| (a) Definitions.
(1) Audit--The formal examination of a licensee's accounts,
records, and/or business activities by designated employees or representatives
of the Commission.
(2) Audit fieldwork--Includes, but is not limited to,
the physical inspection of bingo premises, the observation of a bingo
game, the inquiry of management and staff, the review of financial
accounts, records or business processes, the assessment of the adequacy
of any internal controls, or any other activity necessary to meet
audit objectives.
(3) Licensee--Includes any individual, partnership,
corporation, group, or entity licensed under the Bingo Enabling Act
and any group of licensed authorized organizations operating under
a unit agreement.
(b) Audit Determination.
(1) The purpose of an audit is to determine whether
a licensee is, has been, and/or will remain in compliance with the
Bingo Enabling Act and the Charitable Bingo Administrative Rules.
(2) Those licensees who are most at risk of violating
the Bingo Enabling Act or the Charitable Bingo Administrative Rules
will be identified for audit based on risk factors established by
the Commission. Risk factors may be based on, among other things,
a licensee's gross receipts, gross rentals, bingo expenses, net proceeds,
and/or charitable distributions. An audit must commence by the fourth
anniversary of the date a licensee is identified for audit.
(3) Notwithstanding paragraph (2) of this subsection,
the Commission may audit any licensee if the Commission reasonably
believes the licensee may violate, or may have violated, the Bingo
Enabling Act or the Charitable Bingo Administrative Rules.
(c) Notification.
(1) If a licensee is selected for an audit pursuant
to subsection (b) of this section, a Commission auditor will so notify
that licensees bingo chairperson, director, business contact, officer,
unit manager, or designated agent in writing. The written notification
constitutes the beginning of the audit.
(2) The written notification will identify the time
period to be audited and any records or other information that must
be made available for Commission review. Various forms, including
questionnaires and physical inventory requests, may be included with
the written notification. Licensees must complete any forms in the
manner, and in the time period, specified by the Commission.
(3) If the Commission does not receive a timely response
to its initial request for records, it will provide the licensee with
a second and final request to provide all records within ten (10)
calendar days. The Commission will not examine any records that are
sent after that deadline, and the licensee will be responsible for
any audit findings involving the absence of those records.
(d) Entrance Conference.
(1) Within ten (10) calendar days of sending the written
notification under subsection (c) of this section, an auditor will
attempt to contact the selected licensee's bingo chairperson, director,
business contact, officer, unit manager, or designated agent to schedule
an audit entrance conference. Unless otherwise provided by the Commission,
the audit entrance conference will be held within fourteen (14) calendar
days from the auditors contact with the licensee. The licensee may
submit a written request to the Commission to delay the audit entrance
conference. The written request must include the reasons for the requested
delay. After reviewing a properly submitted written request to delay,
the Commission may either approve or deny the request or notify the
licensee that additional information is needed before a decision is
made. If the Commission and licensee are unable to agree on the date,
time, and place of the audit entrance conference, or if the Commission
auditor is unable to contact the licensee's bingo chairperson, director,
business contact, officer, unit manager, or designated agent, the
auditor shall schedule the audit entrance conference and send the
licensee written notice of that fact at least ten (10) calendar days
prior to the scheduled audit entrance conference.
(2) The purpose of an audit entrance conference is
to allow the auditor(s) to meet with the selected licensee's bingo
chairperson, director, business contact, officer, unit manager, or
designated agent to collect any records or other information identified
in the written notification under subsection (c) of this section,
to discuss the audit process, and to answer any questions the licensee
may have regarding the audit. There is no standard timeline by which
an audit will be completed, but an audit must be completed within
one year from the date of the entrance conference unless the Director
extends the time period and notifies the licensee of the extension.
(3) The Commission may request the attendance at the
audit entrance conference of any person familiar with the licensee's
operations. In addition to any attendees requested by the Commission,
the licensee may allow any other individuals to attend the audit entrance
conference.
(e) Audit Fieldwork. Any time after the conclusion
of the audit entrance conference, the auditor(s) may initiate and
conduct the audit fieldwork at the licensee's business office, bingo
premises, bookkeeper's office, or accountant's office; or, a location
designated by the auditor(s). When conducting audit fieldwork, the
auditor(s), at their discretion, may use a detailed auditing procedure
or a sample and projection auditing method. A sample and projection
auditing method may include, but is not limited to, manual sampling
techniques, computer-assisted audit techniques, analytical procedures,
financial projections, and auditor recompilation from reliable independent
sources.
(f) Exit Conference.
(1) Any time after the completion of the audit fieldwork,
an auditor will attempt to contact the selected licensee's bingo chairperson,
director, business contact, officer, unit manager, or designated agent
to schedule an audit exit conference. If the auditor and licensee
are unable to agree on the date, time, and place of the audit exit
conference, or if the auditor is unable to contact the licensees bingo
chairperson, director, business contact, officer, unit manager, or
designated agent, the auditor shall schedule the audit exit conference
and send the licensee written notice of that fact at least ten (10)
calendar days prior to the scheduled audit exit conference.
(2) The purpose of an audit exit conference is to allow
the auditor(s) to meet with the selected licensee's bingo chairperson,
director, business contact, officer, unit manager, or designated agent
to discuss the results of the audit and the draft audit report.
(3) The Commission may request the attendance at the
audit exit conference of any person familiar with the licensee's operations.
In addition to any attendees requested by the Commission, the licensee
may allow any other individuals to attend the audit exit conference.
(g) Audit Report.
(1) Upon completion of the audit, the auditor(s) will
prepare a draft audit report containing their findings and conclusions.
A copy of the draft audit report will be provided to the licensee
at the audit exit conference. At least three (3) business days before
the audit exit conference, but only to the extent it is practicable,
the Commission will also send a copy of the draft audit report to
one e-mail address or facsimile number associated with the licensee.
The licensee must notify the Commission of the designated e-mail address
or facsimile number by the end of the audit entrance conference if
the licensee is to receive a copy of the draft audit report prior
to the audit exit conference.
(2) A licensee may, but is not required to, respond
to the draft audit report by providing written comments and any supporting
documentation to the auditor(s) within twenty (20) calendar days of
receiving the draft audit report. Written comments should include
a statement of agreement or disagreement with the draft audit report
findings and, if applicable, a list of any corrective measures that
will be taken to ensure compliance with the Bingo Enabling Act and
Charitable Bingo Administrative Rules. Any properly submitted comments
and supporting documents will be reviewed by the auditor(s) and placed
in the final audit report. The auditor(s) may revise the draft audit
report in response to any properly submitted comments or supporting
documents.
(3) Any time after the twenty (20) calendar day deadline,
the auditor(s) may issue the final audit report. A copy of the report
will be provided to the licensee.
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