We are happy to report that the performance audit of the Lottery by the Auditor of State is concluded. And we are delighted to report that it finds what we knew all along … we work hard to maximize our profits to the Lottery Profits Education Fund, and we are proud of how we do that. Here’s the press release we sent to the media:
Performance Audit Concludes Ohio Lottery Performed Well
More than eight months after a performance audit of the Ohio Lottery Commission was begun, it was released to the public by the Auditor of State’s office on Tuesday. The audit concluded, “Overall, the Lottery has performed well and has generated significant revenue for the State through its game sales.” In fact, the Auditor reported that the Lottery met or exceeded its budgeted transfer obligations for public education during the period reviewed.
The Auditor also found “the OLC’s performance and management practices to be consistent with other U.S. lotteries.”
The recent close of the Lottery’s fiscal year 2010 bears these findings out. The Lottery enjoyed record sales of $2.48 billion and a $728.6 million transfer to the Lottery Profits Education Fund, the second-highest transfer in its 36-year history. It also marked the Lottery’s ninth consecutive year of sales growth. In the agency’s formal response to the Auditor of State, Lottery Director Kathleen Burke said, “the Ohio Lottery’s outstanding performance has been made possible by the support of our players, retailers, employees and vendors. The Lottery’s success is also due to the support we have received from the Governor and the Legislature, our Commission and our positive working relationships with other State agencies.”
About the audit, Burke said, “Lottery employees work hard every day with integrity and commitment. We appreciate Auditor Taylor’s conclusion that the Ohio Lottery is performing well and that the agency is meeting or exceeding its budget obligation to Ohio schools.”
The auditor’s report contained a section of notable accomplishments, among them last summer’s gaming system conversion, which the Auditor called “a model of success”; the Lottery’s process of evaluating its vendor contracts every six months, which the Auditor said “allows the OLC to maximize the effectiveness of its resources by targeting them toward vendors who perform in accordance with the contract deliverables and in a manner consistent with OLC’s expectations”; and a very high rate of employee engagement in the agency’s mission – according to a survey of the Lottery’s employees administered by the Auditor of State, 93% of Lottery employees reported understanding how their roles contribute to the success of the agency.
While Lottery profits have increased this year by $26.3 million, the auditor did make several recommendations for additional efficiencies, including the creation of an overall strategic plan, which the Lottery had already begun during the audit period; the elimination of approximately 32 jobs to save about $2.1 million; and the suggestion of turning the organization into a quasi-public corporation, which would largely remove the Lottery from Legislative oversight.
In her response letter, Burke said, “the Lottery takes seriously its mission to maximize profit transfers to the LPEF while conducting our games and our overall business operations with utmost integrity. We will carefully review (the Auditor’s) findings and recommendations with a view towards taking appropriate responsive measures.”