COLUMBIA - An audit of the state's nearly 2-year-old lottery found only a few areas for improvement in cost controls.

The S.C. Education Lottery agreed with almost all the recommendations made in the audit released Tuesday and has implemented many of them, wrote commission Chairman John C.B. Smith Jr. in his response.

The lottery has kept costs below the statutory maximum of 15 percent of revenues but should look at cell phone and car usage for potential cost savings, the audit said. Smith said the lottery is constantly evaluating its costs.

The audit also found the agency has doled out money according to law, except for unclaimed prize money. The first $1 million of that money was to go to assisting in treatment of gambling disorders, but the audit said the contract had not been awarded as of August.

Frank Fusco, executive director of the State Budget and Control Board, said a contract has been awarded to the Department of Alcohol and Other Drug Abuse Services for treatment of gambling disorders.

The audit recommended law changes to lift advertising restrictions and to lower the threshold from $5,000 at which the state can withhold prize money for debt collection.

But there still are areas where the lottery could cut costs, such as the amount of money going to prizes and overhead, said Gov. Mark Sanford.

Under state law, the total amount of operating expenses and retailer commissions cannot exceed 15 percent of total sales. The lottery's total was 13 percent in state fiscal year 2003.

Of that, 7 percent went to commissions paid to lottery retailers - a rate that is higher than average, the audit states.