The Georgia Lottery: selected summary financial information from inception (November 2, 1992) through fiscal year ended June 30, 2011

THE GEORGIA LOTTERY
Selected Summary Financial Information from
Inception (November 2, 1992) Through Fiscal Year Ended
June 30, 2011
Russell W. Hinton
State Auditor
Department of Audits and Accounts 270 Washington Street, S.W. - Suite 1-156
Atlanta, Georgia 30334

The Georgia Lottery
Table of Contents

Letter of Transmittal

i

Introduction

1

The Georgia Lottery

3

Utilization of Lottery Income

5

Lottery Reserves

6

Top Ten Lottery Programmatic Areas

7

Appropriations for Education

Compared with Total Appropriations

9

Object Classes to Which Lottery Funds Appropriated

10

Glossary of Terms

13

This report issued by the:
State of Georgia Department of Audits and Accounts
State Government Division 270 Washington Street, S.W. - Suite 1-156
Atlanta, Georgia 30334 (404) 656 - 2180

February 7, 2012
Honorable Nathan Deal, Governor Members of the General Assembly
and Citizens of the State of Georgia
Ladies and Gentlemen:
This special report contains selected pertinent summary financial information about The Georgia Lottery. The report covers that period of time from the approval and activation of the lottery on November 2, 1992 to the end of the fiscal year ended June 30, 2011. The information was obtained primarily from State of Georgia Comprehensive Annual Financial Reports and from other audited financial statements. The information has been presented in a manner which will provide insight relative to operation of the Lottery in Georgia. Summary financial information presented herein reflects lottery revenues, appropriations and other sources/uses of funds in formats similar to financial statements.
We are knowledgeable about matters regarding financial accounting and reporting for governmental units and have taken care in preparing the information for presentation herein. The financial presentations and information presented herein do not represent the financial activity of any single organization of the State of Georgia nor is it intended to be presented in accordance with accounting principles generally accepted in the United States of America. However, we believe the information provided is both useful and relevant to gaining an understanding of the Lottery program as operated in the State of Georgia. This special report is presented for informational purposes only and we do not express an opinion or any other form of assurance on the information presented in this report.
This report is intended for use by the leadership of the State of Georgia. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
Russell W. Hinton, CPA, CGFM State Auditor

(This page intentionally left blank.)

Introduction
Purpose of Report The purpose of this report is to provide a financial overview of The Georgia Lottery from the time of approval by the voters in November 1992 to the end of the most recent fiscal year which occurred on June 30, 2011. This report is not a detailed study of the lottery, nor is it an audit or review of the lottery program. Preparation of Financial Information Financial activities associated with the lottery in Georgia take place in eight organizations of the State. The summary financial information presented in this report was obtained from the State of Georgia Comprehensive Annual Financial Report and reports and other data of the individual State organizations. Lottery financial information was extracted from these reports and is summarized and accumulated in this report. Proper Use of Lottery Funds Defined "Georgia Lottery for Education Act" states that: "net proceeds of lottery games...shall be used to support improvements and enhancements for educational purposes and that such net proceeds shall be used to supplement, not supplant, existing resources for educational purposes and programs." Lottery Ticket Sales The first lottery tickets were offered for sale on June 29, 1993 and in the final two days of the 1993 state fiscal year, net ticket sales were $18.6 million. With the exceptions of fiscal year 2001, fiscal year 2010 and fiscal year 2011, net ticket sales have increased steadily and reached $3.3 billion for fiscal year 2011. The Georgia Lottery Corporation offers a variety of lottery tickets for sale which include instant (scratch-off) ticket sales (i.e., Instant Games) and on-line ticket sales for Cash 3, Cash 4, Decades of Dollars, Fantasy 5, Keno!, Georgia FIVE, Powerball, Mega Millions, and Win for Life.
1

The Georgia Lottery Defined The term "The Georgia Lottery," as used in this report, includes all financial activity of the Georgia Lottery Corporation and financial activity of the Office of the State Treasurer related to Lottery funds. Information on the financial activities of agencies receiving appropriations is not included in this review.
The Georgia Lottery Corporation was created specifically to perform the various aspects of operating and managing a state lottery. The Corporation was created by an act of the General Assembly of Georgia (Georgia Lottery for Education Act, 1992) and was given operating authority by the citizens of Georgia. Activities of the Corporation are directed by a seven member board of directors appointed by the Governor and confirmed by the Senate.
The State of Georgia Office of the State Treasurer receives the net proceeds from The Georgia Lottery Corporation. As required by law, the Office of the State Treasurer maintains the "Lottery for Education" account, as a separate account, into which net lottery proceeds are deposited and maintained. These net proceeds along with their earnings are transferred to the respective State agencies based on appropriations made by the Georgia General Assembly.
Agencies of the State of Georgia Receiving Lottery Appropriations The General Assembly may make appropriations from the Lottery for Education account to those State agencies having education responsibilities. The purposes for and amount of funding provided to these agencies is determined by the Governor and the General Assembly. The agencies are responsible for expending lottery funds in accordance with applicable provisions of the Georgia Lottery for Education Act. Agencies of the State which have received Lottery for Education appropriations are as follows:
Department of Education (includes Office of School Readiness prior to 2005) Department of Early Care and Learning (successor to the Office of School Readiness) Regents, University System of Georgia Georgia Student Finance Commission Technical College System of Georgia (formerly the Department of Technical and Adult
Education) Office of the Governor
2

The Georgia Lottery
The Georgia Lottery for Education Act provides that as nearly as practical, at least 45% of the amount of money from the actual sale of lottery tickets shall be made available as prize money. Through June 30, 2011, prizes amounted to 58.67% of lottery ticket sales net of tickets provided as prizes. The Georgia Lottery for Education Act also provides that, as nearly as practical, net proceeds shall equal at least 35% of the Georgia Lottery Corporation's lottery proceeds. Net proceeds are required to be transferred to the Office of the State Treasurer quarterly. From inception to June 30, 2011, the Lottery Corporation has transferred 29.48%, over $12.7 billion, of lottery proceeds to the Office of the State Treasurer. The following three charts depict the prizes (percentage), net proceeds (percentage) and net proceeds (dollars transferred) from inception through June 30, 2011.
Lottery tickets sales, together with interest income and fees, have reached almost $43.6 billion in just over eighteen years of lottery operations. The interest earned as reported on page 4 includes Georgia Lottery Corporation interest ($72.8 million to date), as well as, amounts earned by the Office of the State Treasurer ($269.3 million to date) on Lottery Funds awaiting appropriation.
3

The Georgia Lottery
From November 2, 1992 to June 30, 2011
4

Utilization of Lottery Income

Of each dollar of total income on page 4, 12.0 cents was used to pay operating expenses and 58.1 cents was paid out in prizes.

For every DOLLAR generated from all sources by The Georgia Lottery

PRIZES

STATE TREASURY

OPERATING EXPENSES

58.1 cents

29.9 cents

12.0 cents

The remaining 29.9 cents was appropriated as follows:
14.7 cents for HOPE Financial Aid: 9.2 cents for HOPE Scholarships-Public 1.7 cents for HOPE Scholarships-Private 1.8 cents for HOPE Scholarships-Books 2.0 cents for HOPE Scholarships-Fees
10.0 cents for Pre-Kindergarten,
1.6 cents for Capital Outlay and
2.3 cents for all other Lottery funded programs.

HOPE Financial Aid 14.7 cents
Pre-Kindergarten 10.0 cents
Capital Outlay 1.6 cents
Other Lottery Funded Programs 2.3 cents

After providing for these appropriations, 1.3 cents remained in the Office of the State Treasurer at June 30, 2011 which was reserved for use at a later date.

Reserved in State Treasury and Lottery Retained Earnings ($580,679,003 as of June 30, 2011) 1.3 cents

In addition, a total of $303,653,119 of Lottery Appropriations was remitted to the Office of the State Treasurer as surplus through June 30, 2011; of which $39,979,072 was remitted during the fiscal year ended June 30, 2011.

5

Lottery Reserves
The Georgia Lottery for Education Act requires the Office of the State Treasurer to maintain two restricted reserve funds to provide contingency funding for the various lottery programs. These reserves can be drawn upon to meet any deficiencies should lottery revenues decrease to the extent that net proceeds are insufficient to meet amounts appropriated for the various lottery programs. These reserves are:
Scholarship Shortfall Reserve - An amount equal to 10% of the prior fiscal year's proceeds disbursed in the form of scholarships and grants is deposited into the Scholarship Shortfall Reserve. Contributions to the Reserve continue until the Reserve equals 50% of the prior year's disbursements for scholarships and grants.
Shortfall Reserve - Of the prior year's net lottery proceeds deposited into the Lottery for Education account, an amount equal to 10% is maintained as a Shortfall Reserve.
In addition, after providing for the restricted reserves shown above, any Unrestricted Reserve which remains in the Lottery for Education account at the Office of the State Treasurer is available for appropriation by the General Assembly. The exhibits below depict the amounts in each type of reserve fund.

Lottery Reserves in State Treasury at Fiscal Year End

Scholarship Shortfall Reserve Statutorily Required Governor's Request Scholarship Total
Shortfall Reserve Unrestricted Reserve
Total Reserves

1994

1995

1996

1997

1998

1999

2000

2001

2002

$

0 $ 2,307,934 $ 9,972,203 $

0

0

67,746,383

$

0 $ 2,307,934 $ 77,718,586 $

0

36,000,000

50,306,302

139,641,001

149,427,181

150,341,127

25,224,063 $ 52,494,523 77,718,586 $ 54,323,390 68,869,338

43,682,957 34,035,629 77,718,586 58,143,872 47,474,400

$ 65,706,349 12,012,237
$ 77,718,586 55,507,200
136,672,034

$ 88,766,861 0
$ 88,766,861 64,670,500
167,304,968

$ 110,084,878 $ 0
$ 110,084,878 $ 68,382,700
144,507,357

134,004,202 0
134,004,202 69,167,200
162,319,870

$ 139,641,001 $ 187,735,115 $ 278,366,015 $ 200,911,314 $ 183,336,858 $ 269,897,820 $ 320,742,329 $ 322,974,935 $ 365,491,272

Scholarship Shortfall Reserve Statutorily Required Governor's Request Scholarship Total
Shortfall Reserve
Unrestricted Reserve
Total Reserves

2003

2004

2005

2006

2007

2008

2009

2010

$ 178,809,360 $ 188,758,757 $ 216,086,253 $ 223,220,798 $ 227,245,246 $ 235,444,428 $ 239,770,942 $ 272,993,887 $

0

0

0

0

0

0

0

0

$ 178,809,360 $ 188,758,757 $ 216,086,253 $ 223,220,798 $ 227,245,246 $ 235,444,428 $ 239,770,942 $ 272,993,887 $

72,620,200

75,155,700

78,269,200

80,208,300

82,279,661

85,364,087

85,835,500

88,146,705

211,005,757

295,481,567

318,680,765

440,784,391

569,613,783

652,429,771

672,950,635

482,213,422

$ 462,435,317 $ 559,364,024 $ 613,036,218 $ 744,213,489 $ 879,138,690 $ 973,238,286 $ 998,557,077 $ 843,354,014 $

2011
332,256,982 0
332,256,982 88,388,235
160,033,786 580,679,003

6

Top Ten Lottery Programmatic Areas
The following list describes the top 10 programmatic areas that have received appropriations from the Lottery for Education account. The totals represent appropriations from inception through fiscal year 2011. The charts on page 10, 11 and 12 provide information on the appropriations by fiscal year.
The top ten programmatic areas account for 95.3% of Lottery for Education appropriations.
1. Pre-Kindergarten - $4,357,776,525 - A voluntary program offered by school systems and private providers designed to give 4-year-olds developmentally appropriate programs to enable them to begin kindergarten ready to learn.
2. HOPE Financial Aid Tuition (Public Institutions) - $4,026,387,639 Helping Outstanding Pupils Educationally (HOPE) is a unique scholarship program that rewards students' efforts with financial assistance in degree, diploma, or certificate programs at any eligible Georgia public college, university or technical college.
3. HOPE Financial Aid Fees - $868,949,791 - Helping Outstanding Pupils Educationally (HOPE) covers HOPE-approved mandatory fees which vary at each college.
4. HOPE Financial Aid Books - $774,628,598 - Helping Outstanding Pupils Educationally (HOPE) grants provide a $100 per quarter/$150 per semester book allowance.
5. HOPE Scholarships - Private Colleges/Tuition Equalization Grants $716,286,551- Students at Private Colleges can qualify for a total award of $2,375 per semester which consists of HOPE Scholarship of $2,000 and a Georgia Tuition Equalization Grant, currently paid from General Appropriations in the amount of $375.
6. Capital Outlay - $715,882,891 - Appropriations made to the Department of Education, the University System of Georgia and the Technical College System of Georgia for capital outlay projects.
7. Computers in the Classroom - $264,340,525 - Grants to local school districts to be used to purchase computers for use by students in the classroom.
8. Equipment - $207,842,958 - Various object classes specifically designating equipment in the object class. The largest appropriations and their respective object classes are $123,840,056 for "Equipment - Technical Institutes" and $40,187,500 for "Media Center and Library Equipment."
7

9. Equipment, Technology & Construction Trust Fund - $186,226,311 - This fund, created by the General Assembly for the purpose of purchasing needed equipment at state supported colleges and universities under the Board of Regents, is funded by lottery appropriations.
10. Other Scholarship Programs - $175,960,611 Scholarships provided for other scholarship programs. The largest appropriations are $85,926,285 for Teacher Scholarships and $60,703,670 for Promise Scholarships.
Lottery Appropriations by Broad Categories Although the preceding list includes a number of different object classes, Lottery for Education appropriations are generally made in three broad categories; Pre-Kindergarten, Scholarships and Technology. The chart below reflects these three broad categories of appropriations for fiscal years 1994 through 2011.
8

Appropriations for Education Compared with Total Appropriations
The Georgia Lottery for Education Act mandates that net proceeds (profits) from Georgia's lottery cannot be used to supplant funding for educational programs. This requirement ensures that lottery funds are not used to fund base level education programs previously funded with non-lottery funds.
For purposes of this report, appropriations for education purposes are defined as those nonlottery appropriations made to the following agencies of the State:
Department of Education (includes Office of School Readiness prior to 2005) Department of Early Care and Learning (successor to the Office of School Readiness) Regents, University System of Georgia Georgia Student Finance Commission Technical College System of Georgia (formerly the Department of Technical and
Adult Education) Office of the Governor Teachers' Retirement System of Georgia Public School Employees Retirement System of Georgia
Total State appropriations have increased from over $8.2 billion in fiscal year 1993 to almost $18.3 billion in fiscal year 2012. Education appropriations of non-lottery funds steadily increased in fiscal years 1994-2002, were fairly constant fiscal years 2003-2005, steadily increased again in fiscal years 2006-2008, declined in fiscal years 2009 and 2010, increased again in fiscal year 2011 and looks to remain fairly constant for fiscal year 2012. Education appropriations of lottery funds increased in fiscal year's 1994-1997 and has experienced both increases and decreases since fiscal year 1998; with an overall increase during that time span. During the four fiscal periods from 1993 to 1996, education and noneducation appropriations moved in a somewhat similar pattern. In fiscal years 1997-2008, education appropriations grew at higher percentage rates than those for non-educational purposes. Both education and non-education appropriations decreased in fiscal years 2009 and 2010. Education appropriations increased in fiscal year 2011 but look to slightly decrease in fiscal year 2012; while non-education appropriations decreased in fiscal year 2011 but look to increase in fiscal year 2012.
Annual appropriations for fiscal years 1993-2011 are based upon the Amended Appropriations Act. Annual appropriations for fiscal year 2012 are based upon the fiscal year 2012 Original Appropriations Act.
9

Object Classes to Which Lottery Funds Appropriated

DEPARTMENT OF EDUCATION LOTTERY FOR EDUCATION APPROPRIATIONS

OBJECT CLASS TO WHICH APPROPRIATED
Algebra Classrooms Alternative Programs Applied Technology Labs
Assistive Technology Capital Outlay Computer Hardware/Software in Classrooms
Computers in the Classroom Distant Learning - Hardware and Cabling Distant Learning - Satellite Dishes
Drug and Anti-Violence Education Educational Technology Centers Financial and Management Equipment
Fort Discovery National Science Center Instructional Technology Learning Logic Sites
Media Center and Library Equipment Model Technology Schools Next Generation Schools
Post Secondary Options Pre-Kindergarten for 4-year-olds Pre-Kindergarten - Grants ** Pre-Kindergarten - Operations ** Pre-Kindergarten - Personal Services ** Safe Schools Grant
Technology Installation
Sub-Total Less: Lapsed Funds
Total - Department of Education

Eighteen Year TOTALS*

Fiscal Years 1994 through 2009

$

753,000 $

15,175,400

22,260,000

753,000 $ 15,175,400 22,260,000

14,000,000 536,807,306
33,087,500

14,000,000 536,807,306
33,087,500

231,253,025 14,138,078 5,407,839

231,253,025 14,138,078 5,407,839

2,025,000 5,244,236 15,548,180

2,025,000 5,244,236 15,548,180

2,635,000 31,238,000
3,324,000

2,635,000 31,238,000
3,324,000

40,187,500 10,750,000
2,000,000

40,187,500 10,750,000
2,000,000

22,208,555 707,591,090 1,374,678,108

22,208,555 707,591,090 1,374,678,108

32,233,177 12,367,666 24,000,000

32,233,177 12,367,666 24,000,000

18,990,000

18,990,000

$ 3,177,902,660 $ (7,350,368)

3,177,902,660 $ (7,350,368)

$ 3,170,552,292 $ 3,170,552,292 $

Fiscal Year 2010 0$
0$ 0$

Fiscal Year 2011 0
0 0

DEPARTMENT OF EARLY CARE AND LEARNING LOTTERY FOR EDUCATION APPROPRIATIONS

OBJECT CLASS TO WHICH APPROPRIATED
Pre-Kindergarten - Grants Pre-Kindergarten - Operations Pre-Kindergarten - Personal Services

Seven Year TOTALS***

Fiscal Year 2005 through 2009

$ 2,174,841,196 $ 37,780,800 18,284,488

1,494,532,776 $ 27,188,615 12,453,075

Fiscal Year 2010
333,535,858 $ 5,326,313 2,853,788

Fiscal Year 2011
346,772,562 5,265,872 2,977,625

Sub-Total Less: Lapsed Funds
Total - Early Care and Learning

$ 2,230,906,484 $ 0
$ 2,230,906,484 $

1,534,174,466 $ 0
1,534,174,466 $

341,715,959 $ 0
341,715,959 $

355,016,059 0
355,016,059

Beginning with the fiscal year 2006 Appropriation Act, the State changed from results-based budgeting focusing on object classes to a prioritized program-based budget methodology. However, for comparative purposes, the data in these tables is presented at the object class level.
*-In state fiscal years 2004 through 2011, the Department of Education received no appropriation of Lottery for Education Funds. **-Appropriations made to Office of School Readiness, a Budget Unit of the Department of Education, fiscal years 2001-2004. ***-Beginning with fiscal year 2005, Office of School Readiness changed to the Department of Early Care and Learning and became a separate budget unit.
10

REGENTS, UNIVERSITY SYSTEM OF GEORGIA LOTTERY FOR EDUCATION APPROPRIATIONS

OBJECT CLASS TO WHICH APPROPRIATED Capital Outlay Capital Outlay - Agricultural Experiment Stations Capital Outlay - Albany State College
Capital Outlay - GPTC Capital Outlay - Georgia College Capital Outlay - Georgia Military College
Chehaw Education Center Computer Labs - Vocational Instruction Distant Learning - Satellite Dishes
Educational Equipment Educational Technology Center Equipment
Equipment - GMC Equipment - GPTC Equipment - Public Libraries
Equipment - Vocational Instruction Equipment, Technology and Construction Trust Fund Georgia Military College - Computer Charges
Georgia Public Telecommunications Commission Georgia Research Alliance Internet Connection Initiative
Mercer University Grant - Equipment Per Diem, Fees and Contracts Research Consortium - Georgia Research Alliance
Special Funding Initiatives Student Information System Technology Equipment Initiative Zoo Atlanta Resources Center
Sub-Total Less: Lapsed Funds
Total - University System of Georgia

Eighteen Year TOTALS****

Fiscal Years 1994 through 2009

$

20,469,980 $

1,500,000

16,639,611

20,469,980 $ 1,500,000
16,639,611

30,942,512 300,000
3,500,000

30,942,512 300,000
3,500,000

2,000,000 240,000 400,000

2,000,000 240,000 400,000

200,000 1,910,000 1,000,000

200,000 1,910,000 1,000,000

438,000 3,300,000
800,000

438,000 3,300,000
800,000

2,000,000 186,226,311
140,000

2,000,000 186,226,311
140,000

15,186,000 100,996,689
13,173,422

15,186,000 100,996,689
13,173,422

250,000 50,000
24,200,000

250,000 50,000
24,200,000

103,605,500 20,000,000 3,579,222 2,500,000

103,605,500 20,000,000 3,579,222 2,500,000

$

555,547,247 $

0

$

555,547,247 $

555,547,247 $ 0
555,547,247 $

Fiscal Year 2010 0$
0$ 0 0$

Fiscal Year 2011 0
0 0 0

Beginning with the fiscal year 2006 Appropriation Act, the State changed from results-based budgeting focusing on object classes to a prioritized program-based budget methodology. However, for comparative purposes, the data in this table is presented at the object class level.
****-In state fiscal years 2004 through 2011, the University System of Georgia received no appropriation of Lottery for Education Funds.

11

GEORGIA STUDENT FINANCE COMMISSION LOTTERY FOR EDUCATION APPROPRIATIONS

OBJECT CLASS TO WHICH APPROPRIATED
Engineer Scholarships Georgia Military College Scholarships HOPE Financial Aid
HOPE Financial Aid - Books HOPE Financial Aid - Fees HOPE Financial Aid -Tuition
HOPE Joint Enrollment HOPE Scholarships - Private Colleges LEPD Scholarship
Operating Services - HOPE Administration Personal Services - HOPE Administration Promise Scholarships
College Opportunity Grant Promise II Scholarships Public Safety Memorial Grant Teacher Scholarships Tuition Equalization Grants
Sub-Total Less: Lapsed Funds
Total - Georgia Student Finance Commission

Eighteen Year TOTALS

Fiscal Years 1994 through 2009

$

9,545,500 $

13,526,795

39,413,797

8,215,500 $ 11,069,379 39,413,797

774,628,598 868,949,791 3,986,973,842

621,536,982 693,565,168 2,966,848,250

46,399,225 588,430,123
2,202,613

30,000,000 479,583,557
2,202,613

20,261,474 26,711,393 60,703,670

15,955,541 18,764,629 54,848,392

4,944,000 4,055,748 1,897,861 85,926,285 127,856,428
$ 6,662,427,143 $ (127,735,274)

4,055,748 1,279,250 80,593,587 127,856,428
5,155,788,821 $ (118,735,274)

$ 6,534,691,869 $ 5,037,053,547 $

Fiscal Year 2010
710,000 $ 1,228,708

Fiscal Year 2011
620,000 1,228,708

90,838,075 102,782,990 433,212,430
7,264,625 50,182,629

62,253,541 72,601,633 586,913,162
9,134,600 58,663,937

1,990,729 3,296,454 5,855,278
255,850 5,332,698

2,315,204 4,650,310
4,944,000 362,761

702,950,466 $
. 702,950,466 $

803,687,856 (9,000,000)
794,687,856

TECHNICAL COLLEGE SYSTEM OF GEORGIA***** LOTTERY FOR EDUCATION APPROPRIATIONS

OBJECT CLASS TO WHICH APPROPRIATED Assistive Technology Grants Capital Outlay Capital Outlay - Adult Literacy
Capital Outlay - Computer Labs Capital Outlay - Technical Institute Satellite Facilities Computer Hardware and Software
Computer Laboratories & Satellite Dishes - Adult Literacy Distant Learning - Satellite Dishes Equipment - Area Schools
Equipment - State Schools Equipment - Technical Institutes Repairs and Renovations
Special Education Equipment Sub-Total Less: Lapsed Funds
Total - Technical and Adult Education

Eighteen Year TOTALS******

Fiscal Years 1994 through 2009

$

500,000 $

1,000,000

3,480,000

500,000 $ 1,000,000 3,480,000

2,544,000 98,699,482
2,818,000

2,544,000 98,699,482
2,818,000

4,040,000 439,000
2,000,000

4,040,000 439,000
2,000,000

14,500,000 123,840,056
18,295,000

14,500,000 123,840,056
18,295,000

200,000

$

272,355,538 $

0

$

272,355,538 $

200,000 272,355,538 $
0
272,355,538 $

Fiscal Year 2010

0$

0$ 0
0$

Fiscal Year 2011 0
0 0 0

Beginning with the fiscal year 2006 Appropriation Act, the State changed from results-based budgeting focusing on object classes to a prioritized program-based budget methodology. However, for comparative purposes, the data in these tables is presented at the object class level.

*****-Formerly known as the Department of Technical and Adult Education. ******-In state fiscal years 2002 through 2011, the Technical College System of Georgia received no appropriation of Lottery for Education Funds.

In addition to the appropriations to the agencies shown on this and the previous pages, an appropriation of $2,000,000 was made for Technology Grants in the 1995 State fiscal year to the Office of the Governor.
12

Glossary of Terms
Administrative Expenses - Operating expenses such as salaries and benefits of employees, rents and utilities, professional fees, depreciation, and similar expenses.
Amended Appropriations Act - Legislation enacted by the General Assembly approximately midway through the fiscal year to increase/decrease funds which may be expended by State budget units. (See also Appropriations Act and Original Appropriations Act).
Appropriation - Approval by the General Assembly for a State organization to receive and expend State funds for specific purposes.
Appropriations Act - Legislation enacted by the General Assembly that lists amounts and purposes for which State funds (as well as other funds) may be expended by the various budget units (departments and agencies of the State). (See also Amended Appropriations Act and Original Appropriations Act).
Budget Unit - A term used in appropriation acts of the General Assembly to denote the separate departments and agencies of State government to which appropriations are made.
Lottery for Education - The official name of the account maintained at the Office of the State Treasurer to distinguish lottery funds from other State funds.
Lottery Proceeds - All revenue derived from the sale of lottery tickets plus all other money derived from lottery operations at the Georgia Lottery Corporation.
Lottery Ticket Sales - Gross lottery tickets sales less the value of any tickets provided as prizes.
Net Proceeds - Lottery proceeds less operating expenses of the Georgia Lottery Corporation. Net proceeds are required by law to be transferred from the Georgia Lottery Corporation to the Office of the State Treasurer.
Object Class - A term used in appropriation acts of the General Assembly prior to program budgeting to denote categories or classifications of expenditures for which funds are appropriated to be expended. (See also Program-Based Budgeting).
Operating Expenses - All costs of doing business, including, but not limited to, prizes, commissions, and other compensation paid to retailers, advertising and marketing costs, personnel costs, capital costs, and depreciation of property and equipment. For purposes of this report, operating expenses are presented sub-categorized as administrative expenses and retailing expenses.
Original Appropriations Act - Legislation enacted by the General Assembly approximately three or four months prior to the beginning of the fiscal year. (See also Appropriations Act and Amended Appropriations Act).
Program-Based Budgeting - A budgetary control prescribed by the Appropriations Act of the General Assembly which appropriates expenditures related to specific funding sources within programs. This budgetary control was first implemented in fiscal year 2006. (See also Object Class).
Retailing Expenses - Those operating expenses associated with selling and marketing, such as retailer commissions and bonuses, contractor fees, advertising, marketing and other similar expenses.
State Treasury - A term used to refer to the Office of the State Treasurer.
The Georgia Lottery - For purposes of this report, includes total financial activity of the Georgia Lottery Corporation, financial activity of the Office of the State Treasurer related to Lottery funds, and financial activity of State agencies appropriated Lottery for Education funds for specific purposes.
Total Income - All income generated by the Georgia Lottery Corporation plus interest earned on the Lottery for Education account at the Office of the State Treasurer.
13