Accounting Services

1. Accounting Services Module Four: Accounting Revised 03/31/2011

2. Responsible For…. • Answers quarterly report and charitable distribution related inquiries • Processes all incoming mail • Maintains bingo election results • Monitoring money transfers into the organization’s bingo account • Records all license fees, bond, prize fees and gross rental tax payments • Collects outstanding liabilities • Verifying Unit Trust agreements for compliance

3. Also, Responsible For…. • Monitors the charitable disbursement requirements, authorized operating capital allowances and ensures compliance • Records and processes all quarterly reports • Works with organizations to correct all errors found on their reporting • Maintains, processes and makes demands on bonds / securities as necessary • Processes requests to exceed operating capital and net proceeds waivers, and • Updates the delinquent purchaser list

4. Texas Bingo Quarterly Report • This report captures for a three month period: • Game attendance • Gross receipts • Prizes • Rental income for conductor/lessors • Expenses • Charitable distributions • Prize fees withheld • Bingo account balances • Helps determines Authorized Operating Capital amounts (Bingo Bank Account limits)

5. Texas Bingo Quarterly Report* • Quarterly Report figures are used to: • Calculate annual license fees • Calculate minimum charitable distribution requirement • Validate that each organization submitted the correct amount of prize fees • Show net proceeds • Analyze industry trends *New QR format used for 1st Qtr 2010 !

6. Texas Bingo Quarterly Report • Mailed to each organization approximately 30 days before the due date. • Each organization is responsible for filing timely • Ensure your mailing address is kept current. You’ve Got Mail…maybe!

7. Quarterly Filing Periods & Due Dates 1st Quarter January 1 - March 31 Report due: April 25th 2nd Quarter April 1- June 30 Report Due:July 25th 3rd Quarter July 1 - September 30 Report Due: October 25th 4th Quarter October 1 - December 31 Report Due: January 25th

8. Filing Extensions • The Bingo Director may grant the licensee who is the victim of a natural disaster an extension up to 90 days to file their report or pay their rental tax or prizes fee. • The Bingo Director may grant an extension up to 30 days for filing the quarterly report for reasons other than a natural disaster.

9. Completing the new 2010 Quarterly Report Reminders ! • Round your figures and use whole dollars only. • Line 8 (Gross Receipts and Bingo Prizes Awarded) cannot be zero if you conducted bingo within the quarter. • All line items should be completed. If an expense line item is not applicable, please enter “0” into the field. • Carefully double-check the entries

10. Please do NOT include other paper work such as sales journals or cash disbursement journals. Please remember to write legibly Please remember to INCLUDE all the pages of the quarterly report. Please do NOT use staples. When Filing a Quarterly Report: 5 6 ? ? 7 9 WHAT is this suppose to be?

11. When Filing a Quarterly Report: • Ensure that the report is signed. • Include a specific contact name and phone number. • Always keep a copy of the report for your records.

12. Administrative Hold Filing Requirements • If the organization had an active license they will have to file a quarterly return even if they did not conduct any bingo occasions. • If your organization is in Admin Hold you must file a quarter report return. Licensed, but not conducting bingo games

13. Filing Electronically • The electronic version of the quarterly report with incorporated schedules are located on our website in the Licensees, Conductor and Quarterly Reports menu list. • “Electronic Funds Transfer” (EFT) as authorized by HB 1474 will not be implemented for several quarters

14. Filing Electronically Revised February 2010 • Use the Automated Forms Manual to submit the quarterly report via e-mail.

15. Filing Electronically • Use the electronic version of the quarterly report in Excel format and submit via e-mail • New, revised forms for use in reporting 1st Qtr, 2010

16. Filing Electronically • Use the electronic version of the quarterly report in Excel format and submit via e-mail to: bingo.reports@lottery.state.tx.us • Mail the payment coupon with the payment to the Commission. • Keep a copy of the e-mail transmittal information. • Currently, only about 50 licensees file electronically each quarter. E-mail

17. Payments-a few reminders • Ensure that all required signatures are on the check. • Ensure that the numerical amount matches the written dollar amount on the check. • The dollar amount of check must match the total on Line 13a (Total Amount Due) of the quarterly report. • Send only one check with each quarterly report. • Make checks payable to the “State Comptroller.”

18. Did You Receive My Report? www.txbingo.org • You may validate that a report was received by viewing the Conductor Quarterly Report available by clicking on the Statewide Financial Reports icon on the website.

19. Report Copies • Q: Can I get copies of previously filed quarterly reports or copies for my organization that I have misplaced? • A: Yes. Financial information is available on the Bingo Services Center for authorized users. You may also get copies of the original signed report by making an Open Records Request.

20. Adjustment Letters ???

21. Adjustment Letters • The most common reasons for an adjustment to the quarterly report include: • Addition errors • A line item was not completed or the whole second page of the report is left blank • Line 42 doesn’t match line 35

22. Adjustment Letters • If the adjustment made is not correct: • Mark the correction(s) in red ink • Write AMENDED at the top of the quarterly report • Submit the amended report back to our office

23. Amending a Quarterly Report Amended AMENDED New Form February 2010 !

24. Filing Late • What happens if you don’t get your quarterly report and payment in before the deadline?????

25. Filing Late • An organization with a jeopardy determination is assessed an additional 10% penalty and must have a bond posted. • The required bond amount is three times the highest quarterly prize fee liability for the four most recent quarters or the highest quarter filed if less than four reports are available

26. Filing Late • The total penalty at this time amounts to 20%. • Issuing a Show Compliance Letter is the first step in seeking administrative action against the licensee for the outstanding liability or non-compliance issues.

27. HOT CHECKS Yikes! Our check bounced!

28. 3 Strikes and You are OUT! And the possibility of a $100 administrative penalty per late filing---ouch!

29. Waiver of Penalty • For good cause, the Charitable Bingo Operations Director may waive a penalty. • To be considered: 1) the principal amount must be paid in full, 2) a written request for a waiver must be received within 14 days of the quarterly report due date, 3) Must have a good tax paying record, and • 4) No waiver has been granted within the last 8 consecutive quarters.

30. Charitable Distributions • Must use net proceeds from bingo for purposes that are consistent with their 501c exemption. • Non-501c exemption organizations must use bingo net proceeds for purposes that qualified them as authorized organization under the Act. • Consider getting approval for the use of funds, in writing, from the IRS.

31. Authorized Operating Capital Limit (OCL) • During quarter 20094, each licensed conductor had their initial “OCL” calculated • Effective 1st quarter 2010, organizations must begin complying with “OCL” • HB 1474 gives a set time frame to disburse funds in excess of “OCL” • OCL is recalculated each year during the quarter in which license period starts Organization’s (maximum) authorized operating capital limit. Must disburse all other funds in excess of this amount. Average bingo expense per quarter Hypothetical Example Only

32. WHY is the Operating Capital Limit Important? • Determines maximum amount of funds in bingo account* • Determines the amount of charitable distribution an organization or unit must make quarterly * Bingo Account funds may be transferred between the bingo checking account, bingo savings account and petty cash; however, the amounts all count toward their Operating Capital Limit.

33. In Compliance with Operating Capital Limits… • The bingo account balance, on the last day of each calendar quarter (beginning 20101) may not exceed the total of: • Organization’s retained operating capital limit, • Prize fees held in the bingo account to be paid to the Commission with the quarterly report due the 25th of the following month, • Net proceeds from the conduct of bingo for the current quarter. NOTE: Some organizations had an excess balance of undistributed net proceeds on October 1, 2009. HB 1474 allows these organizations 1-3 years to distribute these funds. If the required distribution date has not passed, those funds may remain in the account also.

34. Can we INCREASE the Operating Capital Limit? YES, If… The organization is in their first year of original license, or The organization has experienced unusual circumstances beyond control of organization that makes increase necessary, or Increasing the operating capital will further a credible business plan for the conduct of bingo or for the organization’s existing or planned charitable purposes. See AR 402.453 (effective 7/5/2010) for more information.

35. Show Compliance Letter • Show Compliance Letters are sent for: • Failing to meet the distribution requirement • Failing to post a bond • Failing to pay prize fees or rental tax • Failure to file quarterly report • Failure to have met net proceeds from their being operation • Failure to be in compliance with OCL.

36. Prize Fee Allocations • Local city and county jurisdictions benefit from the conduct of bingo in the form of allocations received from Charitable Bingo prize fees.

37. Prize Fee Allocations 1.25% each if shared 1.25% 5% 2.5% 0% if no election to participation 2.5% if not shared,

38. Prize Fee Allocations for 2010 Cities $5,913,149Counties $6,440,267 TOP 5 Cities Counties • San Antonio $ 936,758 • Austin $ 300,465 • Fort Worth $ 300,373 • Lubbock $ 299,092 • Corpus Christi $ 283,184 • Bexar $ 962,050 • Harris $ 586,633 • Dallas $ 585,445 • Tarrant $ 563,586 • Bell $ 479,512

39. Delinquent Purchaser List • The Delinquent Purchaser List is a list of those organizations who have failed to pay their distributor for bingo equipment or supplies within thirty days of their delivery. (Rule 402.604 Delinquent Purchaser effective February 10, 2009)

40. Delinquent Purchaser List • The Charitable Bingo Operations Division sends out this list of all delinquent organizations to the licensed distributors weekly. • Once on this list, the distributor may only sell bingo equipment and supplies to the organization on a COD basis. • If a member of the unit is on the delinquent purchaser list prior to joining the unit, the unit is considered delinquent.

41. Delinquent Purchaser List (DPL) • Organizations and units are removed from the delinquent purchaser list once the distributor informs our office that the liability has been paid. Remember! Units are treated as an entity—if one unit member is on the DPL, if effects the entire unit.

42. Loans NO MORE ! • HB 1474 did away with the concept of “approved loans” from the organization’s general fund into the bingo account. • Approval from Commission not necessary, BUT Commission must be notified within 14 days of the transfer.

43. Transfer of (Non-Bingo) Funds- Commission Notification • Simple Notification • Date of Transfer • Amount of Transfer • Balance of Bingo Bank Account Prior to Transfer • Amount of All Prize Fees Held in Escrow • Then on the Quarterly Report… • Use Line 31 to report when the funds were received and transferred into the bingo account as well as transfer of funds from the bingo account. New Form September 2009

44. Need Help? Bingo Chairperson 1-800-246-4677 E-mail: bingo.services@lottery.state.tx.us