An audit into the financials of the California Lottery found the transfer of funds to public education lacking in the amount of $36 million.
The assessment, released Tuesday, that the California Lottery failed to proportionately increase transfers to public schools as revenues increased. For the fiscal year of 2017-18, the gap amounted to the $36 million figure.
The report emphasized the importance of adherence to proportionate school funding. Without measures to ensure the appropriate amount of funds go to public education, it said schools face dangerous sharp declines in funding.
In addition to the school funding shortfall, the audit also found the California Lottery signed noncompetitive agreements. It totaled those 8 agreements at $5.7 million. The California Lottery also apparently did not select the lowest bid in 17 additional agreements. Those total around $720,000.
Furthermore, the audit extended its purview to the State Controller’s Office. It found lax oversight resulting in one particularly troublesome act of complicity. After the agency running the lottery disputed a finding in another audit, the State Controller’s Office removed it on their behalf. Then, the agency submitted a report directly to the state legislature, bypassing review and analysis from the State Controller’s Office.
The conclusion of the audit’s report calls for the agency to transfer the $36 million to public education. It goes on to suggest the State Controller’s Office make regular audits of the California Lottery to ensure its operations remain in compliance with laws regarding procurement.
Its director responded to the audit’s findings by referring to them as a “fundamental difference of opinion.”