REPORT DIGEST

ILLINOIS RACING BOARD

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2020

Release Date:  April 22, 2021

FINDINGS THIS AUDIT:  9

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 1 -- 1
Category 2:  3 -- 4 -- 7
Category 3:  1 -- 0 -- 1
TOTAL:  4 -- 5 -- 9

FINDINGS LAST AUDIT: 11

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State
laws and regulations (material
noncompliance).
Category 2: Findings that are significant
deficiencies in internal control and
noncompliance with State laws and
regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park
Plaza, 740 E. Ash Street, Springfield, IL
62703
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are
also available on the worldwide web at
www.auditor.illinois.gov

SYNOPSIS
• (20-01) The Board did not ensure
requirements for advance deposit wagering
(ADW) licensees to withhold delinquent
child support due from certain winnings
were implemented for all ADW licensees.

• (20-02) The Board did not comply with,
or enforce compliance with, provisions of
the Horse Racing Act of 1975 and the
Illinois Administrative Code at the
racetracks.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO ENFORCE WITHHOLDING OF CHILD
SUPPORT DUE

The Illinois Racing Board (Board) did not
ensure requirements for advance deposit
wagering (ADW) licensees to withhold
delinquent child support due from certain
winnings were implemented for all ADW
licensees.

During our testing of the ADW licensees
withholding of delinquent child support
due from certain winnings, we noted three
of 6 (50%) ADW licensees tested did not
implement a child support withholding
process or integration with the
Department of Healthcare and Family
Services (HFS) data in order to withhold
delinquent child support from winnings
subject to the Internal Revenue Service
(IRS) and withholding on Form W-2G during
Fiscal Years 2019 and 2020.

According to the Board’s annual reports,
ADW licensees paid out $163.8 million and
$171.6 million in winnings to the public
during Calendar Year 2018 and Calendar
Year 2019, respectively.  (Finding 1,
pages 11-12)   This finding has been
repeated since 2016.

We recommended the Board enforce the
Act’s requirements to withhold delinquent
child support from winning wagers subject
to the IRS and withholding on a Form
W-2G.

Board officials concurred with the
recommendation and stated the ADW
licensees are now in full compliance with
the Act.

NONCOMPLIANCE WITH RACING LAWS AND
REGULATIONS

The Illinois Racing Board (Board) did not
comply with, or enforce compliance with,
provisions of the Illinois Horse Racing
Act of 1975 (Act) and the Illinois
Administrative Code (Code) at the
racetracks.  During the current
examination, we conducted walkthroughs
and observations at one standardbred and
one thoroughbred racetrack
(organizational licensees).

During testing, we noted the following:

• For two of 22 (9%) employees tested at
a standardbred racetrack, one employee
was not able to present an identification
badge and another employee’s Board-issued
identification was expired.

• For one of 6 (17%) observed races at a
thoroughbred racetrack, we noted the
horse’s owner or trainer or his/her
representative was not present during
urine extraction and blood sample
testing.  (Findings 2, pages 13-14)  This
finding has been repeated since 2014.

We recommended the Board continue to take
action to ensure compliance by its
employees and licensees with State laws,
rules, and regulations governing horse
racing, including developing appropriate
processes to monitor racetrack operations
for instances of noncompliance and
appropriately address any identified
noncompliance.

Board officials agreed with the
recommendation and stated they have
implemented corrective action to ensure
full compliance.

OTHER FINDINGS

The remaining findings pertain to
noncompliance with annual reporting
requirements, inadequate controls over
employment application forms and
admission tax, inadequate monitoring of
racing requirements, an outdated record
retention schedule, Board composition,
and a lack of change control policy and
inadequate segregation of duties. We will
review the Board’s progress towards the
implementation of our recommendations in
our next compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Board for the two
years ended June 30, 2020, as required by
the Illinois State Auditing Act.  The
accountants qualified their report on
State compliance for Finding 2020-001.
Except for the noncompliance described in
this finding, the accountants stated the
Board complied, in all material respects,
with the requirements described in the
report.

This compliance examination was conducted
by Adelfia LLC.

JANE CLARK
Division Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:PH