Performance
Sikkim

Report No.1 of 2017 - Performance Audit on Sikkim State Lotteries Government of Sikkim

Date on which Report Tabled:
Tue 30 Jan, 2018
Date of sending the report to Government:
Government Type:
State
Sector Finance

Overview

The Report of the Comptroller and Auditor General of India on Sikkim State Lotteries for the year ended March 2016 has been prepared for submission to the Governor of Sikkim under Article 151 (2) of the Constitution of India for being laid before the State Legislature. The Report covering the period 2010-16 contains results of performance audit on Sikkim State Lotteries. The audit methodology consisted of issue of questionnaires, examination of records/reports etc., available with Directorate of Sikkim State Lotteries and the Marketing Agents (MA), joint site visits to Points of Sale, Central Servers, etc.

The PA revealed that the appointment of MAs for marketing lotteries lacked transparency and consistency. Against total sale proceeds of ₹ 44,834.87 crore during MAs deposited ₹ 628.74 crore to the Government Account constituting only 1.40 per cent of the total sale proceeds. The net revenue as MGR realised by the State after meeting the expenses on draw, printing costs of lottery tickets, prize money above ₹ 10,000 etc. constituted a mere 0.40 per cent of the sale proceeds.

The internal control system in the Department was weak. All schemes were prepared by the MAs themselves while the Department approved the schemes without any vetting. Further, the MAs were authorised to distribute prizes upto ₹ 10,000 but there was no system to verify the authenticity of distribution of such prizes. The MAs were never asked to submit audited statement of accounts, there was no system for proper verification of submitted accounts/records and for periodical inspection of accounts of distributor/area distributor etc.

Monitoring of the activities of the distributors or their sub-agents to detect illegalities/irregularities was found lacking. Despite running Online Lotteries since August 2001 for more than 14 years, the Directorate of Sikkim State Lotteries did not have any expert on Information and Communication Technology (ICT) on its roll. The entire operation of Online Lotteries was run by the MAs using application software, computer programmes and internet networks of their own choice without prescription of any norms and standards by the State.

The Central Servers were located in Mumbai in data centres of the MAs’ own choice, in contravention of Lottery Rules, 2010 which provide that it should be located within the State. Annual finance and systems audit of the various lottery schemes organised by the MAs had not been conducted so far (July 2017) as necessitated by the Lottery Rules, 2010.

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