74-8707. Financial-compliance and security audits. (a) The accounts and transactions of the Kansas lottery and the Kansas lottery commission shall be subject to an annual financial-compliance audit, and such other audits as directed by the legislative post audit committee, under the legislative post audit act. The annual audit shall be conducted as soon after the close of the fiscal year as practicable. The auditor to conduct this audit work shall be specified in accordance with K.S.A. 46-1122, and amendments thereto. If the legislative post audit committee specifies under such statute that a firm, as defined by K.S.A. 46-1112, and amendments thereto, is to perform all or part of such audit work, such firm shall be selected and shall perform such audit work as provided in K.S.A. 46-1123, and amendments thereto, and K.S.A. 46-1125 through 46-1127, and amendments thereto.

The post auditor shall compute annually the reasonably anticipated cost of providing audits pursuant to this subsection, subject to review and approval by the contract audit committee established by K.S.A. 46-1120, and amendments thereto. Upon such approval, the Kansas lottery shall reimburse the division of post audit for the amount approved by the contract audit committee. The furnishing of audit services pursuant to this subsection shall be a transaction between the post auditor and the Kansas lottery and shall be settled in accordance with the provisions of K.S.A. 75-5516, and amendments thereto.

(b) On or before December 31, 2004, and at least once every three years thereafter, there shall be conducted a security audit of the Kansas lottery. A security audit shall include a comprehensive study and evaluation of all aspects of security in the operation of the Kansas lottery. The auditor to conduct a security audit shall be specified in accordance with K.S.A. 46-1122, and amendments thereto. If the legislative post audit committee specifies under such statute that a person, as defined by K.S.A. 46-1112, and amendments thereto, other than the post auditor is to perform all or part of such audit work, such person shall be selected and shall perform such audit work as provided in the applicable provisions of K.S.A. 46-1123, and amendments thereto, and K.S.A. 46-1125 through 46-1127, and amendments thereto. The person selected to perform a security audit shall be experienced in security procedures, including, but not limited to, computer and systems security. A contract to conduct a security audit required by this subsection, shall be considered a major procurement contract as defined by K.S.A. 74-8702, and amendments thereto, and shall not be awarded until a background investigation is conducted on the person or firm selected to perform the audit. Such background investigation shall be subject to the requirements of subsection (c) of K.S.A. 74-8705, and amendments thereto.

For the purpose of conducting a security audit under this subsection, a person or a firm selected to perform the security audit shall not be limited to a legal entity permitted by law to engage in practice as a certified public accountant.

The post auditor shall compute the reasonably anticipated cost of providing audits pursuant to this subsection, subject to review and approval by the contract audit committee established by K.S.A. 46-1120, and amendments thereto. Upon such approval, the Kansas lottery shall reimburse the division of post audit for the amount approved by the contract audit committee. The furnishing of audit services pursuant to this subsection shall be a transaction between the post auditor and the Kansas lottery and shall be settled in accordance with the provisions of K.S.A. 75-5516, and amendments thereto.

History: L. 1987, ch. 292, § 7; L. 1993, ch. 10, § 2; L. 2001, ch. 24, § 3; July 1.