Source: https://www.federalregister.gov/documents/2018/12/21/2018-27651/minimum-internal-control-standards
Timestamp: 2019-10-14 16:22:18
Document Index: 226891963

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A Rule by the National Indian Gaming Commission on 12/21/2018
65506-65509 (4 pages)
3141-AA60
https://www.federalregister.gov/d/2018-27651 https://www.federalregister.gov/d/2018-27651
The National Indian Gaming Commission (NIGC) amends its minimum internal control standards for Class II gaming under the Indian Gaming Regulatory Act to correct an erroneous deletion of the key control standards and to make other minor edits and additions for clarity.
Jennifer Lawson at (202) 632-7003 or by fax (202) 632-7066 (these numbers are not toll free).
On September 21, 2012, the Commission concluded nearly two years of consultation and drafting with the publication of comprehensive amendments, additions, and updates to Part 543, the minimum internal control standards (MICS) for Class II gaming operations (77 FR 58708). The regulations require tribes to establish controls and implement procedures at least as stringent as those described in Start Printed Page 65507this part to maintain the integrity of the gaming operation. In late 2013, the Commission published a final rule, adding kiosk drop, count, fill, and surveillance standards to Part 543 (78 FR 63873).
Now, the Commission is finalizing additional revisions, largely technical in nature, that are meant to correct earlier editing oversights and to better clarify the intent of the provisions. The proposed rule was published June 8, 2018 (83 FR 26620), and the comment period expired July 9, 2018.
NIGC received the following comments in response to the proposed rule:
Comment: One commenter recommended requiring an inventory under § 543.10(e) if a table is open going into the next gaming day.
Response: The standard requires a count at the end of each shift and the Commission notes that the majority of operations have shifts that coincide with their gaming days. Tribes have the option of requiring an additional count where a shift crosses over from one gaming day to the next.
Comment: One commenter argued that it is too burdensome to require a supervisor to count the table inventory in § 543.10(e).
Response: Since its inception, § 543.10(e) has required a supervisor to count the table inventory. The rule now also requires a supervisor to count the main card room bank.
Comment: One commenter believed that the amendments eliminated kiosks from § 543.17(j).
Response: The kiosk provisions remain in the regulations and can be found at §§ 543.17(i) (Kiosk count standards) and (j)(9): “Controls must be established and procedures implemented to safeguard the use, access, and security of keys for kiosks.”
Comment: Two commenters expressed concern that § 543.17(j)(4), which requires the key holder to be independent of those conducting the drop, would prevent those responsible for drops from having access to the keys necessary to conduct them. One commenter specifically identified the need for security personnel's assistance in emergency drops as problematic under these regulations because the security department holds the keys.
Response: The term “custody” seems to have been confused with physical use of the key. Typically, security personnel are not used as drop agents: they only accompany the drop team as they remove Financial Instrument Storage Components. Occasionally, operations allow card tables to be dropped by a security agent and the shift supervisor.
Custody involves more than just physical custody (i.e., stored in security room or other area controlled by security), and includes logical custody (i.e., I.T. controls of lock box). Additionally, the complete inventory records for the keys should be kept with accounting department.
A separation of duties must be established for granting or limiting access to the keys, custody of the keys, and recordkeeping duties for the keys. Each operation is unique and, to maintain independence, security should either be precluded from acting as drop team agents or have limited control over the keys.
Comment: One commenter requested clarification on § 543.17(j)(7), particularly whether it is intended to address emergency drop situations requiring immediate access.
Response: The standard is meant to address emergency drop situations. Use of the keys outside the scheduled time for use includes an emergency drop. Other times can include, but are not limited to, inventory or replacement. The standard is intended to ensure security of the box contents and require proper authorization to issue of keys outside of the scheduled count.
Comment: One commenter asked whether § 543.17(j)(8) applies to manually-controlled key boxes, electronic boxes, or both, and whether removal of the player interface drop and count will need to meet requirements set forth for regularly scheduled drop and count (e.g. § 543.17(e)(4)) in addition to these requirements.
Response: The standard applies to computerized, electronic, and alternative key systems. A manual key system does not have an override key. In the event of power loss or other issue, the emergency manual keys allow access to the key box. These keys should be secured by other means and only accessed in an emergency.
The removal of a financial instrument can occur during a regularly scheduled drop or an emergency drop. Standards are provided for each situation and the operation should determine which are appropriate to follow based on the circumstances.
Comment: One Commenter asked whether § 543.17(j)(8)(i) also applies to financial instrument storage components and drop boxes.
Response: It does not. The standard applies to emergency manual keys. The standard later states at § 543.17(j)(8)(iii) that if the player interface drop and count keys are not accessed, then only two agents are required: Those are the keys used for the financial instrument storage components and drop boxes.
Comment: One commenter expressed a general concern that overly burdensome key controls lead to delay, customer frustration and inefficiency of the gaming operation and noted the need for balance between security and functionality.
Response: The Commission agrees and believes it has done its best to strike a proper balance between protection of tribal assets and efficiency. These standards are consistent with those of other jurisdictions, but also allow some flexibility. Tribes and operation management must establish controls and implement procedures to best fit their needs and manage risks specific to their operations.
Comment: One commenter believes § 543.17(j)(6) is in conflict with § 543.17(d)(4) and the entire key control process needs further clarification.
Response: Without further discussion, it is unclear what conflict the commenter sees. The Commission believes the provisions can be read harmoniously. Section 543.17(j)(6) restricts access to drop box release keys to the count team and authorized agents.
Section 543.17(j)(7) requires anyone using the keys outside of the scheduled drop and count time to be authorized—thereby becoming an authorized agent under (j)(6))—and documented. This allows for an emergency drop to be conducted by authorized agents so the drop team does not need to be called.
Section 543.17 (d)(4) requires drop boxes to be removed only at the time previously designated by the gaming operation and reported to the TGRA, but it specifically allows for emergency drops, which require surveillance and TGRA to be notified.
The rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule does not have an effect on the economy of $100 million or more. The rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, Start Printed Page 65508local government agencies or geographic regions, nor will the proposed rule have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of the enterprises, to compete with foreign based enterprises.
The information collection requirements contained in this rule were previously approved by the Office of Management and Budget as required by 44 U.S.C. 3501, et seq., and assigned OMB Control Number 3141-0009. The OMB control number expires on November 30, 2018.
The key control language proposed here is the most substantive of all the changes and was the subject of extensive consultation in 2012 (77 FR 58708). The language has not changed since initially adopted. It was inadvertently written over with the addition of kiosk controls in 2013, and this rule is to include the controls back into the regulations. The remaining changes are all technical in nature, correcting numbering and adding minor clarifications.
For the reasons discussed in the Preamble, the Commission amends 25 CFR part 543 as follows:
2. Amend § 543.10 by revising paragraph (e) to read as follows:
§ 543.10
3. Amend § 543.17 by revising paragraphs (d), (i)(4)(i), and (j) to read as follows:
§ 543.17
What are the minimum internal control standards for drop and count?
(2) Access to and return of keys or equivalents must be documented with the date, time, and signature or other Start Printed Page 65509unique identifier of the agent accessing or returning the key(s).
4. Amend § 543.18 by revising paragraph (d)(6)(v) to read as follows:
§ 543.18
What are the minimum internal control standards for the cage, vault, kiosk, cash and cash equivalents?
5. Amend § 543.23 by revising paragraph (c)(1)(viii) to read as follows:
§ 543.23
What are the minimum internal control standards for audit and accounting?
6. Amend § 543.24 by revising paragraphs (a) and (d)(5) to read as follows:
§ 543.24
What are the minimum internal control standards for auditing revenue?
(5) Complimentary services or items. At least monthly, review the reports required in § 543.13(c). These reports must be made available to those entities authorized by the TGRA or by tribal law or ordinance.
[FR Doc. 2018-27651 Filed 12-20-18; 8:45 am]