RFP: Colorado Lottery Financial and Compliance Audit


SECTION I ADMINISTRATIVE INFORMATION A. ISSUING OFFICE This request for proposal (RFP) is issued by the Office of the Colorado State Auditor. The terms State Auditor, State, and State of Colorado are used interchangeably. All proposals should be delivered to: Office of the Colorado State Auditor State Services Building 1525 Sherman St, 7th Floor Denver, Colorado 80203 Attn: Bryan Brune This email address is being protected from spambots. You need JavaScript enabled to view it. As an agency within the Legislative Branch, the OSA and this solicitation are exempt from the State Procurement Code and State Procurement Rules. All communications regarding this RFP should take place directly with the OSA’s assigned contact listed above. B. BACKGROUND INFORMATION The Office of the State Auditor (OSA) is soliciting proposals to conduct an audit of the Department of Revenue, State Lottery Division. The State Lottery Division was created as a Division within the Department of Revenue with the passage of Senate Bill 119 on April 30, 1982. The Lottery began operations on July 1, 1982 and sold its first lottery ticket on January 24, 1983. The Lottery is governed by a Commission of five members appointed by the Governor. By statute, lottery commission members must include an attorney, a certified public accountant, and a law enforcement officer. Members may serve up to two 4-year terms. The commission’s responsibilities are stated in Section 24-35-208, C.R.S., and include: • Promulgation of rules and regulations to govern Lottery operation. • Carrying on a continuous study and investigation of the Lottery to determine the need for changes in statutes, rules or regulations, or in the administration and operation of the Lottery. 4 The Lottery’s enabling legislation requires that no less than 50 percent of the total revenue from sales of lottery tickets be for prizes. The legislation also provides guidelines for distribution of net proceeds to beneficiary agencies. The Colorado Lottery currently contracts with a third party vendor for comprehensive jackpot and scratch ticket gaming products and services. Pursuant to this contract, a third party vendor has implemented and operates for the Lottery an extensive computerized wagering system, including primary and back-up central computer systems, communications equipment and retailer sales terminals used for the Lottery’s Powerball, Mega Millions, Lucky for Life, Lotto, Pick 3, and Cash 5 games and game ticket validations. A third party vendor system processes a very large portion of the Lottery’s financial data, including all daily sales data for the Powerball, Lotto, Cash 5 online games and scratch games. The Department of Revenue, State Lottery Division was appropriated $98,320,468 total funds and 117.1 FTE in Fiscal Year 2018.


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