1. (a) Each charitable organization shall develop, implement, and adhere to written internal control policies and procedures designed to ensure effective control over the gaming operation by discouraging and protecting against illicit behavior and safeguarding the integrity of the games, which ensure that:

   1. (1) Assets are safeguarded;
   2. (2) Financial records are accurate, reliable, and permit proper reporting of gaming revenue, fees, and taxes;
   3. (3) Functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound business practice by competent, qualified personnel, with no individual in a position that would allow them to perpetuate and conceal errors or irregularities in the normal course of duties;
   4. (4) The integrity of the game is preserved by preventing unauthorized access, misappropriation, forgery, theft, or fraud;
   5. (5) Controls that have been put in place are effective, and any abnormalities are investigated and addressed;
   6. (6) Transactions are performed only in accordance with management’s general or specific authorization;
   7. (7) Transactions are recorded adequately to permit proper reporting of gaming revenue and of fees and taxes due, and to maintain accountability for assets;
   8. (8) Recorded accountability for assets is compared with actual assets on a monthly basis, and appropriate action is taken with respect to any discrepancies; and
   9. (9) Accountability for assets is maintained in accordance with generally accepted accounting principles.

2. (b) The internal controls required by (a) above shall include a minimum of the following:

   1. (1) Controls relative to the segregation of duties such that no one person or group within the organization has complete control over a business process or multiple steps within that process;
   2. (2) Controls relative to the access to bingo papers, including maintaining bingo papers in a secure location, and restricting accessible to authorized individuals only;

   3. (3) Controls relative to bingo paper inventory to assure that bingo inventory can be accounted for, and shall include a minimum of the following:

      1. a. Assigning the control of bingo paper inventories to individuals such that:

         1. 1. The individual in control of the perpetual inventory is independent of the monthly physical inventory and bingo paper sales; and
         2. 2. The individual in control of the monthly physical inventory is independent of the perpetual inventory and bingo paper sales;
      2. b. Maintaining a perpetual inventory control log that tracks bingo cards from receipt until use or permanent removal from inventory;

      3. c. Maintaining records relative to the issuance and return of bingo card inventory, including the requirement that such records be signed by the issuer and recipient under the following events:

         1. 1. Issuance of inventory from storage to a staging area;
         2. 2. Issuance of inventory from a staging area to the sellers;
         3. 3. Return of inventory from a staging area to storage; and
         4. 4. Return of inventory from the seller to the staging area or storage;
      4. d. Conducting monthly physical inventory counts to ensure that bingo card inventory can be accounted, and bingo cards have not been marked, altered, or otherwise manipulated; and

      5. e. Implementing a monthly process by which a person or persons independent of bingo sales and inventory control:

         1. 1. Reconciles the ending balance of the perpetual inventory to the physical inventories to ensure that no inventory is missing; and
         2. 2. Investigates and resolves all discrepancies discovered by the monthly reconciliation;

   4. (4) Controls relative to bingo paper sales, including:

      1. a. Documenting and maintaining records that adequately record, track, and reconcile all bingo cards sales and voids, including a minimum of the following:

         1. 1. The date(s) the bingo papers were sold or voided;
         2. 2. The total number of bingo cards issued, sold, and returned;
         3. 3. The dollar amount of bingo card sales;
         4. 4. The signature, initials, or other identifier of the individual preparing the record; and
         5. 5. Signature, initials, or other identifier of an independent agent who verified the bingo cards returned to inventory and the dollar amount of bingo card sales;
      2. b. Requiring that the total sales of all bingo paper sales are verified by an authorized individual independent of the bingo paper sales being verified; and
      3. c. Restricting access to the bingo paper sales records to authorized individuals;
   5. (5) Controls relative to ensuring that the equipment used in the conduct of the bingo event are in good working order as required by Lot 7005.01; and

   6. (6) Controls relative to payouts of winning bingo cards, including:

      1. a. Ensuring that an individual who sell bingo cards are not the sole verifier of bingo cards for prize payouts;
      2. b. Requiring that all prize payouts of $500 or more are documented and verified by at least 2 authorized individuals; and
      3. c. Recording, tracking, and reconciling all redeemed bingo papers and payouts.

Source. #14138, eff 11-27-24, EXPIRES: 11-27-34