INV-2012-0374

(1) Investigators discovered that the North Carolina Education Lottery failed to collect liquidated damages from GTECH Corporation, its primary gaming vendor, since the Lottery's inception in 2006. Instead, the Lottery allowed GTECH to accumulate and carry an outstanding balance for liquidated damages for years. As of June 30, 2011, $182,372 remained uncollected while $278,432 was collected in the form of goods and services. This practice violated the State's Cash Management Policy regarding the collection and deposit of funds owed to the State. (2) The investigation revealed the Lottery failed to verify and document the value of certain items received in payment for assessed liquidated damages. The Lottery was unable to provide adequate documentation to support the value of 12 instant ticket vending machines that offset $195,300 of the assessed liquidated damages. Details about each item are provided in the 'Findings and Recommendations' section of the report.