Audit of the Massachusetts State Lottery Commission

This is a follow-up performance audit of the Massachusetts State Lottery Commission covering April 5, 2019 through March 31, 2020.

“I am pleased to provide this performance audit of the Massachusetts State Lottery Commission.”

Auditors checked whether the Lottery fixed issues found in an earlier audit, especially around background checks, terminated agents’ tickets, and whether employees or household family members claimed prizes.

“The purpose of this follow-up audit was to determine whether MSLC had effectively resolved the issues OSA identified during our previous audit No. 2013-0089-3S, which covered the period July 1, 2010 through September 30, 2012.”

These controls matter because gaps could let risky agents stay active, leave tickets or money unaccounted for, or miss prohibited prize claims.

“Therefore, current agents may have criminal records of which MSLC is unaware.”

Lottery money helps fund Massachusetts cities and towns, so ordinary residents have an interest in the Lottery being well controlled and fair.

“In fiscal year 2019, MSLC generated revenue of $5.509 billion and returned $1.104 billion in net profit to the Commonwealth to support its 351 cities and towns.”

The Lottery had procedures, but the audit found they were not always followed or effective enough during the audit period.

“Below is a list of our audit objectives, indicating each question we intended our audit to answer, the conclusion we reached regarding each objective, and where each objective is discussed in the audit findings.”

The auditor recommended that the Lottery keep clearing the background-check backlog, improve reconciliation procedures, investigate possible prize-claim conflicts, and enter claimant addresses accurately.

“MSLC should continue to reduce the backlog of lottery sales agents who have not had CORI reviews.”

The findings are significant because they affect public trust in lottery operations: who may sell tickets, whether ticket inventory is accounted for, and whether employees are barred from claiming prizes as required.

“No ticket or share shall be purchased by, and no prize shall be paid to any of the following persons: any member or employee of the commission or to any spouse, child, brother, sister or parent residing as a member of the same household in the principal place of abode of any member or employee of the commission.”

CORI means a criminal background record check; ES means the Lottery’s Enterprise Series computer system; reconciliation means checking that tickets, inventory, and money match the records.

“This is a new computer system to which MSLC switched in April 2019.”