The California commission that regulates boxing, mixed martial arts and similar sporting events has been so badly managed for so long that it's time to think about axing it, a new audit says.
The State Athletic Commission has mismanaged its finances, failed to document facility and equipment safety inspections, mishandled revenue collections from promoters and bungled boxers' pension payments, according to State Auditor Elaine Howle.
"Over the past 10 years, a number of audits and reviews have noted serious deficiencies in the commission's administration," the audit notes, "yet the commission has consistently failed to address these issues."
A Senate committee plans next month to review the commission's history and decide whether it should continue to exist. The audit said it may be time for the commission to go.
"If the commission is unable to make significant improvements within a specified time frame, we believe the Legislature should consider transferring the commission's responsibilities to (the Department of ) Consumer Affairs."
The commission operates on money collected from regulating sporting events and facilities. It ended fiscal year 2011-12 with just $23,000 in its fund, the auditor says, enough to cover just three days of operations. Commissioners didn't know about the funding crisis last year because then-Executive Director George Dodd didn't communicate with the board. Dodd resigned July 31.
The solvency plan that commissioners have since adopted assumes a 35 percent cut in costs from the $1.83 million budgeted in 2011-12. It may not be realistic.
"We are concerned that many of the changes the plan outlines may prove impractical and too drastic to sustain over time," the audit says.
The commission's operations are so upside-down that it probably lost money regulating some events. It's hard to know for sure because inspectors sometimes miscalculated the state's take or missed some calculations entirely, leaving the commission vulnerable to "human error or fraud," according to the audit. In several instances, commission staff didn't obtain ticket order data, box office receipts and seating plans to corroborate information that promoters reported for purposes of paying the state its share.
From 2002-03 through 2008-09, the commission failed to make any pension payments to eligible boxers or their beneficiaries "in part because it lacked a policy for locating these boxers," the audit says. It started distributing payments the next year, but only 14 percent of those eligible received any money.
In letters accompanying the audit, Consumer Affairs Director Denise Brown and commission Executive Director Andy Foster say their organizations agree with the report and that the commission is implementing policies and procedures to correct the issues the report highlights.