A N N U A L R E P O R T O F

N O N - F I N A N C I A L D A T A

________________________________________________________ ________________________________________________________

FISCAL YEAR 2007

Jamcs A. Cox, Jr.C/wirmun

C. Tom Clowc, Jr.Commissioner

TEXAS LOTTERY COMMISSION

Anthony J. Sa.JhcITY, Executire Direc/or

December 31, 2007

The Honorable Rick Perry, GovernorJohn O'Brien, Director, Legislative Budget BoardJohn Keel, CPA, State Auditor

Gentlemen:

We are pleased to submit the Texas Lottery Commission's Annual Report ofNonfinancial Data for the year ended August 31, 2007, in compliance with the TEX.GOV'T CODE ANN. § 2101.0115 and in accordance with the instructions forcompleting the Annual Report of Nonfinancial Data.

The accompanying report has not been audited and is considered to be independent of theagency's Annual Financial Report.

If you have any questions, please contact Kathy Pyka, Controller, at 344-5410.

(Anthony SadberryExecutive Director

1'.0. Box 166:~O• Austin, Texas 78761-6630

, Phone (512) 344-5000 • FAX (512) 478-3682 • Bingo FAX (512) 344-5142

TABLE OF CONTENTS Appropriation Item Transfer Schedule 1HUB Strategic Plan Progress Report 2Indirect Cost Schedule 3Schedule of Professional/Consulting Fees and Legal Service Fees 4Schedule of Space Occupied 5Report of Recycled, Remanufactured and Environmentally Sensitive Purchases

6

Schedule of Aircraft Operation 7Schedule of Itemized Purchases 8Schedule of Vehicles Purchased 9Schedule of State-Owned or Leased Vehicles Used by State Employees 10Schedule of Bonded Employees 11

Unaudited

Texas Lottery Commission (362)

APPROPRIATION ITEM TRANSFER SCHEDULE*For Fiscal Year Ended August 31, 2007

ITEM OF APPROPRIATIONTransfers - In Transfers - Out Net Transfers

A. Goal: (Operate Lottery) Strategies: A.1.1. 13005 Lottery Operations -$ -$ -$

A.1.2. 13012 Lottery Field Operations 22,345.00$ -$ 22,345.00$ A.1.3. 13006 Marketing and Promotion -$ (187,500.00)$ (187,500.00)$ A.1.4. 13008 Security 234,380.84$ -$ 234,380.84$ A.1.5. 13013 Security Field Operations -$ (90,890.84)$ (90,890.84)$ A.1.6. 13009 Central Administration 847,665.87$ -$ 847,665.87$ A.1.7. 13014 Lottery Operator Contract -$ -$ -$ A.1.8. 13015 Instant Ticket Production Contract -$ -$ -$ A.1.9. 13007 Mass Media Advertising Contracts 1,000,000.00$ -$ 1,000,000.00$

A.1.10. 13016 Inst Tkt Vending Machine Contract -$ (1,125,000.00)$ (1,125,000.00)$ A.1.11. 13017 Drawing & Broadcast Contract -$ (513,500.87)$ (513,500.87)$ A.1.12. 13018 Market Research Contract -$ (187,500.00)$ (187,500.00)$ A.1.13. 13019 Retailer Bonus -$ -$ -$

Total, Goal A: (Operate Lottery) 2,104,391.71$ (2,104,391.71)$ 0.00$

B. Goal: (Enforce Bingo Laws) Strategies: B.1.1. 13004 Bingo Licensing 23,951.00$ -$ 23,951.00$ B.1.2. 13010 Bingo Education and Development 11,685.00$ -$ 11,685.00$ B.1.3. 13003 Bingo Law Compliance Field Oper -$ (35,636.00)$ (35,636.00)$

B.1.4. 13020 Bingo Prize Fee Collection & Acct -$ -$ -$ B.1.5. 13021 Bingo Prize Fee Allocations -$ -$ -$

Total, Goal B: (Enforce Bingo Laws) 35,636.00$ (35,636.00)$ -$

NET APPROPRIATION ITEM TRANSFERS 2,140,027.71$ (2,140,027.71)$ 0.00$

* This schedule does not include Salary Increases, Benefit Replacement Pay Transfers, Reduction to Air Travel or Capital Transfers.

1

2

Unaudited

Texas Lottery Commission (362)

INDIRECT COST SCHEDULEFor the Fiscal Year Ended August 31, 2007

A. Payroll Related Costs FICA Employer Matching Contribution 152,953.28$ Group Health Insurance 230,771.87 Retirement 131,653.44 Unemployment 290.50 FICA Employee Share Paid by State -

Total Payroll Related Costs 515,669.09$

Workers' Compensation - Benefit Replacement Pay (BRP) 25,500.04$

Total Workers' Compensation and BRP 25,500.04$

B. Indirect CostsBond Debt Service Payments

TBPC - TPFA - Other (if applicable) -

Total Indirect Costs -$

C. Indirect Costs - Statewide Full Cost Allocation Plan(based on FY 07 data)

Building Depreciation 10,714.00 USAS Depreciation -

(301) Governor - Budget and Planning 19,598.00 (304) Comptroller - Treasury Operations 48,985.00 (306) Texas State Library and Archives Commission - (306) ADJ Library - (313) Dept. of Information Resources (5,095.00) (303) TBPC - Purchasing(303) TBPC - P Card Rebate 1,295.00 (303) TBPC - Support Services 3,805.00 (303) TBPC - Building & Property Services 12,681.00 (303) TBPC - Facilities and Space Management 4,877.00 (303) TBPC - Asbestos(479) SORM 19.00 (101) State Senate - (102) House of Representatives - (103) Legislative Council - (104) Legislative Budget Board - (105) Ref Library - (116) Sunset Advisory Commission -

Total Indirect Costs -Statewide Full Cost Allocation Plan 96,879.00$

TOTAL INDIRECT COSTS 638,048.13$ 3

Unaudited

Texas Lottery Commission (362)

SCHEDULE OF PROFESSIONAL/CONSULTING FEES AND LEGAL SERVICE FEES For the Fiscal Year Ended August 31, 2007 Name

Type of Service Rendered

Amount

Professional/Consulting Fees Abdeladim & Associates Computer Programming Services $ 46,906.25Affiliated Forensic Laboratory, Inc. Other Professional Services 159,500.00Austin Ribbon Computer Computer Programming Services 49,914.76C & T Consulting Services LLP Computer Programming Services 37,145.00Davila Buschhorn & Associates, PC Financial and Accounting Services 412,139.60EMC Corporation Computer Programming Services 14,099.30IPSOS-Reid Corp. Other Professional Services 217,790.00M & S Works, Inc. Other Professional Services 1,517,102.28Paul Adams Productions Other Professional Services 114,900.00Randall L. Eubank Other Professional Services 30,160.00Texas Department of Public Safety Other Professional Services 48,356.24Texas Dept. of Assistive/Rehabilitative Services Other Professional Services 24,750.00Texas State Auditor’s Office Financial and Accounting Services 36,194.50The University of Texas at Austin Educational/Training 18,400.00The University of Texas at Austin Consultant Services - Other 52,727.38UT – Austin School of Social Work Other Professional Services 25,146.00University of North Texas Other Professional Services 52,416.00Vericenter, Inc. Other Professional Services 314,683.98Vericenter, Inc. Computer Programming Services 235,625.51Payments to Other Vendors - Under $10,000.00 Other Professional Services 8,453.46 Total Professional/Consulting Fees $ 3,416,410.26 Legal Service Fees Graves, Dougherty, Hearon & Moody Legal Services $ (78,586.66)Meyertons Hood Kilvin Kowert & Goetzel, PC Legal Services (63,395.16) Total Professional/Consulting Fees and Legal Service Fees $ 3,274,428.44

4

Una

udite

d

Texa

s Lo

ttery

Com

mis

sion

(362

)

SCH

EDU

LE O

F SP

AC

E O

CC

UPI

EDFo

r the

Fis

cal Y

ear E

nded

Aug

ust 3

1, 2

007

Loca

tion

Add

ress

Less

orLe

ase

N

umbe

rTy

pe

Usa

ble

Squa

re F

eet

/ Uni

tsFT

Es

Cos

t per

Sq

. Ft .

/ U

nits

Cos

t per

M

onth

Act

ual A

nnua

l C

ost

Stat

e-O

wne

d B

uild

ings

:

El P

aso

401

E. F

rank

lin, S

te. 1

50O

ffice

1,73

0S

q. F

t.2

0.00

0.00

Tota

l Sta

te O

wne

d Sp

ace

1,73

02

Free

Spa

ce:

Non

e

Leas

ed S

pace

:

Abi

lene

209

S. D

anvi

lle, S

uite

C-1

03LJ

Pro

perty

304-

8976

Offi

ce50

0S

q. F

t.2

0.63

7831

8.92

$3,8

27.0

4A

mar

illo

7120

IH-4

0 W

est,

Sui

te 1

10A

mar

illo

Inde

pend

ent S

choo

l Dis

trict

304-

0961

2O

ffice

500

Sq.

Ft.

20.

8408

420.

38$5

,044

.56

Aus

tin C

entr

al O

ffice

611

E. 6

th S

t.G

rant

Bui

ldin

g - A

ustin

L.P

.36

2-97

56O

ffice

75,5

78S

q. F

t.24

62.

4329

$183

,871

.96

$2,2

06,4

63.5

2A

ustin

War

ehou

se &

Offi

ce

Spac

e80

06 C

amer

on R

d., S

uite

720

-AS

abre

hal I

nter

natio

nal,

LTD

.36

2-89

05-E

7AW

areh

ouse

12,8

50S

q. F

t.2

1.09

9214

,124

.29

$169

,491

.50

Offi

ce

8,75

0S

q. F

t.0

1.09

929,

617.

71$1

15,4

12.5

0A

ustin

Con

vent

ion

Cen

ter

Park

ing

Gar

age

601

E 5

th S

treet

City

of A

ustin

362-

1121

Par

king

145

Spa

ces

012

0.00

17,4

00.0

0$2

08,8

00.0

0B

eaum

ont

6440

Con

cord

Roa

dM

adel

ine

Linn

Wal

ker

303-

6-10

142

Offi

ce1,

044

Sq.

Ft.

21.

0018

1,04

5.86

$12,

550.

32C

orpu

s C

hris

ti46

39 C

oron

a, S

uite

19

CU

NA

Mut

ual L

ife In

sura

nce

Co.

362-

1612

Offi

ce1,

030

Sq.

Ft.

20.

7893

816.

38$9

,796

.56

Dal

las

1555

W. M

ocki

ngbi

rd L

n., S

te 2

03O

akbr

ook

Pla

za L

td.

362-

0987

3O

ffice

3,74

6S

q. F

t.12

1.18

464,

437.

67$5

3,25

2.04

Fort

Wor

th40

40 F

ossi

l Cre

ek B

lvd,

Ste

102

Per

ry-T

ubb

Hol

ding

s, L

LP30

4-09

996

Offi

ce88

0S

q. F

t.3

1.11

3397

9.73

$11,

756.

76H

oust

on19

19 N

. Loo

p W

., S

uite

100

PN

O, L

TD30

4-10

614

Offi

ce4,

225

Sq.

Ft.

111.

1653

4,92

3.58

$59,

082.

96La

redo

1202

Del

Mar

Blv

d., S

te. 4

AN

B R

esou

rces

-Lar

edo,

lTD

304-

0808

7O

ffice

704

Sq.

Ft.

21.

1021

775.

88$9

,310

.56

Lubb

ock

6202

Iola

Ave

nue,

Ste

900

AA

llian

ce R

ealty

Ser

vice

s30

3-7-

1036

0O

ffice

615

Sq.

Ft.

20.

9458

581.

69$6

,980

.28

McA

llen

4501

Wes

t Bus

ines

s 83

, Sui

te A

2Jo

hn P

Tom

ac a

nd V

azm

a I T

omac

324-

1025

2-E

11D

Offi

ce96

0S

q. F

t.2

1.19

341,

145.

66$1

3,74

7.92

Ode

ssa

4682

E. U

nive

rsity

, Ste

. 100

Her

itage

FLP

Pro

perti

es, L

TD30

3-20

112

Offi

ce1,

064

Sq.

Ft.

40.

6355

676.

15$8

,113

.80

San

Ant

onio

9514

Con

sole

, Ste

. 111

Son

ora

Pro

perti

es, L

td30

3-93

28O

ffice

2,41

8S

q. F

t.8

0.90

122,

179.

15$2

6,14

9.80

Tyle

r38

00 P

alux

y D

r., S

te. 3

30G

enec

ov In

vest

men

t, Lt

d30

4-09

797

Offi

ce50

0S

q. F

t.2

0.98

8049

4.01

$5,9

28.1

2Vi

ctor

ia26

01 A

zale

a, S

te. 1

6W

estla

kes

Mal

l, Lt

d36

2-07

365

Offi

ce58

0S

q. F

t.2

0.83

0048

1.40

$5,7

76.8

0To

tal L

ease

Spa

ce11

6,08

930

4$2

44,2

90.4

2$2

,931

,485

.04

TOTA

L A

LL S

PAC

E11

7,81

930

6$2

44,2

90.4

2$2

,931

,485

.04

Ren

tal p

er M

onth

The

agen

cy's

effo

rts

tow

ards

ach

ievi

ng th

e ob

ject

ive

prov

ided

by

Sect

ion

2165

.104

, Gov

ernm

ent C

ode,

incl

ude

eval

uatin

g al

l le

ases

as

they

com

e up

for r

enew

al to

ens

ure

they

are

bro

ught

into

com

plia

nce.

5

Unaudited

Texas Lottery Commission (362)

FY 2007 Agency Report of Recycled, Remanufactured and Environmentally Sensitive Purchases

Agency No. 362 Agency Name: Texas Lottery Commission

Point of Contact: Debi Barbre

Phone Number: (512) 344-5232

E-Mail Address: debra.barbre@lottery.state.tx.us

Total Expenditures E1, E2, or E3 Description

Non-Delegated

Delegated Total

Total E1 Including 1st Choice

Recycled $24,128.86 $6,705.39 $30,834.25

Total E2 Including 1st Choice

Remanufactured $0.00 $2,014.00 $2,014.00

Total E3 Including 1st Choice

Environmentally Sensitive $0.00 $255,967.13 $255,967.13

Total of E1, E2 and E3 includes Recycled 1st Choice Targeted Totals

$24,128.86 $264,686.52 $288,815.38

Expenditures FY 2007 1st Choice Targeted Commodities

* Non-Delegated 1st Choice Products

(A)

Virgin Counterpart

(B)

Total

(A+B)

% Spent on 1st Choice

Products 100 *

[A/(A+B)]

Motor Oil & Lubricants $0.00 $0.00 $0.00 0%

Toilet Paper, Toilet Seat Covers & Paper Towels $0.00 $0.00 $0.00 0%

Printing Paper, Copier Paper & Computer Paper $20,240.20 $0.00 $20,240.20 100%

Business Envelopes $0.00 $0.00 $0.00 0%

Plastic Trash Bags $0.00 $0.00 $0.00 0%

Plastic Covered Binders $0.00 $0.00 $0.00 0%

Recycling Containers $0.00 $0.00 $0.00 0%

Photocopiers $0.00 $0.00 $0.00 0%

Total 1st Choice Targeted Commodities $20,240.20 $0.00 $20,240.20 100%

Summary of Total Number of FY 2007 Justification Letters

* Delegated

Total Cost

Total Quality

Total Not

Available

Total Other

Motor Oil & Lubricants 0 0 0 0

Toilet Paper, Toilet Seat Covers & Paper Towels 0 0 0 0

Printing Paper, Copier Paper & Computer Paper 0 0 0 0

Business Envelopes 0 0 0 0

Plastic Trash Bags 0 0 0 0

Plastic Covered Binders 0 0 0 0

Recycling Containers 0 0 0 0

Photocopiers 0 0 0 0

Total Number(s) 0 0 0 0

6

Unaudited

Texas Lottery Commission (362)

SCHEDULE OF AIRCRAFT OPERATION For the Fiscal Year Ended August 31, 2007

Flight

Start Date

End Date

Time

Rate/Hr.

Cost

Co-Pilot Fee

Total Flight Cost

Not Applicable

7

Una

udite

dTe

xas

Lotte

ry C

omm

issi

on (3

62)

SCH

EDU

LE O

F IT

EMIZ

ED P

UR

CH

ASE

S Fo

r the

Fis

cal Y

ear E

nded

Aug

ust 3

1, 2

007

Nee

d fo

r spe

cific

atio

nsC

ompe

ting

prod

ucts

not

sat

isfa

ctor

yPr

oduc

ts p

urch

ased

PO a

mou

ntVe

ndor

nam

ePO

num

ber

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$6,5

00.0

0Le

ster

Mei

er R

odeo

362L

0700

025

the

Gam

es o

f Tex

asan

d en

terta

inm

ent f

or lo

cal c

omm

uniti

es.

TLC

atte

ndan

ce is

bas

ed o

n lo

catio

n,pa

rtici

patio

n an

d tim

e of

the

even

t

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$20,

500.

00G

loba

l Ent

erta

inm

ent C

orp

362L

0700

286

the

Gam

es o

f Tex

asan

d en

terta

inm

ent f

or lo

cal c

omm

uniti

es.

dba

Cen

tral H

ocke

y Le

ague

TLC

atte

ndan

ce is

bas

ed o

n lo

catio

n,pa

rtici

patio

n an

d tim

e of

the

even

t

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$12,

315.

76Le

ster

Mei

er R

odeo

362L

0700

573

the

Gam

es o

f Tex

asan

d en

terta

inm

ent f

or lo

cal c

omm

uniti

es.

TLC

atte

ndan

ce is

bas

ed o

n lo

catio

n,pa

rtici

patio

n an

d tim

e of

the

even

t

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$7,0

00.0

0P

otee

t Stra

wbe

rry

Fest

ival

362L

0700

665

the

Gam

es o

f Tex

asan

d en

terta

inm

ent f

or lo

cal c

omm

uniti

es.

Ass

ocia

tion

TLC

atte

ndan

ce is

bas

ed o

n lo

catio

n,pa

rtici

patio

n an

d tim

e of

the

even

t

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$16,

000.

00M

idla

nd R

ockh

ound

s B

aseb

all

3620

7006

59th

e G

ames

of T

exas

and

ente

rtain

men

t for

loca

l com

mun

ities

.TL

C a

ttend

ance

is b

ased

on

loca

tion,

parti

cipa

tion

and

time

of th

e ev

ent

Pro

mot

iona

l eve

nt(s

) to

prom

ote

Eve

nts

are

sche

dule

d fo

r par

ticip

atio

nR

enta

l of s

pace

/adv

ertis

ing

$60,

000.

00S

tate

Fai

r of T

exas

362L

0709

114

the

Gam

es o

f Tex

asan

d en

terta

inm

ent f

or lo

cal c

omm

uniti

es.

TLC

atte

ndan

ce is

bas

ed o

n lo

catio

n,pa

rtici

patio

n an

d tim

e of

the

even

t

Exa

min

atio

n of

que

stio

nabl

e O

ther

equ

ipm

ent a

vaila

ble

was

foun

d to

V

ideo

Spe

ctra

l Com

para

tor

$80,

166.

59Fo

ster

and

Fre

eman

US

A In

c.36

2L07

0112

3lo

ttery

tick

ets

be o

utda

ted.

8

Unaudited

Texas Lottery Commission (362)

SCHEDULE OF VEHICLES PURCHASEDFor the Fiscal Year Ended August 31, 2007

Make Model Purchase Price Type of Use Fuel Efficiency

Not Applicable

9

Una

udite

d

Texa

s Lo

ttery

Com

mis

sion

(362

)

SCH

EDU

LE O

F ST

ATE

-OW

NED

OR

LEA

SED

VEH

ICLE

S U

SED

BY

STA

TE E

MPL

OYE

ES

For t

he F

isca

l Yea

r End

ed A

ugus

t 31,

200

7 Ye

ar

Lice

nse

Plat

e M

odel

D

escr

iptio

n N

ame

and

job

title

of e

ach

empl

oyee

aut

horiz

ed to

use

a s

tate

-ow

ned

or s

tate

-leas

ed v

ehic

le:

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

____

19

96

2004

70

9005

86

1890

15

00

Ford

E15

0 D

odge

Ram

Car

go V

an

Ford

Car

go V

an

By

Lotte

ry C

omm

issi

on p

olic

y, a

Com

mis

sion

mot

or v

ehic

le m

ay n

ot b

e as

sign

ed to

a s

peci

fic e

mpl

oyee

or

agen

cy h

ead,

but

mus

t be

avai

labl

e fo

r su

e by

all

elig

ible

em

ploy

ees

auth

oriz

ed t

o op

erat

e th

e ve

hicl

es.

Ther

efor

e, a

ll Lo

ttery

Com

mis

sion

sta

te-o

wne

d or

sta

te-le

ased

veh

icle

s ar

e co

nsid

ered

poo

led

vehi

cles

and

are

use

d in

the

dai

ly c

ours

e of

bu

sine

ss b

y em

ploy

ees

mee

ting

the

Lotte

ry’s

req

uire

men

ts fo

r op

erat

ing

a ve

hicl

e.

10

Unaudited

Texas Lottery Commission (362)

SCHEDULE OF BONDED EMPLOYEES For the Fiscal Year Ended August 31, 2007 LIST OF BONDED EMPLOYEES None

11

Texas Lottery Commission P. O. Box 16630

Austin, Texas 78761-6630 Phone (512) 344-5000 • FAX (512) 478-3682

www.txlottery.org