11/08/2023 - Jefferson City, MO
A new report released by State Auditor Scott
Fitzpatrick details how the Missouri State Lottery Commission (Lottery) has
seen lottery proceeds increase significantly in recent years despite diminished
funding for its advertising budget.
"The best way to measure the success of the
Lottery program is by the amount transferred to support public education each
year, and the fact is revenue to education has skyrocketed while advertising
expenditures have plummeted. Allocating taxpayer resources responsibly and to
the benefit of Missourians is a solemn task, and I hope the Governor and the
General Assembly find this report informative," said Auditor Fitzpatrick.
The comprehensive audit notes the Lottery has seen funding
for its advertising budget decrease by approximately $16.7 million since 2018
while transfers of Lottery proceeds to education have increased by more than
$53 million in the same period of time. For Fiscal Year 2023, the lottery had
an advertising budget of just under $800,000 but transferred approximately
$386.4 million to education.
The audit points out that Missouri's
current advertising budget of 0.02 percent of sales is the smallest advertising
budget of any of the 45 states (plus the District of Columbia) that sponsor a
lottery. The national average advertising budget is 1.07 percent, and the eight states contiguous to Missouri
average 1.31 percent of sales.
The audit explains that while Lottery officials cannot determine
if the reduction in advertising had a definitive impact on sales, they say
market studies have already begun to show reductions in overall awareness of
the Lottery and in the public's perception of Lottery activities. The audit
recommends the Lottery
continue to work with the Legislature to evaluate the impact of advertising and
sponsorship spending on Lottery sales.
The
report also found the Lottery had a conflict of interest when it entered
into a sponsorship agreement in 2021 with a not-for-profit entity while the
Lottery's Community Relations Manager, who was responsible for overseeing
sponsorships, was a member of the not-for-profit entity's board of directors.
Another finding notes the Lottery is at increased risk of
potentially improper purchases because it does not always use purchase
requisitions as required by its established purchasing procedures.
The audit gives the Missouri State
Lottery Commission a rating of "good." A previous audit of the
Lottery in 2020 gave the Commission a rating of "excellent," the
highest available.
The complete audit of the Missouri
State Lottery Commission can be found here.
