N.H. Admin. Code § Lot 7206.08

Current through Register No. 36, September 5, 2024

Section Lot 7206.08 - Internal Control Procedures

(a) The charitable organization, or the operator employer hired to act on behalf of the organization, shall develop, implement, and adhere to written internal control policies and procedures designed to ensure effective control over the gaming operation by discouraging and protecting against illicit behavior and safeguarding the integrity of the games.

(b) The controls required by (a) above shall ensure that:

(1) Assets are safeguarded;

(2) Financial records are complete, accurate, and reliable;

(3) Transactions are performed only in accordance with the general or specific authorization this chapter;

(4) Transactions are recorded adequately to permit proper reporting of gaming revenue and of fees and taxes, and to maintain accountability for assets;

(5) Accountability for assets is maintained in accordance with generally accepted accounting principles;

(6) Access to assets is permitted only to authorized personnel;

(7) Recorded accountability for assets is compared with actual assets at least once a day;

(8) When a variance is discovered, the shortage or overage is recorded, accounted for and paid for, and all variances $1,000 or more, in whole or in aggregate, are reported to the commission within 30 days;

(9) Appropriate action is taken with respect to any discrepancies, variances, or errors to ensure the state and the charitable organization are not negatively impacted;

(10) Functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound practices by authorized personnel, and no individual is in a position to perpetuate fraud or conceal errors or irregularities in the normal course of duties; and

(11) Gaming is conducted in accordance with RSA 287-D and this chapter.

(c) The internal control policies and procedures required in (a) above shall address a minimum of the following areas:

(1) The implementation of an organizational structure designed to segregate functions, duties, and responsibilities in accordance with sound business practices to prohibit individuals from being in a position that allows them to both commit and conceal an error or to perpetrate a fraud in their normal course of duties;

(2) Control of games of chance equipment inventory to prevent unauthorized access, misappropriation, forgery, theft, or fraud, including systems and safeguards with regard to the receipt, storage, inventory and disbursal of chips, cards, dice, and other sensitive equipment utilized in games of chance;

(3) A system for the collection and security of moneys at the table games, the transfer and recordation of chips between the table games and the cashiers' cage, the transfer of money from the table games to the counting process, and the process and equipment to assure security for the counting and recordation of revenue;

(4) Safeguards of assets within the cashiers' cage for:

a. The receipt, storage, inventory and disbursal of chips, cash, counter checks and other cash equivalents used in gaming;

b The cashing of checks;

c. The redemption of chips and other cash equivalents used in gaming; and

d. The recording of transactions pertaining to gaming;

(5) An accounting system of controls established in accordance with (d)-(e) below to safeguard assets and ensure that:

a. Financial records are prepared and maintained completely, accurately and reliably;

b Revenue and fees are properly reported and paid;

c. Accountability of assets is maintained; and

d. The charitable organization and the game operator employer review records and reports periodically, and, when applicable, appropriate action is taken with respect to any discrepancies;

(6) When tournaments are offered, a system for tracking the amount that that a player has spent for buy-ins and re-buys to ensure players do not exceed the limits set by RSA 287-D:14, XV and XVI;

(7) Standards governing the utilization of the surveillance and security designed to prevent unauthorized access, activities, misappropriation, forgery, theft, or fraud;

(8) When applicable, physical and systems controls for information technology, including data back-up, and maintenance of systems; and

(9) Procedures and controls for ensuring that the gaming area is secure during normal operations, as well as contingency plans to address unforeseen incidences such as power outages, or episodes of equipment failure.

(d) The charitable organization, or the operator employer hired to act on behalf of the organization, shall establish and maintain an accounting system for all activities conducted in conjunction with games of chance that includes a minimum of the following:

(1) Internal controls to secure and count all cash received in connection with a game of chance event, including the requirements that no fewer than 2 individuals be responsible for counting the receipts;

(2) Methods of accounting for chip sale and reimbursement;

(3) Verification of all transfers of cash and chips between game table(s) and the central counting area;

(4) Procedures to ensure that contributions made to a player-funded promotion are kept separate, and at no time co-mingled with other gaming revenue; and

(5) Procedures to ensure that, for all cash poker games, the amount collected for the rake per hand are at least one dollar more than the amount contributed per hand toward a player-funded promotion.

(e) General accounting records shall consist of controls established to safeguard assets and ensure accurate and complete records of all transactions pertaining to gaming revenue and activities of operational accountability that:

(1) Record gaming activity transactions in an accounting system to identify and track all revenues, expenses, assets, and liabilities;

(2) Produce financial statements to include, at a minimum, an income statement and a balance sheet;

(3) Produce appropriate subsidiary ledgers to support the balance sheet;

(4) Inventory and safeguard assets;

(5) Prepare, review, and maintain accurate financial statements;

(6) Prepare minimum bankroll calculations in accordance with Lot 7207.04(o) below; and

(7) Maintain and preserve all financial books, records, and relevant supporting documentation.

(f) When the commission determines that the policies and procedures do not meet the requirements of (c)-(e) above, the licensee shall submit and implement revised procedures that do meet the requirements within 15 days of the commission's notification.

(g) When the licensee updates or otherwise amends any portion of the internal control procedures, the licensee shall submit the amendments to the commission at least 15 days before the amendment is implemented.

(h) All revisions or amendments made as described in (f) and (g) above shall be submitted to the commission:

(1) Using revision marks so the changes made to the document are clear;

(2) With a cover sheet that documents the reason why the amendment is being submitted; and

(3) With the version number clearly marked on every page along with the effective date.

(i) The charitable organization, or the operator employer hired to act on behalf of the organization, shall maintain a copy of the current controls and procedures in the gaming area, or otherwise make them available for inspection upon request.

(j) The licensee shall maintain a copy of any superseded changes to its internal controls for a minimum of 2 years.

N.H. Admin. Code § Lot 7206.08

Derived from Volume XXXIX Number 32, Filed August 8, 2019, Proposed by #12839, Effective 7/27/2019, Expires 7/27/2029.