4. Electronic Funds Transfer (EFT)

4.1    Licensees must decide in accordance with their constitution and subject to agreement with their financial institution whether to implement electronic funds transfer (EFT). EFT may be used:

  1. by an HCA to pay for expenses, to deposit monies into its account or to distribute net proceeds derived from the conduct of charitable gaming events to its member organizations
  2. by a licensee to pay for expenses, to deposit monies into its account, or to distribute net proceeds derived from the conduct of lotteries to eligible recipients.

4.2    The licensee or HCA, in consultation with its financial institution, must determine a maximum amount that may be transferred electronically from each designated lottery trust account or CDTA over a specified period of time.

4.3    In the case of an HCA, it must obtain written authorization from each member organization that is agreeing to the use of EFT. Each participating member organization is responsible for providing to the HCA its banking information, approved by two (2) authorized signing officers for each designated lottery trust account to receive funds electronically.

4.4    If the HCA or licensee wishes to pay expenses or distribute the net proceeds derived from the conduct of charitable gaming events by EFT, the HCA or licensee must obtain the payee’s banking information and retain it on file.

4.5    The licensee or the HCA must ensure that its financial institution’s EFT system has the following capabilities:

  1. cryptographic security provided by the financial institution
  2. audit capability that records all changes made to the designated lottery trust account or CDTA EFT file so that changes made cannot be hidden or accounts deleted without leaving an audit trail
  3. electronic dual authorization
  4. automatic electronic confirmation of funds transferred sent to a bona fide member
  5. backup capabilities and utilities for audit purposes.

4.6   

  1. The HCA must designate four (4) bona fide members to administer EFT funds and be signing officers for the HCA. The four (4) bona fide members must be representatives of four (4) different member organizations of the HCA.
  2. Each licensee must designate at least three (3) bona fide members to administer EFT funds and be signing officers for the licensee.

4.7    Licensees and the HCA must use software applications provided by or software required by their financial institution to create EFT files and transfer funds electronically.

4.8    The licensee or the HCA must ensure that sufficient funds are available in the account prior to executing any transfer.

4.9    The licensee or the HCA must submit EFT files on a regular basis to its financial institution.

4.10  The transfer of funds must be authorized electronically by two (2) of the bona fide members designated to administer EFT.

4.11  The EFT file must be submitted to the financial institution within two (2) business days of creating the file to execute EFTs. The licensee or the HCA must retain a record confirming the transfer of funds.

4.12  The licensee or the HCA must obtain reports from the financial institution summarizing the file information. At a minimum the reports must provide:

  1. the number of accepted and rejected payments and the dollar value of each
  2. a returned items report that lists any payments that were returned and why the transactions were returned, including the dollar value of each
  3. a redirected transaction report that identifies payments intended for closed branches or other financial institutions.

4.13  The licensee or the HCA must ensure that within three (3) business days of receipt, the reports received from the financial institution are reviewed and signed by one (1) of the bona fide members designated to administer EFT who did not sign the original authorization for the transfer of funds. The signing officer must prepare a summary setting out any discrepancies in the report received from the financial institution and present it to the licensee’s or HCA’s Board of Directors at a meeting to be held within 90 days.