13 Miss. Code. R. 7-5.1 - Internal Control Procedure

(a). Each licensee shall establish administrative and accounting procedures for the purpose of exercising effective control over the licensee's internal fiscal affairs. Minimum procedures for adoption by each licensee shall include, but are not limited to, and are designed to reasonably ensure that:

1. Assets are safeguarded;

2. Financial records are accurate and reliable;

3. Transactions are performed only in accordance with management's general or specific authorization;

4. Transactions are recorded adequately to maintain accountability for assets;

5. Access to assets is permitted only in accordance with management's specific authorization;

6. Recorded accountability for assets is compared with actual assets at reasonable intervals and appropriate action is taken with respect to any discrepancies; and

7. Functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound practices by competent, qualified personnel.

(b). Each licensee and each applicant for a license shall describe its administrative and accounting procedures in detail in a written system of internal control. Each licensee and applicant for a license shall submit a copy of its written system to the Mississippi Gaming Commission at least six (6) weeks before gaming begins at its establishment. Each written system must include:

1. An organizational chart depicting appropriate segregation of functions and responsibilities;

2. A description of the duties and responsibilities of each position shown on the organizational chart, as well as the names of each key employee by position;

3. A detailed, narrative description of the administrative and accounting procedures designed to satisfy the internal control requirements;

4. A written statement signed by the licensee's chief financial officer and either the licensee's chief executive officer or a licensed owner attesting that the system satisfies the internal control requirements;

5. A letter from an independent accountant stating that the applicant's written system has been reviewed by the accountant and complies with the requirements of this section; and

6. Any such other items as the Executive Director may require.

(c). The licensee may not implement a system of internal control procedures that does not satisfy the stated minimum standards unless the Executive Director, in his sole discretion, determines that the licensee's proposed system satisfies the requirements and approves the system in writing. Within thirty days after a licensee receives notice of the Executive Director's approval of procedures that satisfy the internal control requirements, but that do not satisfy the minimum standards, the licensee shall comply with the approved procedures, amend its written system accordingly, and submit to the Executive Director a copy of the written system as amended and a written description of the variations signed by the licensee's chief financial officer and either the licensee's chief executive officer or a licensed owner.

(d). Annually, each licensee shall require the independent accountant engaged by the licensee to examine the financial statements as provided in Regulation E to submit to the licensee two copies of a written report concerning licensee's compliance with the procedures and written system of minimum internal control standards. The independent accountant shall report each event and procedure discovered by or brought to the accountant's attention that the accountant believes does not satisfy the minimum standards or variations from the standards that have been approved by the Executive Director. Not later than three months after the end of the licensee's business year, the licensee shall submit a copy of the accountant's report or any other correspondence directly relating to the licensee's systems of internal control to the Executive Director accompanied by the licensee's statement addressing each item of noncompliance noted by the accountant and describing the corrective measures taken.

(e). Before adding or eliminating a counter game, eliminating all table games, adding any computerized system that affects the proper reporting of gross revenue, adding any computerized system for monitoring slot machines or other games, or any other computerized associated equipment, the licensee must:

1. Amend its accounting and administrative procedures and its written system of internal control to comply with the minimum standards;

2. Submit to the Executive Director a copy of the written system as amended, and a written description of the amendments signed by the licensee's chief financial officer and either the licensee's chief executive officer or a licensed owner;

3. Comply with any written requirements imposed by the Executive Director regarding administrative approval of computerized associated equipment; and

4. After paragraphs (a) through (c) have been complied with, implement the procedures and written system as amended.

(f). If the Executive Director determines that a licensee's administrative or accounting procedures or its written system does not comply with the requirements of this section, the Executive Director shall so notify the licensee in writing. Within thirty days after receiving the notification, the licensee shall amend its procedures and written system accordingly, and shall submit a copy of the written system as amended and a description of any other remedial measures taken.

(g). A separate internal audit department (whose primary function is performing internal audit work and who is independent with respect to the departments subject to audit) will be maintained by the licensee. For two or more licensees, or a licensee who may have an affiliated company licensed in another jurisdiction, who essentially have common ownership and/or management, a single internal audit department for the combined properties is adequate. The internal audit is required to develop quarterly reports providing details of all exceptions found and subsequent action taken by management to correct. Such report will include a written response from management. Documentation (e.g. checklists, programs, reports, etc.) will be prepared to evidence all internal audit work performed as it relates to these requirements. The quarterly Internal Audit Reports, along with the licensees responses, shall be submitted to the Mississippi Gaming Commission no later than thirty (30) days after the end of the calendar quarter. The results of internal audit work will be reported to management or ownership personnel who are independent of the departments under audit. All material exceptions resulting from internal audit work must be investigated and resolved, with the results of such being documented and retained for three years.

(h) If changes are proposed to the approved system of internal controls, they must be submitted to the Gaming Commission a minimum of fifteen (15) days prior to the intended implementation date, and may not be implemented without written approval of the Executive Director. (Adopted: 04/21/1994; Readopted: 04/29/1995; Amended: 12/18/1997; Amended: 02/24/1998; Amended: 06/15/2006.)

Notes

13 Miss. Code. R. 7-5.1

Miss. Code Ann. §§ 75-76-45, 75-76-47, 75-76-49