New York Racing Association
Audit of the Annual Franchise Fee The New York Racing Association is a not-for-profit organization that is franchised by New York State to operate the Aqueduct, Belmont Park and Saratoga racetracks. According to the terms of the franchise, the Association must pay the State certain mandatory fees as well as an annual franchise fee.
We audited the Association's calculation of the annual franchise fee for 1995, 1996 and 1997. We found that the Association used the correct accounting methodology to calculate the fee. However, we identified about $114,000 in expenses that were not documented. We also determined that $2.5 million in revenue that was received in 1998 and posted to 1998 records was related to prior years, and therefore should have been posted to prior year records and used to adjust prior year calculations of the franchise fee. We recommend that Association officials make these prior period adjustments and take steps to ensure that all expenses are adequately documented and necessary for business purposes.
For a complete copy of Report 98-S-6 click here.
For a copy of the 90-day response click here.
For a copy of the associated follow-up report click here.