238.550 Standards for management and accounting of funds -- Reports --
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/ky/238-550A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Charitable gaming expenses.
(1)All adjusted gross receipts from charitable gaming shall be handled only by
chairpersons, officers, or employees of the licensed charitable organization.
(2)Except as authorized by subsection
(11)of this section, within five
(5)business
days after the completion of a charitable gaming event or session, all gross receipts
and adjusted gross receipts shall be deposited into one checking account devoted
exclusively to charitable gaming. This checking account shall be designated the
"charitable gaming account," and the licensed charitable organization shall maintain
its account at a financial institution located in the Commonwealth of Kentucky. No
other funds may be deposited or transferred into the charitable gaming account.
(3)All payments for charitable gaming expenses, payments made for prizes purchased,
and any charitable donations from charitable gaming receipts shall be made from
the charitable gaming account and the payments or donations shall be made only by
bona fide officers of the organization by checks having preprinted consecutive
numbers and made payable to specific persons or organizations. No check drawn on
the charitable gaming account may be made payable to "cash," or "bearer," except
that a licensed charitable organization may withdraw start-up funds for a charitable
gaming event or session from the charitable gaming account by check made payable
to "cash" or "bearer," if these start-up funds are redeposited into the charitable
gaming account together with all adjusted gross receipts derived from the particular
event or session. Checks shall be imprinted with the words "charitable gaming
account" and shall contain the organization's license number on the face of each
check. Payments for charitable gaming expenses, prizes purchased, and charitable
donations may be made by electronic funds transfer if the payments are made to
specific persons or organizations. The corporation may by administrative regulation
adopt alternative reporting requirements for charitable gaming of limited scope or
duration, if these requirements are sufficient to ensure accountability for all moneys
handled.
(4)A licensed charitable organization shall expend net receipts exclusively for
purposes consistent with the charitable, religious, educational, literary, civic,
fraternal, or patriotic functions or objectives for which the licensed charitable
organization received and maintains federal tax-exempt status, or consistent with its
status as a local school district, a common school, an institution of higher education,
or a state college or university. No net receipts shall inure to the private benefit or
financial gain of any individual.
(5)Accurate records and books shall be maintained by each organization exempt from
licensure under KRS 238.535(1) and each licensed charitable organization for a
period of three
(3)years. Office staff shall have access to these records at
reasonable times. Licensed charitable organizations and exempt organizations shall
maintain their charitable gaming records at their offices or places of business within
the Commonwealth of Kentucky as identified in their license applications or
applications for exempt status. An exempt organization shall submit a yearly
financial report in accordance with KRS 238.535(2), and failure to file this report
shall constitute grounds for revocation of the organization's exempt status.
(6)All licensed charitable organizations that have annual gross receipts of two hundred
thousand dollars ($200,000) or less and do not have a weekly bingo session shall
report to the office annually at the time and on a form established in administrative
regulations promulgated by the corporation.
(7)All other licensed charitable organizations shall submit reports to the office at least
quarterly at the time and on a form established in administrative regulations
promulgated by the corporation.
(8)Failure by a licensed charitable organization to file reports required under this
chapter shall constitute grounds for revocation of the organization's license or
denial of the organization's application to renew its license in accordance with KRS
238.560(3). Reports filed by a licensed charitable organization shall include but
shall not be limited to the following information:
(a)All gross receipts received from charitable gaming for the reporting period,
classified by type of gaming activity;
(b)The names and addresses of all persons who are winners of prizes having a
fair market value of six hundred dollars ($600) or more;
(c)All expenses paid and the names and addresses of all persons to whom
expenses were paid;
(d)All net receipts retained and the names and addresses of all charitable
endeavors that received money from the net receipts; and
(e)Any other information the office deems appropriate.
(9)No licensed charitable organization shall incur charitable gaming expenses, except
as provided in this chapter. No licensed charitable organization shall be permitted to
expend amounts in excess of prevailing market rates for the following charitable
gaming expenses:
(a)Charitable gaming supplies and equipment;
(b)Rent;
(c)Utilities;
(d)Insurance;
(e)Advertising;
(f)Janitorial services;
(g)Bookkeeping and accounting services;
(h)Security services;
(i)Membership dues for its participation in any charitable gaming trade
organization; and
(j)Any other expenses the corporation may determine by administrative
regulation to be legitimate.
(10)No licensed charitable organization shall expend receipts from charitable gaming
activities nor incur expenses to form, maintain, or operate as a labor organization.
(11)For the purposes of deposits under subsection
(2)of this section, a licensed
charitable organization conducting charitable gaming events or sessions shall only
be required to deposit its gross receipts and adjusted gross receipts one
(1)time per week if the following conditions are met:
(a)The charitable gaming involves only games using charity game tickets;
(b)The charitable gaming is not part of a charity fundraising event; and
(c)The licensed charitable organization's deposits of gross receipts and adjusted
gross receipts from charitable gaming total less than two thousand five
hundred dollars ($2,500) in the week prior to the deposit.