Current through Register Vol. 43, No. 39, September 26, 2024
(a) The following words and terms, when used
in this article, shall have the following meanings unless the context indicates
otherwise:
(1) "Accounting department" means a
facility manager's internal department that is responsible for the management
of the financial and accounting activities relating to electronic gaming
machines being utilized on an approved gaming floor.
(2) "Asset number" means a unique number
assigned to an electronic gaming machine by a facility manager for the purpose
of tracking the electronic gaming machine.
(3) "Bill validator" means an electronic
device designed to interface with an electronic gaming machine for the purpose
of accepting and validating any combination of United States currency, gaming
tickets, coupons, or other instruments authorized by the commission for
incrementing credits on an electronic gaming machine.
(4) "Bill validator canister" means a
mechanical or electronic device designed to interface with an electronic gaming
machine for the purpose of storing any combination of United States currency,
gaming tickets, coupons, or other instruments authorized by the commission for
recording credits on an electronic gaming machine.
(5) "Blind count" means the counting of
currency or gaming chips by a person who does not know the inventory
balance.
(6) "Cash equivalents"
means instruments with a value equal to United States currency or coin,
including certified checks, cashier's checks, traveler's checks, money orders,
gaming tickets, and coupons.
(7)
"Cashier's booth" means an area from which a cashier conducts transactions
associated with gaming cashiers or window cashiers.
(8) "Change person" means a person who
exchanges coins, currency, and coupons with patrons.
(9) "Complimentary" means any lodging,
service, or item that is provided directly or indirectly to an individual at no
cost or at a reduced cost and that is not generally available to the public.
This term shall include lodging provided to a person at a reduced price due to
the anticipated or actual gaming activities of that person. Group rates,
including convention and government rates, shall be deemed generally available
to the public.
(10) "Count room"
means a room secured by keys controlled by two separate facility manager
departments with limited access, where the contents, including currency, gaming
tickets, and coupons, of bill validator canisters are counted by the count
team.
(11) "Currency counters"
means a device that counts currency and tickets.
(12) "Critical program storage media" and
"CPSM" mean any media storage device that contains data, files, or programs and
is determined by the commission to be capable of affecting the integrity of
gaming.
(13) "Drop" means the total
amount of money, tickets, and coupons removed from any lottery facility game or
kiosk.
(14) "Drop team" means the
group of employees of a facility manager who participate in the transportation
of the drop.
(15) "EGM" means
electronic gaming machine.
(16)
"Gaming day" means a period not to exceed 24 hours corresponding to the
beginning and ending times of gaming activities for the purpose of accounting
reports and determination by the central computer system of net lottery
facility game income.
(17)
"Generally accepted accounting principles" and "GAAP" have the meaning
specified in K.A.R. 74-5-2.
(18)
"Imprest" means the basis on which the operating funds of general cashiers and
gaming cashiers are maintained. The opening and closing values shall be equal,
and any difference shall result in a variance. The funds may be replenished as
needed in exactly the value of the net of expenditures made from the funds for
value received.
(19) "Incompatible
functions" means functions or duties that place any person or department in a
position to perpetuate and conceal errors, fraudulent or otherwise.
(20) "LFG" means lottery facility
game.
(21) "Main bank" means the
central location in the gaming facility where acts that include the following
are performed:
(A) Transactions for recording
currency, coin, tokens, cash equivalents, and negotiable instruments;
(B) preparation of bank deposits;
(C) acceptance of currency from the count
room; and
(D) reconciliation of all
cage transactions.
(22)
"Trolley" means a wheeled apparatus used for the secured transport of
electronic gaming cash storage boxes and drop boxes.
(23) "Unclaimed winnings" means gaming
winnings that are held by the facility manager as a liability to a patron until
that patron is paid.
(24)
"Unredeemed ticket" means a ticket issued from an LFG containing value in U.S.
dollars that has not been presented for payment or accepted by a bill acceptor
at a gaming machine and has not been marked as paid in the ticket
file.
(25) "Weigh scale" means a
scale that is used to weigh coins and tokens and that converts the weight to
dollar values in the count process.
(b) Each applicant for a facility manager
certificate shall submit to the commission and the Kansas lottery a written
plan of the applicant's initial system of administrative and accounting
procedures, including its internal controls and audit protocols, at least 180
days before opening a gaming facility, unless the executive director finds good
cause for a shorter deadline. This plan shall be called the internal control
system and shall include the following:
(1)
Organization charts depicting segregation of functions and
responsibilities;
(2) a description
of the duties and responsibilities of each licensed or permitted position shown
on the organization charts and the lines of authority;
(3) a detailed narrative description of the
administrative and accounting procedures designed to satisfy the requirements
of this article;
(4) a record
retention policy in accordance with K.A.R. 112-104-8;
(5) procedures to ensure that assets are
safeguarded and counted in conformance with effective count
procedures;
(6) the following
controls and procedures:
(A) Administrative
controls that include the procedures and records that relate to the decision
making processes leading to management's authorization of
transactions;
(B) accounting
controls that have as their primary objectives the safeguarding of assets and
revenues and the reliability of financial records. The accounting controls
shall be designed to provide reasonable assurance that all of the following
conditions are met:
(i) The transactions or
financial events that occur in the operation of an LFG are executed in
accordance with management's general and specific authorization;
(ii) the transactions or financial events
that occur in the operation of an LFG are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles, the act, and this article;
(iii) the transactions or financial events
that occur in the operation of an LFG are recorded in a manner that provides
reliable records, accounts and reports, including the recording of cash and
evidence of indebtedness, for use in the preparation of reports to the
commission related to LFGs;
(iv)
the transactions or financial events that occur in the operation of an LFG are
recorded to permit proper and timely reporting and calculation of net LFG
income and fees to maintain accountability for assets;
(v) access to assets is permitted only in
accordance with management's general and specific authorization; and
(vi) the recorded accountability for assets
is compared with existing physical assets at reasonable intervals, and
appropriate action is taken with respect to any discrepancies;
(C) procedures and controls for
ensuring that all functions, duties, and responsibilities are segregated and
performed in accordance with legitimate financial practices by trained
personnel;
(D) procedures and
controls for ensuring all applicable technical standards as adopted by the
commission under article 110 are followed;
(7) a completed internal control checklist;
and
(8) any other items that the
commission may require to be included in the internal controls.
(c) The internal control system
shall be accompanied by the following:
(1) An
attestation by the chief executive officer or other competent person with a
direct reporting relationship to the chief executive officer attesting that the
officer believes in good faith that the submitted internal controls conform to
the requirements of the act and this article; and
(2) an attestation by the chief financial
officer or other competent person with a direct reporting relationship to the
chief financial officer attesting that the officer believes in good faith that
the submitted internal controls are designed to provide reasonable assurance
that the financial reporting conforms to generally accepted accounting
principles and complies with all applicable laws and regulations, including the
act and this article.
(d) Each internal control system shall be
reviewed by the commission in consultation with the Kansas lottery to determine
whether the system conforms to the requirements of the act and this article and
provides adequate and effective controls to ensure the integrity of the
operation of LFGs at a gaming facility. If the commission determines that the
system is deficient, a written notice of the deficiency shall be provided by
the executive director to the applicant or facility manager. The applicant or
facility manager shall be allowed to submit a revision to its submission. Each
facility manager shall be prohibited from commencing gaming operations until
its internal control system is approved by the commission.
(e) If a facility manager intends to update,
change, or amend its internal control system, the facility manager shall submit
to the commission for approval and to the Kansas lottery a written description
of the change or amendment and the two original, signed certifications
described in subsection (c).
(f) A
current version of the internal control system of a facility manager shall be
maintained in or made available in electronic form through secure computer
access to the accounting and surveillance departments of the facility manager
and the commission's on-site facilities. The facility manager shall also
maintain a copy, in either paper or electronic form, of any superseded internal
control procedures, along with the two certifications required to be submitted
with these procedures, for at least seven years. Each page of the internal
control system shall indicate the date on which the page was approved by the
commission.
