Licensees shall have internal control procedures
independently audited at least once every two years with the results documented
in a written report, which shall be maintained and available to the commission.
This requirement includes internal control procedures conducted by a sports
wagering services provider on behalf of the licensee. The following apply to
independent audits:
(1) Independent
audits may be conducted by the commission, or a commission approved third-party
auditor. The commission may, in its discretion, allow for an internal audit
department within the licensee or parent company of the licensee, which is
independent of the sports wagering operation, to serve as a third-party auditor
for use in completing this audit;
(2) The commission, or third-party auditor
shall be responsible for auditing the licensee's compliance with SDCL chapter
42-7 B and chapter 20:18:35, including those adopted in appendix A of GLI-33,
the internal control system, and any other applicable rules and
regulations;
(3) Documentation,
including checklist, programs, reports, corrective actions, and other items,
must be prepared to evidence all independent audit work performed as it relates
to the requirements of this section, including all instances of
noncompliance;
(4) Independent
audit reports must include objectives, procedures and scope, findings and
conclusions, and recommendations;
(5) Independent audit findings must be
reported to management. Management shall respond to the independent audit
findings and shall state the corrective measures to be taken to avoid
recurrence of the audit exception. Such management responses must be included
in the final independent audit report;
(6) Follow-up observation and examinations
must verify that corrective action has been taken regarding all instances of
noncompliance cited by the independent audits, or by the commission. The
verification must be performed within six months following the date of
notification; and
(7) Where
approved by the commission, a licensee may leverage the results of prior audits
conducted within the two-year period by the same third-party auditor in another
sports wagering jurisdiction. Such leveraging must be noted in the audit
report. This leveraging does not include any internal control procedures unique
to the state, which require new audits.
