The embattled Texas Lottery Commission is investigating why the agency paid a Nevada company more than $300,000 for goods it hasn't received.
The lottery's purchasing department authorized an advanced payment to JB & Associates in February 2004 to buy promotional items such as umbrellas, coffee mugs and vinyl wallets, the Fort Worth Star-Telegram reported in its online edition today.
JB, based in Reno, Nev., received at least $332,427, but the lottery said it is still owed about $311,000 in undelivered merchandise. Lottery spokesman Bobby Heith said paying in advance for such goods violates the purchasing policies for state agencies.
"An internal audit into the matter is ongoing, and we have also asked the state auditor's office to look into it independently," Heith said. "This is something that causes us a great deal of concern."
Heith said it was not a criminal investigation but said any evidence that is found to suggest illegal activity will be turned over to the appropriate authorities.
Joel Bowen, who owns JB, said the lottery picked his company in 2003 to procure the items. He turned to an importing broker to get the merchandise from China, where it was to be made. He said the broker wanted to be paid in advance.
Bowen said the broker has told him factors such as a typhoon and escalating oil prices worldwide have contributed to the slowdown.
The purchasing agent who authorized the advance payment has since been dismissed from the commission, said Heith, who declined to say whether her departure was related to the problem.
The revelation is another black eye for an agency that's been sharply criticized for inflating Lotto Texas jackpots.
Executive Director Reagan Greer resigned last week after signing off on an $8 million jackpot for the June 8 drawing when estimations showed ticket sales could only cover $6.5 million.