National Lotteries Commission - Integrated Report 2017/18 - Accounting Authority’s Report for the National Lotteries Commission

The National Lotteries Commission Accounting Authority presents its tenth annual report, which is supplementary to the audited annual financial statements of the National Lotteries Commission (NLC) and the National Lottery Distribution Trust Fund (NLDTF) for the year ended 31 March 2018.

1.	NATURE OF OPERATIONS
	The NLC is a regulator of the National Lottery. Ithuba (Pty) Ltd is a private company that currently operates the National Lottery under a licence from the government which commenced on 1 June 2015. The Operator pays a percentage of the revenue from ticket sales to the NLDTF in terms of the Licence agreement. These proceeds are destined for good causes as stipulated in the Lotteries Act No 57 of 1997 (Lotteries Act) as amended and allocated to deserving applicants by Distributing Agencies appointed by the Minister of Trade and Industry. The NLC manages the NLDTF and NLDTF transfers the necessary running costs to the NLC. The NLC withdraws the necessary funds required from the NLDTF, based on the overall annual budget approved by the Minister of Trade and Industry.

2.	STATEMENT OF RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
	To the best of our knowledge and belief, we confirm the following:
	All information and amounts disclosed in the annual report is consistent with the annual financial statements audited by the Auditor-General. The annual financial statements are complete, accurate and free from any omissions. The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury. The annual financial statements have been prepared in accordance with the South African Standards of Generally Recognised Accounting Practice applicable to the NLC. The accounting authority is responsible for the preparation of the annual financial statements and for the judgements made in the financial statements. The accounting authority is responsible for establishing and implementing a system of internal control that has been designed to provide reasonable assurance to the integrity and reliability of the performance information, the human capital information and the annual financial statements. The Auditor-General is engaged to express an independent opinion on the annual financial statements. In our opinion, the annual financial statements fairly reflect the financial affairs of the NLC and NLDTF for the financial year ended 31 March 2018.

3.	OPERATING AND FINANCIAL REVIEW
	The NLC’s objectives are prescribed in the Lotteries Act. The main objectives of the NLC are to regulate all lotteries and sports pools with integrity; to ensure the protection of all participants; and to distribute funds equitably and expeditiously. It is the NLC’s continuous aim to meet or exceed these objectives. The Chairperson’s report covers all accomplishments in greater detail. Functions directly related to the Lotteries Act, and the business plans are predominantly on track.


4.	MATERIALITY FRAMEWORK IN TERMS OF TREASURY REGULATION 28.1.5
	For purposes of ‘material’ (sections 50(1), 55(2) and 66(1) of the Public Finance Management Act) and ‘significant’ (section 54(2) of the Public Finance Management Act), the Accounting Authority developed and agreed on a framework of acceptable levels of materiality and significance. Overall materiality for the period under review was agreed as 1% of audited total assets and 0.05% of audited total revenue.

5.	APPROVAL OF FINANCIAL STATEMENTS
	The financial statements set out here for the NLC and here for the NLDTF were approved by the Accounting Authority on 30 May 2018 and are signed on their behalf.

Prof N A Nevhutanda
Chairperson of the Board

26 July 2018