Local Politics

Audit: Lottery accepted goods from vendor

Posted June 20, 2012

— The North Carolina Education Lottery accepted televisions, DVD players and extra lottery equipment from its primary vendor instead of assessing monetary damages for any breakdowns in the lottery system, according to an audit released Wednesday.

The lottery's contract with GTECH Corp., which provides the statewide system for issuing and tracking lottery tickets, calls for the state to withhold payments to the company to compensate for any downtime in the ticket system and other delays.

From the lottery's inception in March 2006 through the end of last June, the lottery should have assessed $460,804 in damages to GTECH, according to the audit. Instead, the lottery reduced that total by $278,432 in exchange for goods and services like TVs and DVD players for regional claims offices, a dozen instant-ticket vending machines, retailer training meetings and equipment for the lottery test lab.

The remaining $182,372 of the damages wasn't collected until this year, after State Controller David McCoy reminded lottery officials that they were legally required to dock GTECH for non-performance on its contract, according to the audit.

"The idea of getting game machines, televisions, DVDs in trade for penalties instead of cash, that's really not good policy," said Dennis Patterson, a spokesman for the State Auditor's Office.

"(State) policy says the penalty needs to be paid in cash," Patterson said. "It's not a barter system where you give us something for the money."

Lottery tickets Lottery officials say they acted in state's best interests

Robert Farris, chairman of the lottery commission, said in a formal response to the audit that auditors never raised the issue of accepting goods and services when they reviewed the agency's contracts two years ago. He said the practice is common among lottery systems nationwide, and officials were doing what they thought was in the best interests of North Carolina.

"We feel all these expenditures were good expenditures used to sell lottery tickets, promote lottery, raise money for education," lottery spokesman Van Denton said, adding that the state would have to buy the instant-ticket machines anyway.

Auditors also noted that lottery officials never documented the value of the 12 instant-ticket machines to ensure that they were worth the $195,300 discount given to GTECH. Farris responded by saying it's difficult to get an external value of the machines since each state uses different configurations, so they rely on GTECH's valuation estimates.


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  • superman Jun 21, 2012

    The Governor aint doing so good. She is captain of the ship and the ship is sinking. What is the best way to get to Mississippi?

  • dollibug Jun 21, 2012

    One example of corruption and cover up would be....a person being indicted on charges where there is NO EVIDENCE TO BEGIN WITH....as with the John Edwards case. JE was indicted on several charges, tried without the jurors convicting him. And I think that they were really trying to *find something to convict him of*...BUT according to the LEGAL AND LAWFUL matters....there was NOTHING THERE....someone in WASHINGTON pushed this although they KNEW that there was nothing there....perhaps they hoped that the juror would NOT know better and convict him anyway....so a lot of wasteful spending....the only good that came from this was the money which was paid for the media to park....this money went to URBAN MINISTRIES....otherwise, all of the time, effort and money only make some attorneys happy to be a part of the *shenanigans*....

  • LocalYokel Jun 21, 2012

    Were the televisions and DVD players received by the Edumacation Lottery given to schools?

  • RTPMedic Jun 21, 2012


    Nixon? Hmmmm, ok.
    Barney Frank, James McGreevey, Sandy Berger, Dan Rostenkowski, John Murtha, James Traficant, James Guy Tucker, Web Hubbell, Rod Blagojevich, the Clinton's...to name a few.

    GOP's not much better...but, their past is not quite as extensive as this.

  • RTPMedic Jun 21, 2012

    Any of these folks going to jail like Meg Scott did?

  • keneds Jun 20, 2012

    Nothing but crooks everywhere you turn if N C is involved....maybe not crooks as much as people not being accountable

  • Itchy Willy Jun 20, 2012

    When you actually pay attention to the story and read more into, this isn't corruption. Of course, simple minds love it. It's great fodder. Of course, simple minds also cannot fathom corruption being prevalent everywhere. We here about it in politics because it is open to scrutiny. It's in private business too, but much easier to cover up and deal with there.

    But this is what America has become, a bunch of simple minds with blinders on not able to see what is happening in all areas of politics and society.

  • piene2 Jun 20, 2012

    "More democrat corruption. Nothing new

    Thank you Richard M. Nixon

  • storchheim Jun 20, 2012

    It seems Alamance Community College had no problem with hiring her to teach American Womens Studies from August 07 thru Dec 10. Unless that LinkedIn profile is a different Meg Scott Phipps than the one who grew up in Alamance County.

  • Southern Discomfort Jun 20, 2012

    "More democrat corruption. Nothing new" -arfamr1007

    LOL. I bet y'all praise Glory Be to the Republican run lottery in South Carolina? NC ain't got nothing on the mess south of the border.