New York Racing Association
Backstretch Operations The New York Racing Association, Inc. (NYRA) is a not-for-profit organization franchised by New York State to conduct racing and pari-mutuel wagering at the State’s three major thoroughbred racetracks: Aqueduct, Belmont Park and Saratoga. Backstretch facilities at the three tracks provide horse barns and living quarters for the personnel who take care of the horses. We examined NYRA’s management and control of the costs associated with these backstretch operations.
We found that significant improvements were needed. For example, even though NYRA’s records indicated that its operating costs for backstretch operations totaled about $5 million annually, NYRA had not established a system to account for these costs. We had to perform a detailed review of NYRA’s general ledger accounts to develop an estimate for these costs. In the absence of an appropriate cost accounting system, the costs are less likely to be adequately controlled. We noted that, during the three years we audited, NYRA paid certain backstretch expenses totaling about $3 million that are reasonably the responsibility of horse owners and trainers, such as medical insurance for backstretch personnel, recreational expenses for horsemen’s staff, and the operating costs of an equine veterinary clinic.
We also found that NYRA did not always charge horsemen for the stall rental fees that were due. For example, in 2004 alone, we identified more than $300,000 in unbilled stable fees. NYRA is required to pay the State an annual franchise fee that is based on its expenses and revenues, and this fee may be reduced when NYRA incurs unnecessary expenses and fails to collect all due revenue. We recommended NYRA strengthen its controls over its backstretch operations.
For a complete copy of Report 2005-S-29 click here.
For a copy of the 90-day response click here.