Minimum Internal Control Standards, 11793-11795 [2013-03669]

Agencies

• DEPARTMENT OF THE INTERIOR
• National Indian Gaming Commission

[Federal Register Volume 78, Number 34 (Wednesday, February 20, 2013)]
[Proposed Rules]
[Pages 11793-11795]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03669]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 543

RIN 3141-AA27


Minimum Internal Control Standards

AGENCY: National Indian Gaming Commission.

ACTION: Proposed rule.

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SUMMARY: The National Indian Gaming Commission (NIGC) proposes to amend 
its minimum internal control standards for Class II gaming under the 
Indian Gaming Regulatory Act to add standards for the drop and count 
and surveillance of kiosks.

DATES: Submit comments on or before April 22, 2013.

ADDRESSES: You may submit comments by any one of the following methods, 
however, please note that comments sent by electronic mail are strongly 
encouraged.
    [ssquf] Email comments to: reg.review@nigc.gov.
    [ssquf] Mail comments to: National Indian Gaming Commission, 1441 L 
Street NW., Suite 9100, Washington, DC 20005.
    [ssquf] Hand deliver comments to: 1441 L Street NW., Suite 9100, 
Washington, DC 20005.
    [ssquf] Fax comments to: National Indian Gaming Commission at 202-
632-0045.

FOR FURTHER INFORMATION CONTACT: National Indian Gaming Commission, 
1441 L Street NW., Suite 9100, Washington, DC 20005. Telephone: 202-
632-7009; email: reg.review@nigc.gov.

SUPPLEMENTARY INFORMATION: 

I. Comments Invited

    Interested parties are invited to participate in this proposed 
rulemaking by submitting such written data, views, or arguments as they 
may desire. Comments that provide the factual basis supporting the 
views and suggestions presented are particularly helpful in developing 
reasoned regulatory decisions on the proposal.

II. Background

    The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The 
Act establishes the National Indian Gaming Commission (``NIGC'' or 
``Commission'') and sets out a comprehensive framework for the 
regulation of gaming on Indian lands. On January 5, 1999, the NIGC 
published a final rule in the Federal Register called Minimum Internal 
Control Standards. 64 FR 590. The rule added a new part to the 
Commission's regulations establishing Minimum Internal Control 
Standards (MICS) to reduce the risk of loss because of customer or 
employee access to cash and cash equivalents within a casino. The rule 
contains standards and procedures that govern cash handling, 
documentation, game integrity, auditing, surveillance, and variances, 
as well as other areas.
    The Commission recognized from their inception that the MICS would 
require periodic review and updates to keep pace with technology, and 
has amended them numerous times, most recently on September 21, 2012. 
77 FR 58708.

III. Development of the Proposed Rule

    On September 21, 2012, the Commission concluded nearly two years of 
consultation with the publication of comprehensive amendments, 
additions, and updates to Part 543, the minimum internal control 
standards (MICS) for Class II gaming operations. The regulations 
require tribes to establish controls and implement procedures at least 
as stringent as those described in this part to maintain the integrity 
of the gaming operation and minimize the risk of theft.
    One of the 2012 additions was the inclusion of kiosks, devices 
capable of redeeming vouchers or and/or wagering credits or initiating 
transfers from a patron deposit account. The regulation provided 
general standards for kiosks, but upon further review, additional 
standards are needed for the drop and count and surveillance of kiosks 
to adequately protect against risk of loss.

Regulatory Matters

Regulatory Flexibility Act
    The proposed rule will not have a significant impact on a 
substantial number of small entities as defined under the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq. Moreover, Indian Tribes are not 
considered to be small entities for the purposes of the Regulatory 
Flexibility Act.
Small Business Regulatory Enforcement Fairness Act
    The proposed rule is not a major rule under 5 U.S.C. 804(2), the 
Small Business Regulatory Enforcement Fairness Act. The rule does not 
have an effect on the economy of $100 million or more. The rule will 
not cause a major increase in costs or prices for consumers, individual 
industries, Federal, State, local government agencies or geographic 
regions, nor will the proposed rule have a significant adverse effect 
on competition, employment, investment, productivity, innovation, or 
the ability of the enterprises, to compete with foreign based 
enterprises.
Unfunded Mandate Reform Act
    The Commission, as an independent regulatory agency, is exempt from 
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2 
U.S.C. 658(1).
Takings
    In accordance with Executive Order 12630, the Commission has 
determined that the proposed rule does not have significant takings 
implications. A takings implication assessment is not required.
Civil Justice Reform
    In accordance with Executive Order 12988, the Commission has 
determined that the proposed rule does not unduly burden the judicial 
system and meets the requirements of sections 3(a) and 3(b)(2) of the 
Order.
National Environmental Policy Act
    The Commission has determined that the proposed rule does not 
constitute a major federal action significantly affecting the quality 
of the human environment and that no detailed statement is required 
pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 
4321, et seq.
Paperwork Reduction Act
    The information collection requirements contained in this rule were 
previously approved by the Office of Management and Budget as required 
by 44 U.S.C. 3501, et seq., and assigned OMB Control Number 3141-0009. 
The OMB control number expires on October 31, 2015.

[[Page 11794]]

Text of the Proposed Rules

List of Subjects in 25 CFR Part 543

    Gambling, Indian--Indian lands, Indian--tribal government.

    For the reasons discussed in the Preamble, the Commission proposes 
the text of its regulations at 25 CFR part 543 to be amended as 
follows:

PART 543--MINIMUM INTERNAL CONTROL STANDARDS FOR CLASS II GAMING

0
1. The authority citation for part 543 continues to read as follows:

    Authority: 25 U.S.C. Sec. Sec.  2702(2), 2706(b)(1-4), 
2706(b)(10).

0
2. Amend Sec.  543.2 by adding a definition for currency cassette in 
alphabetical order to read as follows:


Sec.  543.2  What are the definitions for this part?

* * * * *
    Currency cassette. A locked compartment that contains a specified 
denomination of currency. Currency cassettes are inserted into kiosks, 
allowing them to dispense currency.
* * * * *
0
3. Amend Sec.  543.17 by revising paragraphs (h) and (i) and adding 
paragraphs (j) and (k) to read as follows:


Sec.  543.17  What are the minimum internal control standards for drop 
and count?

* * * * *
    (h) Kiosk drop, count, and fill standards. Controls must be 
established and procedures implemented to ensure security of the kiosk 
drop and count processes. Such controls must include the following:
    (1) Surveillance must be notified when the drop process is to begin 
so that surveillance may monitor the activities.
    (2) At least three agents must be involved in the drop process and 
at least one agent should be independent of kiosk accountability.
    (3) Currency cassettes and financial instrument storage components 
must be dropped and secured in a manner that restricts access to only 
authorized agents.
    (4) Any time the financial instrument storage components or 
currency cassettes are accessed, and prior to any transactions being 
processed through the kiosk, an agent independent of the count must run 
a kiosk report.
    (i) The report must reflect the following:
    (A) Date and time;
    (B) Unique asset identification number of the kiosk;
    (C) Unique identification number for each financial instrument 
storage component in the kiosk;
    (D) Total amount of currency dispensed;
    (E) Total number of bills dispensed by denomination;
    (F) Total dollar amount of vouchers accepted;
    (G) Total number of vouchers accepted.
    (ii) The report may not be viewed by any member of the count team 
and must be immediately forwarded to accounting or placed in a secure 
storage area where it is not accessible by the count team.
    (5) Redeemed vouchers and pulltabs (if applicable) collected from 
the drop must be secured and delivered to the appropriate department 
(cage or accounting) for reconciliation.
    (6) After completing a fill and prior to the first transaction, the 
team must test the machine to verify that currency cassettes contain 
the correct denominations and have been properly installed.
    (i) Kiosk count standards.
    (1) Access to stored full kiosk financial instrument storage 
components and currency cassettes must be restricted to:
    (i) Authorized members of the drop and count teams; and
    (ii) In an emergency, authorized persons for the resolution of a 
problem.
    (2) The kiosk count must be performed in a count room or other 
equivalently secure area with comparable controls.
    (3) Access to the count room during the count must be restricted to 
members of the drop and count teams, with the exception of authorized 
observers, supervisors for resolution of problems, and authorized 
maintenance personnel.
    (4) If counts from various revenue centers and kiosks occur 
simultaneously in the count room, procedures must be in effect that 
prevent the commingling of funds from the kiosks with any revenue 
centers.
    (5) The count team must not have access to the reconciliation 
report amounts until after the count is completed and the drop proceeds 
are accepted into the cage/vault accountability.
    (6) Count equipment and systems must be tested, and the results 
documented, before the first count begins, to ensure the accuracy of 
the equipment.
    (7) If a currency counter interface is used:
    (i) It must be adequately restricted to prevent unauthorized 
access; and
    (ii) The currency drop figures must be transferred via direct 
communications line or computer storage media to the accounting 
department.
    (8) The kiosk financial instrument storage components and currency 
cassettes must be individually emptied and counted so as to prevent the 
commingling of funds between kiosks until the count of the kiosk 
contents has been recorded.
    (i) The count of each kiosk must be recorded in ink or other 
permanent form of recordation.
    (ii) Coupons or other promotional items not included in gross 
revenue (if any) may be recorded on a supplemental document by the 
count team members or accounting personnel. All single-use coupons must 
be cancelled daily by an authorized agent to prevent improper 
recirculation.
    (9) If currency counters are utilized, a count team member must 
observe the loading and unloading of all currency at the currency 
counter, including rejected currency.
    (10) Two counts of the currency rejected by the currency counter 
must be recorded per kiosk as well as in total. Rejected currency must 
be posted to the kiosk from which it was collected.
    (11) Financial instrument storage components and currency 
cassettes, when empty, must be shown to another member of the count 
team, to another agent who is observing the count, or to surveillance, 
provided that the count is monitored in its entirety by an agent 
independent of the count.
    (12) Procedures must be implemented to ensure that any corrections 
to the count documentation are permanent, identifiable, and the 
original, corrected information remains legible. Corrections must be 
verified by two count team agents.
    (13) The count sheet must be reconciled to the total drop by a 
count team member who may not function as the sole recorder, and 
variances must be reconciled and documented.
    (14) All count team agents must sign the report attesting to their 
participation in the count.
    (15) A final verification of the total drop proceeds, before 
transfer to cage/vault, must be performed by at least two agents, one 
of whom is a supervisory count team member and the other a count team 
agent.
    (i) Final verification must include a comparison of currency 
counted totals against the currency counter/system report (not the 
report generated by the kiosk), if a counter/system is used.
    (ii) Any unresolved variances must be documented and the 
documentation must remain a part of the final count record forwarded to 
accounting.

[[Page 11795]]

    (iii) This verification does not require a complete recount of the 
drop proceeds but does require a review sufficient to verify the total 
drop proceeds being transferred.
    (iv) The two agents must sign the report attesting to the accuracy 
of the total drop proceeds verified.
    (v) All drop proceeds and cash equivalents that were counted must 
be turned over to the cage or vault cashier (who must be independent of 
the count team) or to an agent independent of the revenue generation 
and the count process for verification. Such cashier or agent must 
certify, by signature, the amount of the drop proceeds delivered and 
received. Any unresolved variances must be reconciled, documented, and/
or investigated by accounting/revenue audit.
    (16) After certification by the agent receiving the funds, the drop 
proceeds must be transferred to the cage/vault.
    (i) The count documentation and records must not be transferred to 
the cage/vault with the drop proceeds.
    (ii) The cage/vault agent must not have knowledge or record of the 
drop proceeds total before it is verified.
    (iii) All count records must be forwarded to accounting secured and 
accessible only by accounting agents.
    (iv) The cage/vault agent receiving the transferred drop proceeds 
must sign the count sheet attesting to the verification of the total 
received, and thereby assuming accountability of the drop proceeds, and 
ending the count.
    (v) Any unresolved variances between total drop proceeds recorded 
on the count room report and the cage/vault final verification during 
transfer must be documented and investigated.
    (17) The count sheet, with all supporting documents, must be 
delivered to the accounting department by a count team member or agent 
independent of the cashiers department. Alternatively, it may be 
adequately secured and accessible only by accounting department.
    (j) Controlled keys. Controls must be established and procedures 
implemented to safeguard the use, access, and security of keys in 
accordance with the following:
    (1) Each of the following requires a separate and unique key lock 
or alternative secure access method:
    (i) Drop or player interface cabinet;
    (ii) Drop box or financial instrument storage component release;
    (iii) Drop box or financial instrument storage component contents; 
and
    (iv) Storage racks and carts.
    (v) Kiosk currency cassettes
    (k) Variances. The operation must establish, as approved by the 
TGRA, the threshold level at which a variance must be reviewed to 
determine the cause. Any such review must be documented.

0
4. Amend Sec.  543.21 by adding paragraph(c)(6) to read as follows:


Sec.  543.21  What are the minimum internal control standards for 
surveillance?

* * * * *
    (c) * * *
    (6) Kiosks: The surveillance system must monitor and record a 
general overview of activities occurring at each kiosk with sufficient 
clarity to identify the activity and the individuals performing it, 
including maintenance, drops or fills, and redemption of wagering 
vouchers or credits.
* * * * *

Tracie L. Stevens,
Chairwoman.
Daniel J. Little,
Associate Commissioner.
[FR Doc. 2013-03669 Filed 2-19-13; 8:45 am]
BILLING CODE 7565-01-P