STATE LOTTERY DEPARTMENT MEGA MILLIONS
REPORT ON APPLYING AGREED-UPON PROCEDURES FOR THE PERIOD APRIL 1, 2008 THROUGH MARCH 31, 2009
June 24, 2009 Members of the Virginia State Lottery Board 900 East Main Street Richmond, Virginia Independent Auditor’s Report on Applying Agreed-Upon Procedures We have performed the procedures enumerated below, which were agreed to by the Virginia Lottery Department and the other member lotteries in the states of California, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas, and Washington (referred to as the “Member Lotteries”), which operate Mega Millions, solely to assist the Virginia Lottery and Member Lotteries with respect to the evaluation of the following financial information associated with Mega Millions: Virginia Lottery’s sales and prize expense for the period April 1, 2008 through March 31, 2009, and the Virginia Lottery’s receivable or payable as of March 31, 2009. Virginia Lottery is responsible for its records of the financial information associated with Mega Millions. This engagement to apply agreed-upon procedures was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the Virginia Lottery and Member Lotteries. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures that we performed and our findings are as follows: A. We obtained from the Virginia Lottery the “Draw Activity” and the “Fixed Prize Analysis” for the period April 1, 2008 through March 31, 2009, and attached those as Exhibit I and II, respectively. We verified the mathematical accuracy of the schedules. We randomly selected five Mega Millions drawings from the period April 1, 2008 through March 31, 2009, for testing as indicated in “C”, “D”, and “E” below. April 11, 2008 June 13, 2008 September 23, 2008 December 05, 2008 March 27, 2009
B.
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Members of the Virginia State Lottery Board June 24, 2009 C. For each drawing selected in step “B” above, we compared the total amount of sales as shown on the daily sales report produced by the Virginia Lottery’s gaming system and the total amount of sales shown on the related daily sales report produced by the Internal Control System (ICS) with the balance listed in the “Sales” column for the respective week on the “Draw Activity” report attached as Exhibit I and found them to be in agreement. We calculated the total dollar amount of the fixed prizes for the drawings selected in step “B” above, based on the total number of winners from the Virginia Lottery’s gaming system for each prize level and the prize structure of Mega Millions’ fixed prizes (as defined in the official game rules). We compared the calculated expense with the amount listed in the “Actual Fixed Prizes” column for the respective drawing on the attached “Draw Activity” report and found them to be in agreement. For each drawing selected in step “B” above, we compared the amount of sales, actual fixed prizes, and share of fixed prizes shown on the “Draw Activity” report attached as Exhibit I to the amounts shown on the applicable Mega Millions Prize Settlement Reports and found them to be in agreement. For the period identified in step “B” above, we randomly selected two months and obtained the “Expired Prize Settlement Report” distributed by the Virginia Lottery. For the two months selected, we obtained from the Virginia Lottery ICS the actual fixed prizes awarded and the prizes unclaimed. We compared the ICS data back to the data reported from the Virginia Lottery for each draw of the subject months and found them to be in agreement. We compared the amount shown as the total of the actual fixed prizes and the total of the share of fixed prizes on the “Draw Activity” report to the applicable amounts shown on the “Fixed Prize Analysis” (Exhibit II) and found them to be in agreement. For each amount listed in the “Cost of Jackpot Prizes” column on the attached “Draw Activity” report, we compared the “cost of jackpot prize” amount to the Virginia Lottery’s cash disbursement subsidiary records, which summarize the funds disbursed to the prize winner and the broker from which the jackpot annuities were purchased and found them to be in agreement. This procedure was not performed this year because there were no jackpots. For each purchase (if any) of investments associated with jackpot prizes, we obtained: 1) broker confirmations and noted that the investments were properly funded solely through the purchase of 100 percent United States Government STRIP Bonds; the bid sheets and supporting documentation and noted that the investments were purchased properly through a competitive bidding process involving a minimum of three primary brokerage firms; and
D.
E.
F.
G.
H.
I.
2)
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Members of the Virginia State Lottery Board June 24, 2009 3) the Security Purchase report, which lists the results of the security purchase and verified that the information reported to the group, is accurate, including the annuity factor for the non-winning bidders.
J.
We compared the total of the quarterly transfers from the Virginia Lottery for settlement of the fixed prize liability as shown in the Virginia Lottery’s cash disbursement subsidiary records to the amount listed in the “Transfers In (Out)” column on the “Fixed Prize Analysis” report attached as Exhibit II and found them to be in agreement. We compared the balance listed as the Virginia Lottery’s receivable or payable as of March 31, 2009, for the fixed prizes as shown on the “Fixed Prize Analysis” report attached as Exhibit II to the Virginia Lottery’s financial accounting records and to the Mega Millions Prize Settlement Report as of March 31, 2009, and found them to be in agreement.
K.
We were not engaged to, and did not conduct an examination, the objective of which would be the expression of an opinion on the specified financial information associated with Mega Millions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Virginia Lottery and Member Lotteries specified above and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.
AUDITOR OF PUBLIC ACCOUNTS LCW/clj
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MEGA MILLIONS VIRGINIA LOTTERY DEPARTMENT DRAW ACTIVITY For the period April 1, 2008 through March 31, 2009 Annuitized Jackpot Amount $ Cost of Jackpot Prizes $ $
Exhibit I
Draw Date 4/1/2008 4/4/2008 4/8/2008 4/11/2008 4/15/2008 4/18/2008 4/22/2008 4/25/2008 4/29/2008 5/2/2008 5/6/2008 5/9/2008 5/13/2008 5/16/2008 5/20/2008 5/23/2008 5/27/2008 5/30/2008 6/3/2008 6/6/2008 6/10/2008 6/13/2008 6/17/2008 6/20/2008 6/24/2008 6/27/2008 7/1/2008 7/4/2008 7/8/2008 7/11/2008 7/15/2008 7/18/2008 7/22/2008 7/25/2008 7/29/2008
$
Sales 2,352,678 1,242,951 1,147,457 1,284,330 1,254,967 1,380,490 1,390,997 1,581,353 1,541,820 2,136,790 2,085,422 2,454,042 2,524,635 3,349,209 1,087,739 1,216,774 958,441 1,177,396 1,136,656 1,261,538 1,204,287 1,413,735 980,042 1,093,105 1,060,897 1,197,408 1,207,343 1,229,019 1,354,876 1,570,798 1,616,235 2,048,322 2,098,759 1,107,978 1,042,872
Actual Fixed Prizes $ 517,692 145,018 118,865 164,157 137,852 150,600 399,885 153,442 153,573 473,952 216,061 784,430 1,052,926 870,405 361,329 246,211 386,641 106,543 409,681 380,440 129,184 170,366 94,923 159,590 132,458 138,384 125,087 784,601 400,543 398,141 181,568 465,737 491,916 117,377 632,906
Share of Fixed Prizes $ 408,635 182,912 145,670 222,208 209,283 243,866 251,550 221,673 194,341 344,362 370,858 525,654 425,113 663,253 202,538 311,474 196,642 134,063 238,799 206,070 210,174 201,938 170,221 187,268 142,691 214,856 147,146 435,074 272,507 261,077 193,759 406,550 345,070 168,613 269,993
Cash Amount -
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MEGA MILLIONS VIRGINIA LOTTERY DEPARTMENT DRAW ACTIVITY For the period April 1, 2008 through March 31, 2009 Annuitized Jackpot Amount Cost of Jackpot Prizes -
Exhibit I
Draw Date 8/1/2008 8/5/2008 8/8/2008 8/12/2008 8/15/2008 8/19/2008 8/22/2008 8/26/2008 8/29/2008 9/2/2008 9/5/2008 9/9/2008 9/12/2008 9/16/2008 9/19/2008 9/23/2008 9/26/2008 9/30/2008 10/3/2008 10/7/2008 10/10/2008 10/14/2008 10/17/2008 10/21/2008 10/24/2008 10/28/2008 10/31/2008 11/4/2008 11/7/2008 11/11/2008 11/14/2008 11/18/2008 11/21/2008 11/25/2008 11/28/2008
Sales 1,220,925 1,203,434 1,395,269 1,339,007 1,525,565 1,572,772 1,863,005 2,067,289 2,403,072 988,650 1,173,376 1,109,325 1,072,067 1,004,502 1,044,709 980,990 1,128,993 1,114,470 1,289,883 950,522 1,079,072 1,034,802 1,187,526 1,149,732 999,362 931,053 1,070,673 1,077,090 1,213,301 1,225,796 1,457,969 1,446,815 1,662,351 1,793,668 2,019,331
Actual Fixed Prizes 138,807 129,444 163,998 158,976 188,350 200,985 183,399 511,273 516,374 89,539 156,200 374,684 369,000 351,860 91,932 363,675 141,355 108,936 389,416 88,284 134,348 108,008 141,605 108,411 93,413 90,237 162,123 123,047 167,222 122,753 187,825 174,034 168,844 217,020 216,349
Share of Fixed Prizes 243,556 378,604 377,985 234,737 281,588 290,786 261,439 356,801 376,481 159,474 235,814 155,733 182,325 190,380 169,228 183,257 193,253 222,105 241,849 137,076 138,070 134,054 248,773 120,575 191,882 116,772 171,103 183,924 224,897 192,310 216,907 200,344 300,532 294,207 299,192
Cash Amount -
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MEGA MILLIONS VIRGINIA LOTTERY DEPARTMENT DRAW ACTIVITY For the period April 1, 2008 through March 31, 2009 Annuitized Jackpot Amount $ $ Cost of Jackpot Prizes $
Exhibit I
Draw Date 12/2/2008 12/5/2008 12/9/2008 12/12/2008 12/16/2008 12/19/2008 12/23/2008 12/26/2008 12/30/2008 1/2/2009 1/6/2009 1/9/2009 1/13/2009 1/16/2009 1/20/2009 1/23/2009 1/27/2009 1/30/2009 2/3/2009 2/6/2009 2/10/2009 2/13/2009 2/17/2009 2/20/2009 2/24/2009 2/27/2009 3/3/2009 3/6/2009 3/10/2009 3/13/2009 3/17/2009 3/20/2009 3/24/2009 3/27/2009 3/31/2009 Total
Sales 2,427,120 2,771,487 3,087,531 4,219,178 1,108,399 1,201,695 1,221,836 1,176,937 1,305,418 1,316,172 1,018,407 1,127,331 1,098,947 1,031,315 945,726 1,155,784 1,084,625 1,296,704 1,310,711 1,482,172 1,554,795 1,822,590 2,029,562 2,378,828 2,618,435 3,314,164 3,707,832 1,212,352 1,158,796 1,358,874 1,110,456 1,224,126 1,189,655 1,348,087 1,332,365 $ 157,336,139 $
Actual Fixed Prizes 502,195 292,293 632,422 754,318 130,485 138,169 149,314 145,782 137,943 155,385 161,845 133,014 106,775 110,067 125,603 196,842 441,171 145,345 164,498 216,644 184,048 196,813 254,297 761,842 310,477 582,149 625,325 387,015 113,632 157,579 155,693 405,303 132,667 409,212 135,693 28,236,065 $
Share of Fixed Prizes 402,213 394,904 617,240 849,382 136,612 252,130 186,673 258,543 236,161 206,024 250,340 207,146 198,523 172,659 150,480 347,839 398,769 293,740 163,287 304,163 262,826 264,894 340,505 396,114 460,678 641,273 662,057 187,257 145,529 209,917 242,565 206,788 202,098 277,489 182,163 27,940,895
Cash Amount -
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MEGA MILLIONS VIRGINIA LOTTERY DEPARTMENT FIXED PRIZE ANALYSIS For the period April 1, 2008 through March 31, 2009
Exhibit II
California Georgia Illinois Massachusetts Maryland Michigan New Jersey New York Ohio Texas Virginia Washington Total
Balance as of April 1, 2008 Receivable/ (Payable) $ 278,581 (578,065) (106,792) (174,825) 68,066 476,378 (963,474) (147,031) 468,099 872,258 (193,195) $ -
Prior Year Settlement Adjustment $ $ -
Actual Fixed Prizes $ 34,335,017 32,932,053 21,413,480 22,882,070 33,406,515 47,293,412 83,493,481 33,397,222 36,350,443 28,236,065 9,944,683 $
Share of Fixed Prizes 35,918,846 35,744,709 20,397,685 21,703,327 34,237,168 48,429,169 83,125,659 33,195,375 32,563,502 27,940,895 10,428,106
Qtrly/Yrly Settlements Transfers In (Out) $ (1,824,648) (2,328,840) 746,449 578,338 (1,054,533) 485,764 (1,302,230) 349,911 3,579,392 1,124,144 (353,747) $ -
Balance as of March 31, 2009 Receivable/ (Payable) $ 519,400 (1,061,881) 162,554 425,580 291,946 (1,145,143) 706,578 (295,095) 675,648 43,284 (322,871) $ -
$ 383,684,441
$ 383,684,441
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