SARATOGA SPRINGS, N.Y. (NEWS10) — New York State Comptroller Thomas DiNapoli has released an audit on the New York Racing Association’s (NYRA) purchasing and procurement practices. The audit found that “NYRA does not adequately monitor and oversee its purchase and procurement process; consequently, sufficient competition is not fully promoted and possible overspending may have occurred.”

In 2009, NYRA, a not-for-profit corporation, developed a Purchasing Policy and Procedures Manual. The Manual includes requirements for competitive bidding and the purchasing of goods. The Manual was created after NYRA filed for bankruptcy in 2006 due to poor finances.

The audit looked at purchases between January 2018 and December 2020. The ultimate goal of the audit was to see if NYRA “procured goods and services competitively and in accordance with its policies and procedures.”

Key findings:

  • NYRA made a significant number of purchases without competitive bidding. The corporation instead filed Bid Exception Memos for purchases using single or sole source exemptions.
  • Over 15,000 purchases under $1,000 each, totaling about $4.79 million, were made from suppliers outside the approved vendor list in the Manual.
  • NYRA could not provide copies of change orders to support the payment of over $787,000 to a contractor.
  • Some procurement practices deviated from the Manual requirements. This allowed a NYRA employee to select his company to do business with NYRA and get paid almost $200,000.
  • The comptroller found weaknesses in NYRA’s purchasing and system processes, a lack of segregation of duties, and a lack of risk assessment.

Included in the report are NYRA’s comments on the audit, refuting the Comptroller’s findings. NYRA said the corporation does provide extensive oversight on its purchasing practices and many statements in the audit are misleading or are factually incorrect. The corporation maintains the stance that it does follow the Manual.

“The New York Racing Association, Inc. (NYRA) responded to the OSC findings in great detail and worked closely with the OSC over many months to support an informative and transparent audit process. Unfortunately, as noted in the lengthy NYRA response, the final audit report relies on inflammatory language and mischaracterizations to impugn a procurement process that is effectively monitored internally by NYRA and externally by the New York State Franchise Oversight Board, the state agency specifically tasked with overseeing NYRA’s finances and spending practices,” said Patrick McKenna, Vice President of Communications for NYRA.

“NYRA engages in responsible spending practices and works diligently to adhere to our internal purchasing and procurement practices. NYRA is on sound financial footing because of a prudent and conservative approach to budgeting and planning, and nothing in the OSC report would dispute that. The organization is continuously evaluating our policies to ensure compliance among employees and outside vendors,” said McKenna.

The Comptroller had some recommendations for NYRA stemming from the audit, which include:

  • Strengthening the purchasing and procurement process by updating the Manual, and further adhereing to the process
  • Monitoring purchases and analyzing historical purchasing data
  • Conducting periodic risk assessments of procurement operations
  • Conducting periodic audits of NYRA’s purchasing and procurement process

You can read the full report below.