Chapter 16.08

ACCOUNTING, AUDITING AND INTERNAL CONTROLS

Sections:

16.08.010 Content of internal controls.

16.08.020 Approval by the administrator. 16.08.030 Financial statement audits and internal control reports.

T16:15

SAN JOSÉ CODE

§ 16.08.010

• A. The administrator shall develop and promulgate regulations establishing minimum internal controls over all areas of cardroom operations, including, but not limited to, all of the following areas:

  1. Card table funds;

  2. Collection of fees;

  3. Drop box transportation and storage;

  4. Counting of fees;

  5. Cashiers cage operations;

  6. Table of organization and jobs compendium;

  7. Internal audit function;

  8. Security and surveillance monitoring systems, including closed circuit television systems;

  9. Records retention;

  10. Financial reports;

  11. Tips;

  12. Signatures;

  13. Documentation of amounts written off;

  14. Patron deposit accounts and patron check cashing procedures; and

• A. As a condition for operation, each Cardroom Permittee shall submit a written system of internal controls document to the Administrator for review and approval within ninety (90) Business Days after the Administrator issues his or her minimum internal control Regulations.

  - B. The Administrator shall review the Document submitted by the Permittee and shall serve upon the Permittee either a statement of acceptance approving the document or a statement of deficiency outlining the areas in which the document fails to meet the Administrator's minimum internal control Regulations, within ninety (90) Business Days after receipt of the document. 
  
  - C. The Cardroom Permittee shall, within thirty (30) Business Days from the service of the statement of deficiency, submit to the Administrator a corrected system of internal controls document that shall correct all areas of deficiency found in the statement of deficiency to the satisfaction of the Administrator. 
  
  - D. A Cardroom Permittee shall comply with all provisions contained in the written system of internal controls document approved by the Administrator for that Cardroom. 
  
  - (Ords. 28517, 30616.) 
  

  15. Goods and services contractors.

• B. Cardroom permittees shall apply, at a minimum, internal controls, accounting and auditing procedures and standards that the administrator adopts by regulation.

• C. Each cardroom permittee shall, at its own expense, provide the administrator with the use of a dual closed circuit television monitoring station in the surveillance room of the cardroom. In addition, each cardroom permittee shall, at its own expense, provide the administrator with such other off-site or remote closed circuit television monitoring station or system for surveillance purposes as the administrator may require by regulation.

(Ord. 28517.)

• A. Each cardroom permittee shall submit to the administrator an annual financial statement audit.

• B. The financial statement audit shall be conducted by an independent certified public accountant licensed to practice in the State of California and acceptable to the administrator.

• C. In addition to the financial statement audit required under Subsection A, above, each cardroom permittee shall, at its own expense, have its independent certified public accountant render and submit to the administrator

T16:16

GAMING CONTROL

§ 16.10.010

on an annual basis a report, prepared in conformity with generally accepted accounting principles, on the cardroom's internal control structure, which shall include a report of all exceptions noted, regardless of materiality. In addition, the report shall include a disclosure of any reportable condition discovered in the course of preparing the internal control report.

• D. If the internal control report discloses a reportable condition, the cardroom permittee shall prepare a written response to the independent certified public accountant and submit a copy of the written response to the administrator within ninety calendar days from the receipt of the independent certified public accountant's report.

• E. The cardroom permittee's written response shall indicate the corrective action undertaken by the permittee.

• F. The corrective action undertaken by the permittee shall be to the satisfaction of the administrator.

• (Ord. 28517.)

• A. The administrator may perform such financial and compliance reviews and oversight of each cardroom permittee as the administrator considers necessary in order to assure that each permittee is in full compliance with the requirements of this title.

• B. The administrator is authorized to contract for certified public accountants and other professional services that the administrator considers necessary in order to conduct any independent financial audit or review or any compliance audit or review of a permitted cardroom.

• C. The cardroom permittee that is the subject of the audit or review shall reimburse the city for the full costs of any certified public accountant and other professional services that the

administrator considers necessary in order to conduct an independent financial audit or review or compliance audit or review.

• D. The costs and charges of the certified public accountant and other professional services shall be set forth in the schedule of fees established by resolution of the city council. The cardroom permittee that is the subject of the audit or review shall be liable for payment of all costs and charges as they come due to the city. The administrator shall provide written notice of each invoice to the cardroom permittee as the invoices come due to the city.

• (Ord. 28517.)