Lottery leaves money for gambler aid on table

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Since the audit was completed, a contract for treatment services has been awarded to the state Department of Alcohol and Other Drug Services, said Michael Sponhour, a spokesman for the State Budget and Control Board. He said officials are still examining what to do about establishing a hotline for gamblers, another service to be provided from the $1 million.

Lawmakers required that the first $1 million in unclaimed prizes from the lottery be spent on services to prevent and treat gambling disorders. The money has been available since November 2002, according to the audit.

Also unspent, according to the audit, was $2 million in grants to teachers to pay for courses to upgrade their skills or for master's degrees, $1.5 million for the National Guard Student Loan Repayment Program and $30 million for endowed chairs at universities.

According to the report, $29.9 million in the endowed chairs program, which requires matching funds, has been awarded but not yet distributed. The money thus far spent on teacher grants — $15,000 — was for a Web site for teachers to apply for the grants, according to the report. Another $2 million has since been allocated.

"This is fine if we were in a state with little problems and not many needs," said state Sen. Darrell Jackson, a Columbia Democrat. "But if you are at the bottom of the barrel, which South Carolina is, you don't take money and put it away for future projects when you have clear needs and problems right now."

Overall, the Legislative Audit Council reported, South Carolina's lottery has adequate controls and is managing its costs well. While noting that the Lottery Commission's administrative costs are under the cap established by law, the LAC recommended the agency reduce the number of cell phones and re-evaluate the agency's use of vehicles.

John C.B. Smith, chairman of the Lottery Commission, told auditors that he welcomed the 59-page report and the agency would implement auditors' recommendations.

The Lottery Commission employs 129 people and sells tickets through 3,545 stores.

The lottery began sales in January 2002. Some $724.3 million in tickets were sold in the fiscal year ending in July. After prizes and retailers were paid, the state spent $47 million on advertising and gaming contracts, according to the audit.

About a third of the net proceeds went for primary and secondary education programs, while 60 percent was spent on higher education, including $50.8 million for the LIFE, HOPE and Palmetto Fellows Scholarships.