Issue Area 2: Racing Commission Employees are not receiving Annual or
Employees of the Racing Commission are full time state employees and are paid a per diem for each day of work. These employees do not receive annual or sick leave benefits that are provided to all full time state employees because of the Commission's method of wage payment. These employees are members of the state retirement system and participate in the state insurance program. These employees suffer wage losses when it is necessary for them to be off work. The employees are not able to apply accrued leave to pay for insurance premiums when they retire. They are also unable to apply accrued leave to their years of service, which increases monthly annuity. The lack of accrued leave has a detrimental impact on the Racing Commission's state employees. The Legislative Auditor is concerned that the integrity of the industry is jeopardized by the lack of benefits. Since employees cannot take a vacation or a sick day without diminishing their pay, a situation exists where Commission employees may become vulnerable to unethical influence.
Issue Area 3: The Racing Commission Lacks the Necessary Controls for
Expenditures for the WV Breeder's Classic
The West Virginia Breeders Classic began in 1987 and is a stakes race program for West Virginia bred or sired horses. The Breeders Classic has received funding from two different sources. Originally, funding came from the unredeemed pari-mutuels account. Since 1997, funding comes from video lottery. The Racing Commission places these funds in a separate, local bank account. From this account, the Commission issues checks which are signed by the Executive Secretary and the Chairman for expenses related to the West Virginia Breeders Classic. No expenses related to the Breeder's Classic are processed through the State Auditor.
Since 1995, the West Virginia Racing Commission reimburses a non-profit corporation, the WV Breeder's Classic, LTD. for expenses related to the promotion of the West Virginia Breeder's Classic races. There is no grant agreement or contractual agreement between the Commission and the WV Breeder's Classic, LTD. The Legislative Auditor is unable to determine the appropriateness of these expenditures without an agreement in place. If these reimbursements for expenditures were under the oversight of the State Auditor, reimbursement would not be approved without a written agreement specifying the criteria for allowable expenses. The West Virginia Racing Commission has failed to conform to state purchasing procedures.
The funding for the West Virginia Breeders Classic races provides the thoroughbred industry with a racing program where purses paid to winners range from $35,000.00 to $150,000.00 The expenditures that are reimbursed to the WV Breeder's Classic, LTD. are currently questionable due to the Commission's failure to enter into any type of contractual agreement. The Racing Commission has taken some action to rectify this situation by requesting a budget for 1999 from the Breeder's Classic, LTD. The Racing Commission needs to determine: what type of agreement is needed; the types of allowable costs to be reimbursed and; the maximum amount the WV Breeder's Classic, LTD. will be reimbursed for its services.