Section 12-574-F64 - Accounting system(a)Scope. This particular section of these regulations shall apply only to association, concessionaire, vendor and their affiliate licensees. When the term licensee is used herein, unless otherwise specified, it shall be deemed to include only those licensees. The division on its own, or upon appropriate application may exempt a licensee from any of the provisions of this section. The burden of proving that an exemption should be granted rests solely with the licensee.(b)Generally. Pursuant to section 12-574(k) of the Connecticut General Statutes, the executive director may require that each licensee establish and maintain an accounting system, which will, at a minimum, provide for proper, accurate, complete and timely record keeping and recording of all assets, liabilities, equities, obligations, receipts, revenues, disbursements and expenses of such licensee, subject to the executive director's approval. Such system shall provide for not only accountability and an adequate system of internal control, but shall be established on or reconcilable to an accrual basis to permit preparation of financial statements in conformity with generally accepted accounting principles. Any subsequent revisions shall be subject to division approval.(c)Uniform reporting. Each licensee shall establish a basic set of books and chart of accounts which shall permit reporting in conformity with the uniform reporting system schedules and reporting requirements as established by the division for disclosure, licensing and interim and fiscal year financial reporting. Any subsequent material deviation from such uniform standards must be submitted to and approved by the division prior to implementation. Such submission to the division shall list the type of books maintained and provide the account code numbers and account names by type of account.(d)Organizational charts. Each licensee shall establish an organizational chart which shall indicate the lines of authority, responsibility and control for each operation of the licensee. Such chart shall provide the name and the titles of key managers and supervisory personnel including their assistants and a brief description of their responsibility and authority. Such organizational chart shall be filed prior to the first day of operation with the division and shall be updated annually thereafter and promptly for any termination of an individual or reorganization of responsibilities, authority or control. Such termination or reorganization must be reported together with pertinent details to the division.(e)Inventory. The accounting system utilized by licensees shall include detailed information regarding purchase of goods for sale, inventory of goods held for sale and goods sold. Such system shall indicate the unit of measure, the unit cost of items purchased and sold or in inventory, and shall provide adequate control and traceability without reconstruction of detailed records.(f)Maintenance & storage of records.(1) Each licensee shall provide for the timely processing and recording of data as required by the division and shall insure the accuracy of the accounts, ledgers, reports and schedules as maintained.(2) Each licensee shall provide for adequate storage and safeguarding of financial and related records for five (5) years. Such records, including original source documents must be maintained in Connecticut unless the licensee is an out-of-state affiliate or unless prior written permission or exemption has been granted by the division. The division may, after audit or in the case of superfluous records, permit the destruction of records before the expiration of this 5 year period. Should the division require the retention of records beyond five years, it shall secure such records and provide for their storage. The division shall be notified of the disposition of any of the records held in excess of five (5) years by the licensees.(g)Access, inspection and monitoring of the accounting system. The division or its duly authorized representatives and the Department of Revenue Services or its agents are authorized:(1) To enter upon the premises of any licensee for the purpose of inspecting, examining or testing any and all files and books and records and for the purpose of monitoring cashiers, pari-mutuel clerks and other persons handling money or records on said premises; and(2) to monitor and test the internal control system of all phases of the cash flow, revenue and expenditures. The division and the Department of Revenue Services and such agents are to be provided with total cooperation and such written information in a timely manner as may be requested from each licensee including, but not limited to, representation letters (contingent liability letter from licensee's legal counsel and a management representation letter) to the division auditors for accounting years under division audit. In addition, each licensee shall cooperate in making available to the division all records and information generated from consulting with or examinations by third-party firms which materially impact the financial operation of a facility or licensee.Conn. Agencies Regs. § 12-574-F64
Adopted effective October 3, 2001