01.25.2008
Lottery Director's letter to State Controller John Chiang
January 24, 2008
The Honorable John Chiang
California State Controller
300 Capitol Mall, Suite 1850
Sacramento, CA 95814
Re: Expenditures
I am in receipt of your letter concerning the California Lottery's $20 Billion to Education Employee Recognition Event. I welcome a full audit under standard auditing protocols and have directed my staff to comply with any and all requests from your office. I am confident a full audit, as opposed to your preliminary review, will find that these expenses are authorized under the Lottery Act.
As with all submissions to the State Controller’s Office, our expenses for payment for this and similar events in years past have been documented for your review. As the Lottery’s auditor, I will also note that the State Controllers Office charges approximately $1 million dollars every year to audit our activities including the State Administrative Manual (SAM) Section 20000 audits. Recent SAM 20000 audits performed by the State Controller’s Office did not find that any of these similar prior expenses were inappropriate in any way.
It is common for elected officials and state government employees to treat the Lottery similarly to other government agencies. However, the Lottery was created by voters as a unique business enterprise within state government when they passed Proposition 37 in 1984. Specifically, Government Code Section 8880.64 addresses the authorized expenses of the Lottery.
I look forward to the outcome of your audit. If I can be of any assistance to you and your staff, please do not hesitate to contact my office directly.
Sincerely,
JOAN M. BORUCKI
Director