Internal Control Procedures

Internal Control Procedures. (a) Each licensee shall establish administrative and accounting procedures for the purpose of exercising effective control over the licensee's internal fiscal affairs. Minimum procedures for adoption by each licensee shall include, but are not limited to, and are designed to reasonably ensure that: 1. Assets are safeguarded; 2. Financial records are accurate and reliable; 3. Transactions are performed only in accordance with management's general or specific authorization; 4. Transactions are recorded adequately to maintain accountability for assets; 5. Access to assets is permitted only in accordance with management's specific authorization; 6. Recorded accountability for assets is compared with actual assets at reasonable intervals and appropriate action is taken with respect to any discrepancies; and 7. Functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound practices by competent, qualified personnel. (b) Each licensee and each applicant for a license shall describe its administrative and accounting procedures in detail in a written system of internal control. Each licensee and applicant for a license shall submit a copy of its written system to the Mississippi Gaming Commission at least six (6) weeks before gaming begins at its establishment. Each written system must include: 1. An organizational chart depicting appropriate segregation of functions and responsibilities; 2. A description of the duties and responsibilities of each position shown on the organizational chart, as well as the names of each key employee by position; 3. A detailed, narrative description of the administrative and accounting procedures designed to satisfy the internal control requirements; 4. A written statement signed by the licensee's chief financial officer and either the licensee's chief executive officer or a licensed owner attesting that the system satisfies the internal control requirements; (c) The licensee may not implement a system of internal control procedures that does not satisfy the stated minimum standards unless the Executive Director, in his sole discretion, determines that the licensee's proposed system satisfies the requirements and approves the system in writing. Within thirty days after a licensee receives notice of the Executive Director's approval of procedures that satisfy the internal control requirements, but that do not satisfy the minimum standards, the licensee shall comply with the approved procedures, amend its written system accordingly, and submit to the Executive Director a copy of the written system as amended and a written description of the variations. (d) Before adding or eliminating a counter game, eliminating all table games, adding any computerized system that affects the proper reporting of gross revenue, adding any computerized system for monitoring slot machines or other games, or any other computerized associated equipment, the licensee must: 1. Amend its accounting and administrative procedures and its written system of internal control to comply with the minimum standards; 2. Submit to the Executive Director a copy of the written system as amended, and a written description of the amendments; 3. Comply with any written requirements imposed by the Executive Director regarding administrative approval of computerized associated equipment; and 4. After paragraphs (a) through (c) have been complied with, implement the procedures and written system as amended. (e) If the Executive Director determines that a licensee's administrative or accounting procedures or its written system does not comply with the requirements of this chapter, the Executive Director shall so notify the licensee in writing. Within thirty days after receiving the notification, the licensee shall amend its procedures and written system accordingly, and shall submit a copy of the written system as amended and a description of any other remedial measures taken. (f) A separate internal audit department (whose primary function is performing internal audit work and who is independent with respect to the departments subject to audit) will be maintained by the licensee. An independent accountant may perform this function in lieu of an internal audit department. For two or more licensees, or a licensee who may have an affiliated company licensed in another jurisdiction, who essentially have common ownership and/or management, a single internal audit department for the combined properties is adequate. The internal audit is required to develop quarterly reports providing details of all exceptions found and subsequent action taken by management to correct. Management must provide a written response to all exceptions found within 30 days of receiving the report. Internal Audit Such reports will include the written response from management. Documentation (e.g. checklists, programs, work papers and supporting documentation of exceptions, reports, etc.) will be prepared to evidence all internal audit work performed as it relates to these requirements. The quarterly Internal Audit Reports, along with the licensees responses, shall be submitted to the Mississippi Gaming Commission no later than thirty (30) days after the end of the calendar quarter. The results of internal audit work will be reported to the general manager and executive management and/or ownership personnel who are independent of the departments under audit. All material exceptions resulting from internal audit work must be investigated and resolved, with the results of such being documented and retained for three years. At a minimum, the following audits should be performed: 1. At least semiannually: i. Table games - fill and credit procedures, pit credit play procedures, count procedures and the subsequent transfer of funds, the tracing of source documents to summarized documentation, and reconciliation to restricted copies. ii. Slot machines - jackpot payout and slot fill procedures, slot drop, count and subsequent transfer of funds, slot machine case/cabinet access, tracing of source documents to summarized documentation and reconciliation to restricted copies. iii. Key Controls – location, control, and usage of sensitive and restricted keys. iv. System Access v. Racebooks and Sports Pools 2. At least annually: i. Keno department - game write and payout procedures and a review of keno audit procedures. ii. Card games department - card game operation, monetary exchange procedures, shill transactions, drop and count procedures. iii. All other revenue sources - procedures for initial recording of other revenue, cash turn-in procedures and accounting procedures. iv. Cage and credit procedures - all cage, credit and collection procedures, and the reconciliation of trial balances to physical instruments on a sample basis. v. Cage accountability reconciled to the general ledger. vi. Bankroll Verification vii. Junkets viii. Responsible Gaming ix. Players Club and Player Tracking – procedures surrounding the earning, use, and protection of points, cash, promotional play, etc., x. Controls surrounding promotions and tournaments, surveillance, information systems and access, purchasing (associated with gaming) accounts payable (associated with gaming). 3. If changes are proposed to the approved system of internal controls, they must be submitted to the Gaming Commission prior to the intended implementation date and may not be implemented without written approval of the Executive Director. (Adopted: 04/21/1994; Readopted: 04/29/1995; Amended: 12/18/1997; Amended: 02/24/1998; Amended: 06/15/2006.)