KRS § 154A.130 — KY Code / Title XII / Chapter 154A / Section 154A.130
154A.130 Deposit of moneys -- Expenditures and investments authorized -- Allocation of funds -- Transfer of revenues to general fund -- Lottery trust account -- Credit from general fund to literacy fund and higher education scholarships -- Postaudit of corporation's books and records -- Functions of Auditor of Public Accounts -- Annual newspaper publication of information
Status: in_force

154A.130 Deposit of moneys -- Expenditures and investments authorized --

Allocation of funds -- Transfer of revenues to general fund -- Lottery trust

account -- Credit from general fund to literacy fund and higher education

scholarships -- Postaudit of corporation's books and records -- Functions of

Auditor of Public Accounts -- Annual newspaper publication of information.

(1) All money received by the corporation from the sale of lottery tickets and all other

sources shall be deposited into a corporate operating account. The corporation is

authorized to use all money in the corporate operating account for the purposes of

paying prizes and the necessary expenses of the corporation and dividends to the

state. The corporation shall allocate the amount to be paid by the corporation to

prize winners. The amount in the corporate operating account which the corporation

anticipates will be available for the payment of prizes on an annuity basis may be

invested in direct United States Treasury obligations. These instruments may be in

varying maturities with respect to payment of annuities and may be in book-entry

form. Monthly, no later than the last business day of the succeeding month, the

corporation shall transfer to a lottery trust fund the amount of net revenues which

the corporation determines are surplus to its needs. These funds shall be held in

trust until 1990 at which time the General Assembly shall determine the manner in

which the funds will be allocated and appropriated. The net revenues shall be

determined by deducting from gross revenues the payment costs incurred in the

operation and administration of the lottery, including the expenses of the

corporation and the costs resulting from any contract or contracts entered into for

promotional, advertising, or operational services or for the purchase or lease of

lottery equipment and materials, fixed capital outlays, and the payment of prizes to

the holders of winning tickets. After the start-up costs are paid, it is the intent of the

Legislature that it shall be the goal of the corporation to transfer each year thirty-

five percent (35%) of gross revenues to the general fund for the purposes stated

above.

(2) A Kentucky lottery trust account is established in the State Treasury. Net lottery

revenues shall be credited to this restricted account as provided in subsection (1) of

this section. Moneys credited to the Kentucky lottery trust account shall be invested

by the state in accordance with state investment practices and all earnings from the

investments shall accrue to this account. No moneys shall be allotted or expended

from this account unless pursuant to an appropriation by the General Assembly,

except that moneys as are needed shall be transferred to the general fund pursuant

to the provisions of the Acts of the Extraordinary Session of the 1988 General

Assembly. Moneys in the Kentucky lottery trust account shall not lapse at the close

of the state fiscal year.

(3) Each fiscal year, three million dollars ($3,000,000) from net lottery revenues from

the sale of lottery tickets shall be credited from the general fund as follows:

(a) To the statewide reading research center established under KRS 164.0207,

one million two hundred thousand dollars ($1,200,000); and

(b) To the reading diagnostic and intervention fund, one million eight hundred

thousand dollars ($1,800,000).

(4) After the allocation of three million dollars ($3,000,000) to literacy development, as

provided in subsection (3) of this section, net lottery revenues from the sale of

lottery tickets shall be credited from the general fund as follows:

(a) To the Wallace G. Wilkinson Kentucky educational excellence scholarship

trust fund established in KRS 164.7877:

1. Forty percent (40%) in fiscal year 2003-2004; and

2. Forty-five percent (45%) in fiscal year 2004-2005 and each fiscal year

thereafter; and

(b) To the College Access Program and the Kentucky Tuition Grants Program

established in KRS Chapter 164:

1. Forty percent (40%) in fiscal year 2003-2004;

2. Forty-five percent (45%) in fiscal year 2004-2005; and

3. Fifty-five percent (55%) of net lottery revenues in fiscal year 2005-2006

and each fiscal year thereafter.

(5) The Auditor of Public Accounts shall be responsible for a financial postaudit of the

books and records of the corporation. The postaudit shall be conducted in

accordance with generally accepted accounting principles, shall be paid for by the

corporation, and shall be completed within ninety (90) days of the close of the

corporation's fiscal year. The Auditor of Public Accounts shall contract with an

independent, certified public accountant who meets the qualifications existing to do

business within the Commonwealth of Kentucky to perform the corporation

postaudit. The Auditor of Public Accounts shall remain responsible for the annual

postaudit and the corporation shall pay all audit costs. The Auditor of Public

Accounts may at any time conduct additional audits, including performance audits,

of the corporation as he or she deems necessary or desirable. Contracts shall be

entered into for audit services for a period not to exceed five (5) years and the same

firm shall not receive two (2) consecutive audit contracts. All audits shall be filed

with the Governor, the President of the Senate, and the Speaker of the House of

Representatives. The corporation shall reimburse the Auditor of Public Accounts

for the reasonable costs of any audits performed by him or her. The corporation

shall cooperate with the Auditor of Public Accounts by giving employees

designated by any of them access to facilities of the corporation for the purpose of

efficient compliance with their respective responsibilities. With respect to any

reimbursement that the corporation is required to pay to any agency, the corporation

shall enter into an agreement with that agency under which the corporation shall

pay to the agency an amount reasonably anticipated to cover the reimbursable

expenses in advance of the expenses being incurred.

(6) By no later than December 31 of each year, in an advertisement at least one-fourth

(1/4) of a page in size, the Kentucky Lottery Corporation shall publish the

following information in every general-circulation daily newspaper published in

Kentucky:

(a) The statements of revenue, expenses, and changes in retained earnings as

shown in the most recent annual audit report. It shall be explained that the

transfer of dividends is the amount of lottery earnings transferred to the

general fund;

(b) A statement identifying the auditing firm;

(c) A telephone number which citizens may call to obtain a complete copy of the

annual audit report; and

(d) The name of the president/chief executive officer of the Kentucky Lottery

Corporation and a complete list of board members.

The Kentucky Lottery Corporation shall pay for the cost of the advertisement.