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Audit sought for Colorado lottery-fund use

Oct 10, 2003, 9:50 am

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Colorado Lottery

The director of a state agency that doles out $40 million a year in Colorado Lottery funds has asked for an audit on how the money has been spent.

In addition, Mike Beasely, the director of the Department of Local Affairs, has asked a legislative committee to look again at the issue of whether the state should have more oversight over the Conservation Trust Fund.

The department distributes lottery proceeds from the fund to local governments and recreation districts, which then determine who gets the money.

Some critics have questioned how the money has been spent, from operating expenses for a local theater group to an "adventure program" for a day-care center.

"While opinions may vary regarding the appropriateness of some of the uses of these funds by local governments, I am aware of no uses of funds contrary to those permitted by statute," Beasley said.

Beasley, who recently took over the department, said he discovered that, in 1995, the state auditor recommended greater oversight by the Department of Local Affairs and better reporting to lawmakers on how the money is spent.

However, the legislature did not act on the recommendation, so the state had no authority for more control, Beasley said in a recent letter to the legislative Audit Committee.

"If the legislature wants to go back and revisit this, we would be willing to discuss it with them," he said.

Voters created the Conservation Trust Fund more than 20 years ago, when they first approved scratch games..

According to the Conservation Trust Fund's Web site, the money can be used for "interests in land and water, park or recreation purposes, for all types of open space, including but not limited to flood plains, greenbelts, agricultural lands or scenic areas, for any scientific, historic, scenic, recreation, aesthetic or similar purpose."

"It's a pretty broad statute," Beasley said. "A community gets to decide what its recreational needs are."

There are 445 Conservation Trust Fund recipients in the state. The amount they receive to hand out is based on the population they serve.

Among the critics is Ricky Santarelli, a former Gunnison County commissioner who began questioning how lottery funds were distributed because of decisions made by the Gunnison County Metropolitan District.

The district awarded $96,718 to 14 groups, including $15,000 to the Center for the Arts for a band shell and $9,250 to the Crested Butte Nordic Council for a snowmobile and grooming equipment.

Santarelli questions whether operating expenses for a private theater company fall under the restrictions in the state law governing conservation trust funds.

According to Colorado statute, the money "shall be expended only for the acquisition, development, and maintenance of new conservation sites or for capital improvements or maintenance for recreational purposes on any public site."

"That language doesn't, in my mind, lend itself to such wide interpretation that it allows funding for movie programs and other things of that nature," Santarelli said.

"I'm not trying to impute a bad intent to (local officials)," he added. "I just think that they got a little carried away with giving away money and weren't as careful as they should be."

Beasley said the local officials who determine how the money is spent are "civic-minded people."

"I am, by no means, questioning the behavior or decisions of local government officials in calling for this audit," he said in his letter to legislators.

"I hope to confirm that what I and (department) employees believe to be true about the use of these funds is correct."

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