Lottery failed to fully fund schools, according to state auditor report |

Lottery failed to fully fund schools, according to state auditor report

Sam Corey
Staff Writer

To read the state auditor’s report, click here.

Back in 1984, California voters passed Proposition 37, mandating the California State Lottery to invest a portion of its revenue in California’s schools.

In February, the California state auditor found that during the 2017-18 school year, the lottery had not fully complied with that requirement.

A report by the state auditor found that during the 2017-18 school year the California State Lottery did not distribute $36 million for education funds, failing to increase education funding in proportion to its increase in net revenue.

Additionally, the report found that the lottery paid “excessive costs for food and beverage” by entering inappropriate retailer trade show agreements that cost an aggregate $720,000. The report also claims the State Controller’s Office, the lottery’s primary oversight body, did not properly do its job in overseeing the agency.

Both the State Controller’s Office and lottery agency disagreed with the report’s conclusions.

Despite the report’s conclusions, Nevada County Superintendent Scott Lay was not confident state schools would ever see the funds misplaced by the lottery.

During the 2017-18 school year, there were about 11,330 students in Nevada County, which would amount to about $65,487 for the county’s district and charters if the money were distributed, according to Lay.

“It looks like (the California state auditor) doesn’t have the authority to make them pay it back, only suggest they do so,” Lay wrote.

Still, the county superintendent was somewhat hopeful the report could add a small boost for future school funding if changes are made at the lottery and State Controller’s Office.

“What it might do is allow for additional funding in the future if they change their operational method,” wrote Lay.

The report recommends the state Legislature require the lottery to pay $36 million to California schools and to require the State Controller’s Office to conduct frequent audits of the lottery’s procurement process.

State Sen. Brian Dahle, R-Bieber, supported the report, and advocated that if, after a deeper analysis, the report’s findings are true, California’s schools should receive the $36 million.

“They need to pay the money to the schools, obviously,” said Dahle.

To contact Staff Writer Sam Corey, email or call 530-477-4219.

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