Current through Register Vol. 43, No. 39, September 26, 2024
(a) Each facility
manager's internal control system shall include organization charts depicting
the segregation of functions and the responsibilities and descriptions of the
duties and responsibilities for each position shown. Each facility manager
shall be permitted, except as otherwise provided in this regulation, to tailor
organizational structures to meet the needs or policies of a particular
management philosophy. Each facility manager's organization charts shall
provide for the following:
(1) A system of
personnel and chain of command that permits management and supervisory
personnel to be held accountable for actions or omissions within their areas of
responsibility;
(2) the
segregation of incompatible functions, duties, and responsibilities so that no
employee is in a position both to commit an error or perpetrate a fraud and to
conceal the error or fraud in the normal course of the employee's duties;
(3) the performance of all
functions, duties, and responsibilities in accordance with legitimate financial
practices by trained personnel;
(4) the areas of responsibility that are not
so extensive as to be impractical for one person to monitor; and
(5) a chief executive officer. For the
purposes of this article, a "chief executive officer" shall mean the person
located at the gaming facility who is ultimately responsible for the daily
conduct of the facility manager's business regardless of the particular title
that person actually holds. Unless otherwise specified in these regulations,
each supervisor of a department required by subsection (b) shall report
directly to the chief executive officer of the facility manager regarding
administrative matters and daily operations. The facility manager's
organization charts shall designate which positions, in the absence of the
chief executive officer, shall be designated as having responsibility for the
daily conduct of the facility manager's gaming business.
(b) Each facility manager's internal control
system shall also include the following departments and supervisory positions,
each of which shall be categorized as mandatory and shall cooperate with, yet
perform independently of, other mandatory departments and supervisory positions
of the facility manager. However, a department or supervisor of a facility
manager that is not required or authorized by this subsection may operate under
or in conjunction with a mandatory department or supervisor if the
organizational structure is consistent with the requirements of the act and
subsection (a). The mandatory departments and supervisory positions shall be
the following:
(1) A surveillance department
supervised by a person located at the gaming facility who functions, for
regulatory purposes, as the director of surveillance;
(2) an internal audit department supervised
by a person located at the gaming facility who functions, for regulatory
purposes, as the director of internal audit:
(A) The director of internal audit department
shall report directly to one of the following persons or entities regarding
matters of policy, purpose, responsibility, and authority, which persons or
entities shall also control the hiring, termination, and salary of the
position:
(i) The independent audit committee
of the facility manager's board of directors;
(ii) the independent audit committee of the
board of directors of any holding or intermediary company of the facility
manager that has authority to direct the operations of the facility manager;
(iii) the internal audit
executives of any holding or intermediate company if the most senior executive
in the reporting line reports directly to the independent audit committee of
the board of directors of the holding or intermediary company; or
(iv) for facility managers or holding
companies that are not corporate entities, the noncorporate equivalent of any
of the persons or entities listed in paragraphs (b)(2)(A)(i) through (iii) as
approved by the commission; and
(B) the internal audit department shall
operate under all of the provisions contained under K.A.R. 112-104-24;
(3) a management
information systems (MIS) department supervised by a person located at the
gaming facility who functions, for regulatory purposes, as the MIS director;
(4) an EGM department supervised
by a person located at the gaming facility who functions, for regulatory
purposes, as the EGM director;
(5)
a security department supervised by a person located at the gaming facility who
functions, for regulatory purposes, as the director of gaming facility
security;
(6) an accounting
department supervised by a person located at the gaming facility who functions
as the controller, for regulatory purposes:
(A) The controller shall be responsible for
all accounting functions, including the preparation and control of books,
records, and data, the control of stored data, the control of unused forms, the
accounting for and comparison of operational data and forms; and
(B) the facility manager shall have in its
accounting department at least one individual responsible for and dedicated to
verifying financial transactions and reviewing accounting forms and data. This
function, which is sometimes referred to as "income or revenue reconciliation,"
shall be independent of the transactions under review. This function shall
include a daily reconciliation of EGM transactions documentation, a daily
reconciliation of the parimutuel transaction documentation, a daily
reconciliation of the facility manager cage accountability, document control,
and signature verification; and
(7) a cashier's cage department supervised by
a person located at the gaming facility who functions as the treasurer, for
regulatory purposes:
(A) The treasurer shall
be responsible for the control and supervision of the cashier's cage, satellite
cages, count room, and vault. The cashier's cage may be separated into
independent operations or satellite cages to facilitate operations and
accountability;
(B) the cashier's
cage department shall be responsible for the following:
(i) The custody and accountability of coin,
currency, negotiable instruments, documents, and records normally associated
with the operation of a cage;
(ii)
any other functions normally associated with the operation of a cage;
(iii) the count room; and
(iv) the vault; and
(C) the cage department shall be
responsible for the control and supervision of gaming cashiers and change
persons.
(d)
The facility manager's personnel shall be trained in all policies, procedures,
and internal controls relevant to each employee's individual function. The
facility manager shall develop special instructional programs in addition to
any on-the-job instruction sufficient to make each member of the department
knowledgeable about the requirements and performance of all transactions
relating to that employee's functions.
(e) Notwithstanding other provisions to the
contrary, a facility manager may designate and assign more than one person to
serve jointly as the supervisor of a department required by this regulation.
Each person approved to serve as a joint supervisor of a mandatory department
shall be located at the gaming facility and shall be individually and jointly
accountable for the functioning of that department.
(f) If a vacancy in the chief executive
officer position or any mandatory department supervisory position required by
subsection (b) occurs, all of the following requirements shall apply:
(1) The facility manager shall notify the
commission within five days from the date of vacancy. The notice shall be
submitted in writing and shall indicate the following information:
(A) The vacant position;
(B) the date on which the position will
become or became vacant; and
(C)
the date on which the facility manager anticipates that the vacancy will be
filled on a permanent basis.
(2) The facility manager shall designate a
person to assume the duties and responsibilities of the vacant position within
30 days after the date of vacancy. The person may assume the duties and
responsibilities of the vacant position on a temporary basis if both of the
following conditions are met:
(A) The person
does not also function as the department supervisor for any other mandatory
department required by this regulation.
(B) The person's areas of responsibility will
not be so extensive as to be impractical for one person to monitor.
(3) Within five days of filling a
vacancy under paragraph (f)(2), the facility manager shall notify the
commission. The notice shall be submitted in writing and shall indicate the
following:
(A) The position;
(B) the name of the person designated;
(C) the date that the vacancy was
filled; and
(D) an indication of
whether the position has been filled on a temporary or permanent basis.
(4) The notices
required in this subsection shall be directed to the executive director.
