N.J. Admin. Code § 17:20-12.21 - Courier service audit and financial reporting and controls

(a) A courier service shall provide annually to the Division, no later than 120 days following the end of such courier service's fiscal year, financial statements audited in accordance with generally accepted auditing standards, unless the Director in writing waives such requirement. The Director may require, in addition, other financial information, in a format the Director prescribes. The preparation of annual or other financial statements shall be at the sole expense of the courier service.

(b) In addition to the courier service's audited financial statements, each courier service shall submit an SSAE 18 report annually no later than 120 days following the end of such courier service's fiscal year.

(c) Further, each courier service shall submit a copy of the management letter prepared by an independent certified public accountant that lists any internal control or operational weaknesses noted during the financial statement audit and recommendations for improvement. The courier service shall prepare a response to the issues outlined in the management letter that describes any corrective actions taken or planned to be taken and include a copy of this response with its submission to the Division.

(d) If a courier service or any of its affiliates is publicly held, such courier service or affiliate shall make available and provide written notice to the Division of any report, including, without limitation, forms S-1, 8-K, 10-Q, 10-K, proxy or information statements, and all registration statements required to be filed by such courier service or affiliates with the United States Securities and Exchange Division or other domestic or foreign securities regulatory agency, at the time of filing with such agency.

(e) The Division has the authority to conduct, or to have conducted at a courier service's expense, an audit or review of any of such courier service's financial controls and records.

(f) The courier service, including, but not limited to, courier trust accounts, courier customer accounts, courier service system, ticket processing records, shall be subject to both random and scheduled financial and/or operational audits by the Division and/or the Lottery's independent auditing firm, as well as any other authorized State or Federal entity. The courier service shall cooperate with any such audit. The Director may immediately suspend or revoke a courier service's registration for failure to cooperate with any such audit.

(g) The courier service software system shall be designed to generate reports as specified by the Division that shall include at a minimum:

1. The report title;

2. The version number of the current system software and report definition;

3. The date or time period of activity, or description "as of" a point in time;

4. The date and time the report was generated;

5. Page numbering, indicating the current page and total number of pages;

6. Subtotals and grand totals as required by the Division;

7. A description of any filters applied to the data presented in the document;

8. Column and row titles, if applicable; and

9. The name of the courier service.

(h) All required reports shall be generated by the system, even if the period specified contains no data to be presented. The report generated shall indicate all required information and contain an indication of "No Activity" or similar message if no data appears for the period specified.

(i) Systems shall provide a mechanism to export the data generated for any report to a format approved by the Division.

(j) A courier service system shall generate, on a monthly basis commencing 13 months after the creation of the first website or mobile account, a dormant account report, which shall list all courier customer accounts that have had no activity for a period of 13 months. The report shall include:

1. The courier customer name and account number;

2. The date of the last transaction; and

3. The account balance.

(k) A software system shall generate a Courier Customer Account Adjustments Report, which shall be reviewed on a monthly basis to evaluate the legitimacy of courier customer account adjustments. Unless otherwise authorized by the Division, the report shall at a minimum include:

1. The courier customer's name;

2. An account number;

3. The date and time of the adjustment;

4. The person who performed the adjustment;

5. The reason for the adjustment; and

6. The amount of the adjustment.

(l) All courier service lottery operations, reports, and records shall be subject, upon demand, to inspection and audit by representatives of the Lottery, but such reports and records shall remain confidential for all other purposes except income tax reporting required by law.

Notes

N.J. Admin. Code § 17:20-12.21

Adopted by 50 N.J.R. 1826(b), effective 8/6/2018