Please ensure Javascript is enabled for purposes of website accessibility
California Lottery Shortchanged Schools by $36M, Auditor Says
gvw_ap_news
By Associated Press
Published 5 years ago on
February 25, 2020

Share

SACRAMENTO — The California lottery skimped on giving $36 million in revenue to fund public education and spent $720,000 on food and travel expenses without considering cheaper options, the state auditor said in a report made public Tuesday.

Lottery officials also spent $720,000 on 17 agreements with hotels at retailer trade shows between 2014 and 2018 without records to show that the agency considered competing offers for lower-cost hotels and food providers, the report said.
Sales from scratch and lotto tickets have funded public schools and colleges in California since 1985. But the lottery should have accounted for an increase in profits during the fiscal year that ended in June 2018 by turning over an additional $36 million to finance public education.
The California State Lottery said in a written response that was included with the audit report that it disagreed with the auditor’s findings and said that the agency gives as much as it can to fund education.
Lottery officials also spent $720,000 on 17 agreements with hotels at retailer trade shows between 2014 and 2018 without records to show that the agency considered competing offers for lower-cost hotels and food providers, the report said.
“Several of those agreements contained excessive costs for food and beverages,” the audit said.

The Lottery Agency’s Response Disputed That There Was Hotel Overspending

The audit also criticized the State Controller’s Office tasked with overseeing the lottery for failing to track that spending. In April 2019, the State Controller’s Office removed a finding from a report it conducted that questioned the lottery agency’s expenses on the hotel agreements following criticism from a lottery attorney, according to the report.
After the State Controller’s Office shared the draft finding of its audit with lottery officials, the California State Lottery lawyer “asked for adjustments to the hotel agreement finding” and the finding was removed within one day, the state auditor’s report said.
The controller’s office “inappropriately removed the finding before publishing the final audit report even though it had sufficient evidence supporting that finding,” the state auditor’s report said.
The lottery agency’s response disputed that there was hotel overspending, saying that “after factoring in the time and cost associated with seeking out and negotiating rates with different hotels, the possibility that the Lottery could have achieved substantial savings by contracting with other hotels is questionable.”
The state auditor report also said the controller’s office submitted a financial performance report about the lottery that the lottery agency’s officials prepared — without independent analysis of the documents by the controller’s office. That performance report was delivered three years late to the Legislature, in October 2019, the state auditor’s report said.

Maximizing Funding for Education

The state lottery during the fiscal year that was examined provided $1.7 billion to public education, about 1% of the state’s annual budget for schools, according to the auditor’s report.

The state auditor’s report said the law requires the lottery to provide as much funding possible for education after accounting for operating expenses and to increase funding every year based on the agency’s profits.
Alva Johnson, the director of the California State Lottery, said her agency and the state auditor have a “fundamental difference of opinion over interpretation of the California State Lottery Act” and that it is unclear how a 2010 state law defined the lottery’s net revenues.
She also said the lottery agency has complied with its its mandate of “maximizing funding for education.”
The state auditor’s report said the law requires the lottery to provide as much funding possible for education after accounting for operating expenses and to increase funding every year based on the agency’s profits.
“The Lottery has not used a budgeting process that is designed around meeting the Lottery Act’s requirements,” the state auditor wrote in its response to Johnson.
The state auditor’s “findings demonstrate what we suspected all along. That the California Lottery has a culture of profits first and schools last,” said Republican state Sen. Ling Ling Chang, who requested the audit.

DON'T MISS

5 Reasons Early Voting Is Overwhelmed With Falsehoods

DON'T MISS

Christian McCaffrey Returns to Practice for the 49ers From Achilles Tendon Injury

DON'T MISS

California Sues LA Suburb for Temporary Ban of Homeless Shelters

DON'T MISS

You May Have Blocked Someone on X but Now They Can See Your Public Posts Anyway

DON'T MISS

Some Republican-Led States Refuse to Let Justice Department Monitors Into Polling Places

DON'T MISS

Fresno Police Arrest Suspect in Fatal NW Apartment Shooting

DON'T MISS

Fresno Murder Suspect Stopped in Las Vegas, Others Wanted

DON'T MISS

Trump’s Crowds Are Dwindling as His Campaign Winds Down

DON'T MISS

Trump Threatens 25% Tariff on Mexico to Curb Immigration

DON'T MISS

Music Legend Quincy Jones, Architect of Pop’s Greatest Hits, Dies at 91

UP NEXT

Trump Threatens 25% Tariff on Mexico to Curb Immigration

UP NEXT

What Is Sierra Unified’s Plan to Boost Lagging Student Achievement?

UP NEXT

Big Spenders: These Companies Are Giving the Most to California Legislative Candidates

UP NEXT

Immediate Threat: Mussel Invades California’s Delta, First Time in North America

UP NEXT

Lyft Pays $2.1 Million to Settle Case Alleging the Ride-Hailing Service Deceived Drivers

UP NEXT

Southern California County Official Pleads Guilty to Bribery Charge in COVID Funds Scheme

UP NEXT

Visalia Rollerblader Suffered Major Injuries After Being Struck by Vehicle

UP NEXT

Fresno County Man Indicted for Possessing Stolen Guns

UP NEXT

Anti-Semitic Incident at Oakland Cafe Raises Concerns About Rising Intolerance

UP NEXT

Fresno Unified Schedules Community ‘Listening Sessions’ with Trustees

You May Have Blocked Someone on X but Now They Can See Your Public Posts Anyway

54 mins ago

Some Republican-Led States Refuse to Let Justice Department Monitors Into Polling Places

60 mins ago

Fresno Police Arrest Suspect in Fatal NW Apartment Shooting

2 hours ago

Fresno Murder Suspect Stopped in Las Vegas, Others Wanted

2 hours ago

Trump’s Crowds Are Dwindling as His Campaign Winds Down

2 hours ago

Trump Threatens 25% Tariff on Mexico to Curb Immigration

3 hours ago

Music Legend Quincy Jones, Architect of Pop’s Greatest Hits, Dies at 91

3 hours ago

Big Pharma Backs Harris 6-to-1 Over Trump in Presidential Campaign Contributions

3 hours ago

Sanger Men Arrested in Connection with Slingshot Vandalism Spree at Businesses

3 hours ago

What Is Sierra Unified’s Plan to Boost Lagging Student Achievement?

4 hours ago

5 Reasons Early Voting Is Overwhelmed With Falsehoods

This year’s early voting period appears to be far more polluted with election misinformation than those in previous presidential races, acco...

28 mins ago

Voters cast their ballots at Desert Breeze Community Center in Las Vegas during the last day of in-person early voting in Nevada on Friday, Nov. 1, 2024. Nearly 75 million people have cast early ballots, making their voices heard amid worry about the process, the outcome and democracy itself. (Bridget Bennett/The New York Times)
28 mins ago

5 Reasons Early Voting Is Overwhelmed With Falsehoods

36 mins ago

Christian McCaffrey Returns to Practice for the 49ers From Achilles Tendon Injury

40 mins ago

California Sues LA Suburb for Temporary Ban of Homeless Shelters

54 mins ago

You May Have Blocked Someone on X but Now They Can See Your Public Posts Anyway

60 mins ago

Some Republican-Led States Refuse to Let Justice Department Monitors Into Polling Places

Gerrick Franklin (pictured), 34, was taken into custody Sunday in Madera County on suspicion of killing Tyler Hamon, 33. (Fresno PD)
2 hours ago

Fresno Police Arrest Suspect in Fatal NW Apartment Shooting

2 hours ago

Fresno Murder Suspect Stopped in Las Vegas, Others Wanted

Former President Donald Trump, the Republican presidential nominee, on stage during a campaign rally in Lititz, Pa., on Sunday, Nov. 3, 2024. Trump told supporters on Sunday that he “shouldn’t have left” the White House at the end of his term during an end-of-campaign rally where he vented angrily about a spate of new public polls showing him losing ground to Vice President Kamala Harris and joked about reporters being shot at. (Doug Mills/The New York Times)
2 hours ago

Trump’s Crowds Are Dwindling as His Campaign Winds Down

Search

Send this to a friend