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There are no minutes from the group's meetings. However, a lack of guidance on how to change overall risk profiles, lack of controls over those with the ability to make changes, and the significant gaps in information about operators as described later in this Part present a risk to the Department's reliance on risk profiling to determine its work programme. For example, at the national moderation meeting we attended, only two out of about 94 clubs in one region had the risk-profile fields populated. However, there were also significant improvements that could be made to a number of these elements, particularly on consistency of practice and compliance with the Act. Clubs score out of a maximum of 75, while societies score out of a maximum of This is because the Department has decided that the generally smaller number of gaming machines in clubs, and their generally less complex organisational and operating arrangements, make them lower risk. We recognise that the time to complete an audit will depend in part on the conduct of the operator. The Department's audit manual also states that the reason for a targeted audit will be documented and an audit plan prepared. This is because a policy and procedure manual for investigations was being prepared by the Department at the time of our audit. This is known as an operator's risk profile. These included a relatively high turnover of staff, and reliance on volunteers who may have limited knowledge of their non-casino gaming machine obligations. This is because the Department has identified three different ways in which societies calculate returns to authorised purposes.

In particular we:. This is shown in Figure 5. Risk profiling involves assessing the casino procedure manual of risk of each operator against nine different risk factors and rating this on a categorical scale for each factor. Some staff told us it casino procedure manual very difficult to locate even the previous year's audit report for an entity, and that they had to retrieve the physical casino procedure manual for the operator or venue to get this information.

The Department is budgeting less time for auditing and more time for education and investigation activities. The Department acknowledges that this measure is not directly related to compliance but rather gives an indirect indication of compliance.

These included annual reports, responses to Parliamentary Questions, and information provided directly to us by the Department. The Department provided us with documentation that showed it tracked the number of different compliance interventions undertaken in each month by each regional office.

The purposes of the Act that we looked at include maximising returns to the community, and limiting opportunities for crime and dishonesty. In our view, the Department should accelerate this work, given its importance in demonstrating to stakeholders the results being achieved by the Department and for casino procedure manual the Department's understanding of the effect of its work.

If the casino procedure manual are unhappy with the way the Department has handled a complaint they are entitled to complain about the Department to the Commission.

The findings against each of our specific expectations are outlined below. Information provided by the Department indicates that it undertook more investigations, presentations, and visits during the period this web page reduced the number of audits it carried out.

Without including these, the reported time measure is inaccurate and can be misleading. The Department told us that it investigates all complaints, as the Act requires.

The National Manager, Gambling Compliance decides what sanctions to apply. The Department states this was to improve the effectiveness of audits, increase public confidence in the regime, queen vegas reduce public criticism over non-compliance.

The outcomes of the review were:. At the time of our audit, the Department told us that it was undertaking further work to validate historical activity information and that it would correct any information found to be incorrect. We expected the Department to take a risk-based approach that covers the specific elements outlined in paragraph 4.

The points from each risk factor are added up to determine the total risk. This is casino procedure manual of the Department's approach since the introduction of the Act. The level of returns to authorised purposes can potentially be manipulated by changing depreciation assumptions, as well as changing over time due to legitimate variations in expenses.

However, in our view, these timeframes are largely within the Department's control and should be included in its reporting. The Gambling Infringement Notices Regulations were introduced to prescribe the form of any infringement notice casino procedure manual will be issued.

This is reflected in the Department's acknowledgement that its risk assessment may not match its intelligence information for selected organisations. Trends in the number of audits are not necessary indicative of the Department's total audit activity. Over time, it is therefore possible for the Department to vary the level of risk that determines whether an operator is included in the national audit work programme. The intended purpose of the group is to assist consistency of decision-making across the Department's regional offices. This may include some societies as well as clubs. The Department then undertook an internal review of its activity reporting information. It also stated in October that it intended to "develop a strong organisational output and outcome measurement system". This means that fewer meet the threshold of "high risk" to warrant an audit, which leads to a further reduction in its audit activities. Some staff suggested the risk factor should be rated high, while others said a medium or low rating should be given. This was not of major concern to us, given the requirements of the Act, the state of development of the industry, and the Department's emerging voluntary compliance approach. The Department has a long-term objective of developing an interface between its licensing and intelligence databases. Some audits of national societies involve multiple venues across New Zealand, while others may involve a society operating from a single venue. Appeals are managed on behalf of the Department by its Operational Policy and Legal Services sections. The Department has reflected the main compliance activity measures from its statement of service performance in its internal business plan. The Department also noted that a lot of change occurred within non-casino gambling during the period covered by the historical information in question. The Commission is independent of the Department. At the time of our audit, there had been no complaints specifically about the Department to the Commission. This approach appears at odds with one of the purposes of the Act, which is to limit opportunities for crime and dishonesty, and the Department has made achieving this purpose a priority. Listed from most serious to least serious, these include:. The profiles are ranked and then the greatest compliance resource is allocated to the operators with the highest risks. We will ask the Appointed Auditor of the Department to give extra attention to the Department's activity reporting when next auditing the Department. While the Department's risk-profiling documentation suggests risk profiles will be continually updated based on complaints, licensing, audits, investigations, education visits, and other activity, we observed that the Department had little or no information on many operators available at its moderation meeting. We were told that targeted audits typically take between one week and two months. At the time of our audit, the Department planned to develop a framework describing voluntary compliance in the context of the Department's responsibilities. Therefore, we could not judge the consistency of advice on proposed sanctions it received from gambling inspectors, consistency of the Sanction Group's advice with the Department's policies primarily its Enforcement Policy , or consistency of the sanctions applied on the advice of the group. The time taken to begin an audit after notifying the operator and for completing an audit once a draft report has been finished are not included in the Department's reporting of audit timeframes. The audit starts once all requested documentation has been received, and is completed when the draft audit report is sent to the operator. As staff do not complete time sheets and the Department does not record actual allocation of staff time, we could not confirm if its intentions were reflected in practice. See Part 2 for more information about the Commission. The Department does not have outcome measures for these purposes despite the primary role of gambling inspectors being to ensure compliance with the Act. In our view, good practice is to increase a risk rating over time in the absence of information. In our view, there is a risk that, by doing fewer audits, the Department gathers less information about entities. Some staff complained that this system was inflexible. Therefore, determining compliance rates may involve estimates that use a variety of indicative information sources — for example, information on actual returns to the community obtained from operators' audited accounts. The Department has identified the aim of its regulatory strategy is to increase returns to the community. The risk-profile information determines whether a targeted audit or a full audit is undertaken. There is also a view among some Department staff that clubs will be self-regulating because any diversion of funds affects the clubs directly. We used a variety of sources of information. The Department needs to differentiate between the size of audits in its reporting. Investigations can be conducted during the year if prompted by a complaint or similar trigger, but are not classed as an audit. The Department says that this approach is producing benefits, but it was unable to demonstrate this quantitatively at the time of our audit. However, we suggest caution in using historic information about the Department's non-casino gambling related activities. This includes demonstrating the results of its emerging voluntary compliance approach to stakeholders and staff. Reliable activity reporting information is particularly important if the Department is to understand relative use of resources within its voluntary compliance approach and the outcomes the approach is achieving. In practice this means that operators with a risk profile above a high-risk level are included on a national audit work programme. Both we and the Department believe that, to be effective, voluntary compliance must be complemented by effective enforcement when breaches of the law have occurred. We noted some inconsistencies in these assumptions in practice. In the Department's view, its risk-profiling activities, described later in this Part, are used on an ongoing basis to monitor the level of compliance within the industry. One result of this scoring system is that few clubs get included in the national audit work programme. At least one of the Department's staff members has suggested "time since last audit" be included in the risk assessment criteria for clubs. There are a range of sanctions available to the Department. However, the Department's policies and procedures do not provide guidance on how staff should determine the circumstances in which individual items from the audit checklist should be used in an audit. Unless there is evidence to the contrary then the rating should be at the low end of the scale [low risk of non-compliance]. We observed that the definition of high risk changed from year to year. One of the Department's senior staff expressed the view that fraud or theft meant that clubs were stealing only from themselves, so the matter was for the police to investigate rather than the Department. The Department relies on the judgement of staff using information and knowledge about a given operator, and requires staff to consult with a senior gambling inspector. We did not examine investigations as part of our audit. In our view, the Department is improving its relationship and interactions with the industry such that, over time, they may support a more self-regulatory approach, should a policy decision be made to adopt such an approach. Because there were some considerable differences between the information sources, we asked the Department to provide us with a definitive set of activity information. However, the Department's staff we talked to pointed out that clubs typically had other risks. The information shown is for all of the Department's compliance activities relating to non-casino gaming machines, not just those relating to operator and venue costs. A "compliance education society visit" has been suggested by Department staff as a method of obtaining information to update the risk profile for operators that have not been audited recently.