South Carolina's Use of Education Lottery Account Funds
June 2018
During a 2018 management performance review of the South Carolina Education Lottery (SCEL), members of the General Assembly requested that we review the appropriation and use of lottery revenues.
As a result, we conducted our review in two parts: (1) the appropriation and use of lottery funds, over which SCEL has no authority; and (2) the performance and management of SCEL.
In this report, we summarize the findings which had the following objectives:
- Determine whether the funds from the Education Lottery Account (ELA) have been spent in compliance with state law.
- Determine the state’s compliance with the education funding requirement in S.C. Code §59-150-350(D).
- Determine the status of recommendations made in previous LAC lottery audits.
We will publish a report on the findings from the second part of our review later in 2018.
S.C. Code §2-15-60(c) authorizes the Legislative Audit Council “[t]o assist the General Assembly in the performance of its official functions by providing its members and committees with impartial and accurate information and reports concerning the fiscal problems presented to them as members of the General Assembly.”
From the inception of the lottery in FY 01-02 through FY 17-18, $5 billion in net lottery proceeds have been appropriated by the General Assembly, primarily to higher education and K-12 programs.
In FY 16-17, total lottery revenues were more than $1.6 billion, yielding $400 million in net proceeds.
SCEL, which operates the lottery, has no authority regarding the appropriation of lottery proceeds or the programs funded.