N.Y. Comp. Codes R. & Regs. tit. 9 § 5109.1

Current through Register Vol. 46, No. 45, November 2, 2024

Section 5109.1 - Annual audit and other related reports

(a) Each video lottery gaming agent, unless specifically exempted by the commission in writing, shall, at such agent's own expense, cause such agent's annual financial statements to be audited in accordance with generally accepted auditing standards by an independent certified public accountant licensed to practice in the State.

(b) The annual financial statements shall be prepared on a comparative basis for the video lottery gaming agent's current and prior standard financial year, and shall present financial position and results of operations in conformity with generally accepted accounting principles.

(c) The financial statements required by this section shall include a footnote reconciling and explaining any differences between the financial statements included in the video lottery gaming agent's annual report and the audited financial statements. Such footnote shall, at a minimum, disclose the effect of such adjustments on:

(1) revenues from the video lottery gaming facility;

(2) revenues net of complimentary services;

(3) total costs and expenses;

(4) income before extraordinary items; and

(5) the net result of revenues less expenses.

(d) Two copies of the audited financial statements, together with the report thereon of the video lottery gaming agent's independent certified public accountant, shall be filed with the commission not later than 120 days following the end of the video lottery gaming agent's fiscal year.

(e) In addition to a video lottery gaming agent's audited financial statements, the video lottery gaming agent shall submit a copy of the management letter prepared by the independent certified public accountant that lists any internal control or operational weaknesses noted during the financial statement audit and recommendations for improvement. The video lottery gaming agent shall prepare a response to the issues outlined in the management letter that describes any corrective actions taken or planned to be taken and include a copy of this response with such agent's submission to the commission as required in subdivision (d) of this section.

(f) In addition to the management letter, the commission may require the video lottery gaming agent to engage an independent certified public accountant approved by the commission to perform an additional review of internal controls and/or specified expenditures that conform to specifications prescribed by the commission. The commission shall notify the video lottery gaming agent of the type of report required, the scope of such report, and the frequency with which it should be performed. This review shall be performed at the expense of the video lottery gaming agent unless otherwise determined by the commission. The video lottery gaming agent shall respond to recommendations in the report noting any corrective actions taken or planned to be taken. The video lottery gaming agent shall submit two copies of this report including the required response to the commission within 90 days following the end of the period covered by the report, unless otherwise instructed by the commission.

(g) If the video lottery gaming agent or any of such agent's affiliates is publicly held, the video lottery gaming agent or the affiliate shall submit one copy to the commission of any report, including, but not limited to, forms S-1, 8-K, 10-Q, 10-K, proxy or information statements and all registration statements, required to be filed by such licensee or affiliates with the Securities and Exchange Commission or other domestic or foreign securities regulatory agency, at the time of filing with such Securities and Exchange Commission or other agency.

(h) If an independent certified public accountant who was previously engaged as the principal accountant to audit the video lottery gaming agent's financial statements resigns or is dismissed as the video lottery gaming agent's principal accountant, or another independent certified public accountant is engaged as principal accountant, the video lottery gaming agent shall file a report with the commission within 10 days following the end of the month in which such event occurs, setting forth the following:

(1) the date of such resignation, dismissal or engagement;

(2) whether in connection with the audits of the two most recent years preceding such resignation, dismissal, or engagement there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of the former accountant would have caused such accountant to make reference in connection with such accountant's report to the subject matter of disagreement, including a description of each such disagreement. The disagreements to be reported shall include those resolved and those not resolved;

(3) whether the principal accountant's report on the financial statements for any of the past two years contained an adverse opinion or disclaimer of opinion or was qualified. The nature of such adverse opinion, disclaimer of opinion, or qualification shall be described;

(4) the video lottery gaming agent shall request the former accountant to furnish to the video lottery gaming agent a letter addressed to the commission stating whether that accountant agrees with the statements made by the video lottery gaming agent in response to this subdivision. Such letter shall be filed with the commission as an exhibit to the report required by this subdivision.

(i) The commission has the authority to conduct or have conducted an audit or review of any of the video lottery gaming agent's financial controls and records.

(j) In those circumstances where the video lottery gaming agent is not currently an active operator of a video lottery gaming facility, or portion thereof, the commission may by written authorization either revise or eliminate the standard reports to be filed by the video lottery gaming agent.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 5109.1