A new audit by New York State’s financial watchdog says the New York Racing Association does not have adequate oversight and oversight over its procedures for procuring goods and services, resulting in a lack of competition for NYRA contracts and the potential for a racing corporation to overspend.
The NYRA, in a 15-page response totaling half of the audit reports issued by the state audit agency Thomas DiNapoli, countered — point by point — the various allegations made by the audit, including the entire period of financial audits conducted by the state.
For example, the audit found that the NYRA over a three-year period used 302 separate “bid waivers” for $30.5 million in spending “with limited documentation of why at Why would it disrupt the bidding process that should have been?” During the period examined, the audit said the NYRA spent a total of $250.3 million on various goods and services.
The state audit agency’s new audit follows decades of financial criticism by the state’s financial watchdog, the NYRA, which governs operations in the US. Aqueduct race track, Belmont Parkand Racecourse Saratoga.
The NYRA, which is overseen by the state financial supervisory board, has taken a sharp approach in removing statements made in the new DiNapoli audit, using the term “misleading” in 28 separate times in its official response — contained in the audit release — that spanned 15 pages.
“A primary concern is the repeated use of inflammatory headlines, conclusions, and out-of-order statements that mislead the reader. We respectfully stress the importance of (Office of executive officer of the State) scrutinizes its language choices and the consequences of that language, wrote Renee Postel, senior vice president and chief financial officer of the NYRA in the official NYRA response to the DiNapoli’s auditors.
The audit said the NYRA’s procurement practices “deviate” from the NYRA guidelines approved in 2010 by the state’s Franchise Oversight Board, a board established many years ago. years to oversee the racing corporation’s finances. As a result, the audit said, the NYRA awarded “suspicious prizes,” including an employee choosing his company to do business with, $250,000 worth of the NYRA, as well as 15,298 transactions — each transactions under $1,000 — with entities that are not on the approved supplier list and do not have the NYRA purchasing department “questioning why approved vendors could not supply goods or service.”
It said weaknesses were found in the NYRA’s purchasing system and process, as well as a “lack of segregation of duties and a lack of risk assessment and analysis.” It said the NYRA was unable to provide information about a change of order for a construction contract, leaving auditors uncertain whether the additional $787,517 charge was reasonable.
The audit called for a series of internal changes to “enhance the integrity” of the NYRA’s procurement of goods and services.
In its response, the NYRA said its procurement process undergoes “strict scrutiny” both internally and by the state’s own Franchise Oversight Board, established the last time the NYRA was authorized. operates three Thoroughbred racetracks in the state. It said the audit found only a small number of “isolated” incidents that the auditors “subjectively” considered potential problems. It said the audit “failed to present the facts” underlying the claim that the NYRA’s procurement process discourages competition in awarding spending on goods and services.
The auditors, in their own responses to the official NYRA response, tit-for-tat when countering the NYRA’s argument or claiming to defend its procurement procedures.
The NYRA notes that the state-approved procurement manual “explicitly authorizes” the corporation to purchase goods and services without a tender as long as specific criteria are met. It notes that non-bid spending over $50,000 is reported each month to the Franchise Oversight Board, and the NYRA must give the supervisor 30 days’ notice of any non-bid procurement. worth more than $200,000.
In response to the NYRA’s response, the auditors acknowledged disallowing non-bidding spending, but “they should be the exception.” It noted that it found “several examples” where the proposed non-tender transactions did not meet the criteria contained in the NYRA’s procurement handbook.
The NYRA criticized the auditors for saying the procurement manual needed to be updated; The NYRA noted that it has begun a rework of the manual and is actively working with the Franchise Oversight Board on a revised procurement process document. The NYRA said the auditors “deliberately” ignored oral and written statements they made that a manual rewrite had been initiated.
The NYRA later disputed the auditors’ claims, either saying their findings lacked context or were misleading. It noted that summary information was provided on the construction contract change orders, although the auditors said the NYRA did not provide a complete list of documents sought. The NYRA called it “isolated” a 2019 incident in which an employee exploited his company for $200,000 in business with the NYRA; Racing Corporation said it “voluntarily disclosed” that a breach had occurred and that “corrective action” had been taken against the individuals involved; it provided additional details.
The auditors said they found a supplier who awarded a $250,000 contract in 2018 despite not being the lowest bidder, although they said the NYRA did not provide documentation to justify justified the claim that the supplier was exploited for its “ability to meet time constraints and its ability to guarantee and deliver items.”
The audit said there was “perceived bias” in some awards given to “unqualified bidders, which it said” that may discourage other suppliers from submitting bids. contractors in the future because they may believe they do not have a fair chance to be awarded the contract. It also criticized the use of the small cash system by some NYRA divisions.
The audit raised questions about everything from car wash purchases to gun rentals and nearly $19,000 in vocal training for streaming broadcasters and the NYRA president; The NYRA defended vocal coaching as a business decision made in 2018 when Belmont Stakes had the potential to win the Triple Crown.
The audit said the NYRA used a “single source exception” for a “specific artist” to perform at the 2019 Belmont Stakes for a total of $160,000, and offered “no explanation” why the Less expensive artists are not used. Hip-hop artist Flo Rida was hired by the NYRA to perform at the Belmont Stakes that year.
Patrick McKenna, a spokesman for the NYRA, said the racing group had been working with the state controller’s office for months “to support a transparent and informative audit process.”
McKenna said the NYRA “engages in responsible spending practices and works diligently to adhere to our internal purchasing and procurement practices” and that the company is on strong financial footing. “because of a prudent and prudent approach to planning and budgeting, and nothing in (the comptroller’s reporting state) will dispute that.”
Racing at Belmont . Park
