Report 2012-117 Recommendations

When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below, is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor's assessment of auditee's response based on our review of the supporting documentation.

Recommendations in Report 2012-117: State Athletic Commission: Its Ongoing Administrative Struggles Call Its Future Into Question (Release Date: March 2013)

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Recommendations to Athletic Commission, State
Number Recommendation Status
1

To increase transparency and to ensure that commissioners provide a sufficient level of oversight over the commission's operations and budget process, the executive officer should work with the commissioners to establish written policies and procedures that delineate the executive officer's responsibilities related to communicating with the commissioners.

Fully Implemented
2

To ensure its future financial stability, the commission should work with Consumer Affairs to establish a long-term financial plan that contains the following:
A reasonable annual budget with an accurate forecast of planned expenditures. The commission should determine this budget based in part on its ability or inability to meet the expenditure limitations stipulated in the solvency plan.
The number of inspectors necessary to regulate each type of event. In establishing this number, the commission should take into account the varying size and complexity of the events. It should also determine the cost for each inspector to regulate an event.
An estimate of its costs to regulate different types of events. To arrive at a reasonable estimate, the commission will need to track at least six months of actual expenditures.
The number of staff necessary to perform all of the commission's necessary functions. The commission will need to conduct a workload analysis as soon as possible to determine how many staff it requires and adjust its planned expenditures accordingly.
Funds for athletic inspectors' training that are sufficient to meet the requirement that inspectors receive training within six months of an event that they are scheduled to work.
Strategies to increase revenue. The commission may need to conduct analyses to determine whether the opportunities it is currently considering are legally permissible and fiscally prudent. If so, the commission should take steps to implement those strategies, including seeking any necessary legislative changes.

Fully Implemented
3

The commission should establish a formal policy to ensure that it assigns inspectors to events based primarily on their proximity to the events.

Fully Implemented
4

To ensure that it adequately tracks critical information related to its basic functions and mission, the commission should develop and implement procedures and written guidelines to ensure that it consistently tracks information related to all events and their associated revenues and expenditures. These guidelines should also ensure that it tracks the inspectors it assigns to events and the athletes it licenses.

Fully Implemented
5

To ensure that it adequately tracks critical information related to its basic functions and mission, the commission should, once it has developed a reliable listing of the events it regulates, conduct an analysis to determine the manner in which events affect its financial condition. For example, the commission could compile the expenditures related to each event, including inspectors' wages and travel, and compare its expenditures to the revenue it received. Although the commission may need to regulate small events to ensure that it meets its responsibilities, it should still consider the cost of doing so in order to ensure that it stays within its spending authority.

Fully Implemented
6

To ensure that it adequately tracks critical information related to its basic functions and mission, the commission should ensure that its system for tracking the number of events, the inspectors it assigns to events, and its revenues and expenditures is compatible with the online program Consumer Affairs is developing so that it may easily import this information into the new program when it is complete.

Fully Implemented
7

To ensure that it adequately tracks critical information related to its basic functions and mission, the commission should work with Consumer Affairs to ensure that the new online program will meet its needs and requirements. Once the program is in place, the commission should use it as its central means for tracking its operations.

Pending
8

To ensure that it accurately collects revenue, the commission should formalize policies and procedures directing inspectors to take the necessary steps to make sure they correctly and consistently calculate taxes, assessments, and fees in accordance with state law and regulations.

Fully Implemented
9

To ensure that it accurately collects revenue, the commission should calculate the pension assessment by counting all the complimentary tickets issued, except for working complimentary tickets, not merely the complimentary tickets that are redeemed. If the commission does not agree that it should calculate the pension assessment by counting all the complimentary tickets issued, it should seek a change in its regulations to calculate the fee based only on the number of complimentary tickets redeemed.

Will Not Implement
10

To ensure that it accurately collects revenue, the commission should seek legislation, with the assistance of Consumer Affairs, that requires promoters to submit their broadcast contracts and authorizes the commission to impose penalties on those promoters who refuse to submit these contracts. Once the commission has received a sufficient number of broadcast contracts, it needs to conduct an analysis to determine whether the maximum fee of $25,000 on broadcast contracts is appropriate in light of the amounts of the contracts or whether the fee structure should be increased through a change in state law.

Resolved
11

To ensure that it accurately collects revenue, the commission should continue its efforts to ensure that promoters, inspectors, and staff are aware of their responsibilities related to the accurate reporting of box office information and the submission of key documents that substantiate the reported information.

Fully Implemented
12

To ensure that it accurately collects revenue, the commission should take steps to ensure that promoters adhere to its new process of certifying in writing that the information they provide is complete and accurate.

Fully Implemented
13

To ensure that it accurately collects revenue, the commission should adhere to its regulations by establishing a process for approving ticket printers and maintain a list of those it has approved.

Fully Implemented
14

To correct the deficiencies in its processing of revenue, the commission should continue to ensure the appropriate separation of duties. In addition, the commission should continue to require staff to track revenues received from events and reconcile those amounts to the events' box office reports.

Fully Implemented
15

To ensure that designated employees and officers disclose potential conflicts of interest on their statements of economic interests as the law requires, the commission should notify Consumer Affairs' filing officer promptly when these employees or officers assume or leave office.

Fully Implemented
17

To ensure that it maintains adequate documentation to demonstrate that it has regulated events in accordance with state law, the commission needs to update its policies and procedures to ensure that inspectors prepare and submit key documents after events.

Fully Implemented
18

To ensure that inspectors receive training as state law requires, the commission should conduct trainings every six months, or within six months of an event at which inspectors are scheduled to work.

Fully Implemented
19

To ensure that inspectors receive training as state law requires, the commission should formalize a process to track inspectors' training status.

Fully Implemented
20

To ensure that inspectors receive training as state law requires, the commission should continue to evaluate more cost-effective ways of providing training.

Fully Implemented
21

To ensure that it uses the neurological account as the Legislature intended, the commission needs to conduct a thorough analysis that identifies the average cost of neurological examinations and the number of athletes whom it licenses. If, after performing such an analysis, the commission determines that it cannot comply with the law as it is currently written, it needs to work with Consumer Affairs' legal counsel and the Legislature to determine a reasonable alternative use of the neurological account.

Fully Implemented
22

The commission needs to establish regulations that describe its process for determining its ticket assessment for the neurological account so that it avoids the use of underground regulations.

Pending
23

To operate the pension plan effectively and maximize boxers' benefits, the commission should create policies and procedures for its administration to ensure that it continues to take action to locate eligible boxers, such as issuing periodic press releases.

Fully Implemented
24

To operate the pension plan effectively and maximize boxers' benefits, the commission should create policies and procedures for its administration to ensure that it establishes a formal process that will enable it to better track boxers' mailing addresses.

Fully Implemented
25

To operate the pension plan effectively and maximize boxers' benefits, the commission should create policies and procedures for its administration to ensure that it transfers funds on a regular basis from the pension fund's state account into its investment account.

Fully Implemented
26

To comply with state law governing the pension plan, the commission needs to limit its expenditures for administering the pension plan to 20 percent of the average of the prior two years' contributions to the plan.

Fully Implemented
27

To comply with state law governing the pension plan, the commission needs to discontinue paying the pension plan's administrative costs from its athletic commission fund. It should ensure that it pays those costs only from the pension fund.

Fully Implemented
28

To comply with state law governing the pension plan, the commission needs to, after it has an accurate and complete listing of all licensed athletes and box office information by event type, conduct the analysis to determine the feasibility of expanding the pension plan to cover all athletes and report the results to the Legislature.

Pending
29

To ensure that it promptly addresses this report's findings, the commission should work with Consumer Affairs to develop an action plan to prioritize and resolve its most significant deficiencies within a specified time frame. At the very least, the commission should commit to the following within one year:
Establishing policies and procedures that clearly delineate the roles and responsibilities of the commissioners, the executive officer, and commission staff in the commission's administrative processes, such as developing and approving its budget.
Developing a long-term financial plan based on its actual event revenues and expenditures that includes practical cost-cutting and revenue-enhancing strategies.
Setting up systems to track key information, including revenues, expenditures, events, inspectors, and licensees.
Formalizing administrative policies, procedures, and controls that relate to revenue collection, revenue processing, and separation of duties.

Fully Implemented
Recommendations to Consumer Affairs, Department of
Number Recommendation Status
16

To ensure that all designated parties complete statements of economic interests as the law requires, Consumer Affairs should improve its policies and procedures to ensure that it identifies any incomplete statements and promptly notifies the Fair Political Practices Commission when necessary.

Fully Implemented
Recommendations to Legislature
Number Recommendation Status
30

If the commission fails to implement its plan by the time frame specified, the Legislature should consider transferring the commission's responsibilities to Consumer Affairs.

Partially Implemented


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