendors and retailers. Leave Balances Human Maintain data on employee leave balances. 3.66 Resources Personal Transaction Human Process personnel transactions, payroll, and benefits. 3.65 Processing Resources End of Game Finance and Reconcile end-of-game ticket inventories to the 3.59 Reconciliations Administration accounts receivable system. Draw Management Security Manage, coordinate, and approve activities related to 3.56 mechanical and automated draws, such as the Big Spin and online game draws. Alcone Marketing Group Marketing Provide development, design, and implementation of 3.56 (exp. 08/31/08) promotions and point-of-sales materials. BBDO West Contract Marketing Provide general market advertising for the California 3.56 (exp.04/30/08) Lottery. Quarterly Transfer Finance and Quarterly transfer of net revenues to public 3.55 Administration education. Scratcher Ticket Inventory Sales Provide retailer services for sales and promotions, 3.53 Management resolve retailer problems, and manage Scratcher inventory. Gaming Security–Online, Security Conduct all investigations, including criminal 3.50 Scratcher Games, and investigations, for the Lottery. Monitor and analyze Scratcher Products criminal activities and trends of criminal organizations that negatively affect the Lottery. Maintain liaison with law enforcement agencies. Scratcher Game Close-out Marketing Process closing and ending Scratcher games. 3.48 Process Mail Services Finance and Receive business mail and distribute intra-office 3.46 Administration mail. Receive and prepare second chance draw mail for the drawing. Log and track certified and registered claims mail. Cassanova Pendrill Contract Marketing Provide Hispanic market advertising. 3.44 (exp. 05/31/09) Adjustment Activity Finance and Process manual payments and adjustments to retailer 3.41 Administration accounts. District Sales Representative Sales Award DSRs with quarterly bonuses if they meet 3.39 Bonus sales goals. Other Telecommunications Information Monitor various contracts for the support of 3.37 Contracts Technology telecommunications systems. Services -7- California Lottery Revenue Collections Process Schedule 2 (continued) Composite Operations and Activities Division Description Score Equipment/Inventory Human Maintain Lottery-owned property inventory and 3.34 Resources coordinate office relocations. Jonathan Goodson Marketing Produce the “Big Spin” television show. 3.32 Productions (exp. 12/31/07) Investigation of Security Investigate questionable and fraudulent tickets. 3.28 Questionable Fraudulent Tickets Special Investigations Security Conduct investigations of civil, internal, 3.25 administrative, employee, contractor, criminal, and disclosure issues. Monitor production of Scratcher tickets and conduct preliminary investigations into lost or stolen Lottery tickets. Monitor complaints against retailers and assist in authenticating online tickets. Monitor games to ensure security and integrity. Gaming Contracts Information Conduct software acceptance testing for Online and 3.20 Management Section Technology Scratcher games. Provides gaming vendors and in- Services house Lottery application installs. Assist with monitoring services, including telecommunication services. Web Site Corporate Com- Create, maintain, and update public Lottery Web site. 3.20 munications Background Investigations Security Maintain database for background investigations. 3.18 System Cash Management System Finance and System to reconcile bank accounts. 3.17 Administration Annuity System Finance and Process investments to fund the grand prize and 3.16 Administration monitor the investment portfolio. Process installment prize payments through the prize authorization process and create the prize claim schedules tapes for (SCO) payments. Broadcast Programs Marketing Manage Lottery broadcast programs, including “Big 3.16 Productions Spin” and televised draws. Retailer-Account Finance and Maintain communication with retailers to collect 3.15 Management Administration moneys owed the Lottery. Analyze and resolve retailer questions regarding Lottery billing processes. Key Accounts – Chain Sales Develop and maintain communications with major 3.13 Retailers retail chains and franchise organizations. Procurement System Finance and Maintain procurement records and process purchase 3.12 Administration acquisition. General Ledger Analysis Finance and Monthly analysis and reconciliation of general ledger 3.10 Administration accounts. District Sales Representative Sales Provide sales support and promotional services for 3.10 Activities games. -8- California Lottery Revenue Collections Process Schedule 2 (continued) Composite Operations and Activities Division Description Score Retailer Network Sales Plan and direct retailer network services. 3.10 Management Revolving Fund & Finance and Maintain and monitor disbursement records, 3.09 Disbursements/Travel Administration revolving fund transactions, and travel advances. Market Facts Inc. Contract Marketing Provide a continuous tracking study of consumer 3.06 awareness, attitudes, and playership. Time Advertising Contract Marketing Provide Asian advertising services. 3.06 Quarterly Accruals- Finance and Record and process quarterly accruals for vendors. 3.05 administrative expense Administration Tax Unit Finance and Process tax deposits, provide tax reporting to 3.04 Administration governmental agencies, and process 1099s and W-2Gs for winners, retailers, and vendors. Questioned Tickets Finance and Review questionable tickets submitted for prize 3.04 Administration claims. Manual Payments Processing Finance and Process all manual payments to vendors, retailers, 3.01 Administration and employees. Media Relations Corporate Develop and disseminate information to media; press 3.00 Com- releases, media advisories, earned media events, etc. munications Point-Of-Sale (POS) Marketing Develop, produce, and distribute all POS materials. 2.99 Promotions Marketing Manage consumer and retailer promotions. 2.99 End of Games Audit Sales End-of-game reconciliation of Scratchers tickets for 2.98 inventory. Fixed Assets Finance and Capitalization and depreciation of assets. 2.95 Administration Background Processing Security Conduct background investigations, regulate 2.95 retailers, and monitor all administrative and criminal actions against Lottery retailers. Develop and Monitor Annual Finance and Prepare, evaluate, implement, administer, and control 2.92 Budgets Administration the Lottery’s budget and fiscal planning activities. Fixed Assets System Finance and Maintain fixed assets records. 2.91 Administration Distribution Centers- Sales Provide distribution and destruction services for 2.90 Sacramento & Rancho Lottery products (Scratchers, POS, and other Lottery Cucamonga material). Quality Management Information Conduct software acceptance testing for online and 2.88 Technology Scratchers games. Provide ongoing quality assurance Services testing for all gaming vendors and in-house Lottery application installs. Assist with monitoring services, including telecommunication services. Accounts Receivable System Finance and Support Accounts Receivable records. 2.86 Administration -9- California Lottery Revenue Collections Process Schedule 2 (continued) Composite Operations and Activities Division Description Score Accounts Payable System Finance and Support Accounts Payable records. 2.86 Administration General Ledger System Finance and Maintain General Ledger records. 2.86 Administration Key Accounts System Sales Maintain chain retailer accounts. 2.85 Financial Audit Contract Executive Provide financial audits services and agreed-upon 2.84 KMPG procedures. District Offices Sales Provide Lottery and/or retailer support in sales, 2.76 advertising, and security in nine district offices. Non-Retailer Accounts Finance and Maintain and monitor account receivable records for 2.75 Receivable Administration vendors and employees. Logical Access Security Control access to data maintained in computer files 2.73 and gaming systems (vendors). Television Syndication Marketing Manage syndication and distribution of broadcast 2.71 programs to television stations. Sales Inquiry System Sales Sales information database. 2.64 -10- California Lottery Revenue Collections Process Schedule 3— Medium Risk Activities and Operations As of June 30, 2007 Composite Operations and Activities Division Description Score Physical Access Security Maintain controls over physical access to facilities, 2.60 equipment, etc. Allocations System Finance and Allocate gaming expenses based on sales. 2.59 Administration Petty Cash Funds Finance and Maintain and monitor petty cash. 2.58 Administration Andres International Security Provide uniformed guard services. 2.58 Security Systems Reproduction Finance and Provide copying services for the Lottery. 2.55 Administration Salary Advance Finance and Process, maintain, and monitor salary advances. 2.49 Administration Legal Service Contracts Executive Monitor contracts that provide outside legal counsel 2.47 and services. Production Services Information Provide production support for all IBM application 2.46 Technology system jobs, balancing functions, and generation and Services distribution of daily activity reports. State Treasurer’s Office Finance and Monitor the interagency contract. Prepare 2.40 Contract Administration amendments and ensure timely payment to the contract. Trade Incentive Program Sales Administer and monitor retailer promotional 2.38 (TIP) programs. HSM Electronic Protection Security Provide maintenance, installation, and repair services 2.32 Services Inc. for Lottery’s security system. Change Management Information Provide for application and system software version 2.29 Technology control, maintain Job Control Language, maintain Services technical Library. Television Communication Corporate Com- Provide corporate audit, video, and other production 2.28 munications activities designed to meet communication needs. Server and Environmental Information Procure, install, maintain, and coordinate placement 2.27 System Maintenance Technology of all data center equipment. Services Local Area Network (LAN) Information Provide technical expertise to design and maintain 2.26 Technology the Lottery local area communications security. Services District Sales Representative Sales Track DSR activities for bonus. 2.24 Reporting Server Operations Information Support all server-based computer systems, utilities, 2.24 Technology and other server automated related systems. Services Processing Retailer Finance and Process retailer adjustments for both online and 2.21 Adjustments Administration Scratchers games. -11- California Lottery Revenue Collections Process Schedule 4— Medium-Low Risk Activities and Operations As of June 30, 2007 Composite Operations and Activities Division Description Score Operational Recovery Information Develop, test, and maintain the Disaster Recovery 2.14 Technology Plan for the Information Technology. Services Game Operations Executive Develop long-term product and distribution 2.12 strategies; create and oversee production of Scratcher and On-Line games. Scratcher Game Contract– Executive Produce and deliver standard Scratchers game tickets. 2.09 Scientific Games Interna- tional (exp. 06/30/09) Scratcher Game Contract– Executive Produce and deliver standard Scratchers games 2.09 Banknote, Limited tickets. (exp. 06/30/09) Fiscal System Analysis Finance and Application control and maintenance of fully 2.09 Administration integrated accounting system. Retailer Document Sales Establish, maintain, update, and purge all retailer 2.08 Processing master file records. Retailer Communications Sales Coordinate retailer communications and develop and 2.05 maintain retailer newsletter. Client Services Information Provide all desktop support for the Lottery 2.03 Technology workstation users. Support laptops used by the Services Lottery field staff with wireless connectivity to headquarters and all Lottery field offices. Internal Control System (ICS) Information Provide control and balancing functions for games. 2.02 Technology Services Retail Operations and Sales Sales Track installation of retailer vending machines. 1.98 Services Information Security Program Security Ensure compliance with all statutory and regulatory 1.98 requirements regarding the confidentiality and security of information. Invoice Center Sales Manage receipt of Scratchers ticket invoices from 1.94 retailers. Data Access Support Information Provide database management support for Lottery 1.87 Technology data files on various computer accounting and retailer Services management applications, and all IBM applications. Muse Communications Marketing Provide African American advertising. 1.81 Contract (exp. 01/31/10) EDI Process (Electronic Information Provide electronic transfer of data. 1.80 Data Interface) Technology Services Case Tracking System Security Database for cases investigated by Security. 1.73 -12- California Lottery Revenue Collections Process Schedule 4 (continued) Composite Operations and Activities Division Description Score Labor Relations Human Develop and maintain manager-labor relationships. 1.71 Resources Exception Questioned Claim Security Database for questioned tickets investigated by 1.63 System Security. Gaming and Voice Information Responsible for design, procurement, 1.63 Technology implementation, and problem isolation. Services Equal Employment Human Develop, implement, and monitor the EEO program. 1.59 Opportunity (EEO) Program Resources Selection Services Human Administer exams for the Lottery and recruit for 1.57 Resources vacancies. Training Human Oversee staff development and training. 1.53 Resources -13- California Lottery Revenue Collections Process Schedule 5— Low Risk Activities and Operations As of June 30, 2007 Composite Operations and Activities Division Description Score Recruitment Human Provide services related to the hiring and selection of 1.44 Resources new employees. Special Fiscal Projects Finance and Research and review of game accounting practices 1.42 Administration and fiscal issues related to Lottery’s financial condition. Customer Services Call Corporate Com- Provide information to members of the public who 1.35 Center munications call the 1-800 information line. Provide bilingual and TDD services. Project Management Information Provide support for a variety of administrative and 1.35 Technology information technology (IT) functions procurements Services and/or the potential application of IT. Section staff is focused excluding procurement. Reasonable Accommodation Human Implement and monitor ADA. 1.32 Resources Facilities Operations/ Human Maintain building and furniture inventory and 1.32 Property Unit Resources provide lease management services. Legal Services Executive Provide legal services to the Lottery. 1.30 Injured Workers Program Human Oversee worker’s compensation and Return to Work 1.27 Resources Program. Maintenance Human Provide maintenance services for Lottery facilities. 1.27 Resources Correspondence Services Corp Com Respond to all requests for written information from 1.25 the public. Employee Recognition Human Oversee development and implementation of 1.25 Resources employee recognition programs for the Lottery. Comparing Budget & Finance and Monitor expenditures against the budget and provide 1.23 Associated Expenditures Administration monthly reports. SAS 70 Executive Online gaming vendor. 1.20 Business/Strategic Planning Executive Plan corporate objectives for the annual and five year 1.20 strategic plans and identify strategies for achieving them. Department of Technology Information House all Lottery IBM applications within its data 1.19 Services (DTS) Technology center. Provide analysis, design, programming, Services testing, and implementation of IBM applications including claims, tax reporting, annuity, investments, sales information, etc. Legislation Executive Propose, draft, track, and testify for all legislative 1.16 bills involving or sponsored by the Lottery. Research Including Revenue Executive Provide objective information and analysis to 1.14 Forecasting management. -14- California Lottery Revenue Collections Process Schedule 5 (continued) Composite Operations and Activities Division Description Score Lottery Store Human Provide employees and “Big Spin” participants and 1.12 Resources outlet to purchase Lottery services. Health and Safety Human Develop and maintain health and safety and wellness 1.03 Resources programs. Contract Support Services Human Monitor, implement, and initiate all contracts, work 1.02 Resources requests, and purchases for technical/trade services for all buildings and grounds. Corporate Relations Executive Promote the Lottery’s overall corporate image. 1.00 Media/Public Information Executive Provide all government entities with information on 1.00 proactive and reactive basis. Community Relations Executive Develop and maintain the community relations and 1.00 Program outreach program, involving statewide education and business organizations. Janitorial Services Human Provide janitorial services. 1.00 Resources -15- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov S08-LOT-002