The state administration overseeing horse racing failed to exercise adequate control over cash it received and did not always ensure that racetracks handed over taxes owed to the state in a timely fashion, a recent audit found.

The audit, released Monday, was conducted by the state Department of Legislative Services and dated July 17. It found the same person who received the deposits for the Division of Racing, part of the Department of Labor, Licensing and Regulation, was also responsible for recording them.

The Division of Racing implements the policies of the Maryland Racing Commission, a nine-member, governor-appointed panel, which regulates horse racing and betting statewide. The division’s operating expenditures during fiscal 2007 were approximately $6.6 million, according to the audit. The audit covered a period from Aug. 15, 2005, through Feb. 3.

Auditors also found that taxes on wagers at the tracks were not always transferred to the state within a three-day period following a race as required by state law. The audit found that for 61 of 62 days during fiscal years 2007 and 2008, $105,000 in taxes was transferred from one to 11 days after the required date.

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A previous audit of the division dated Feb. 10 found a similar problem. 

“Untimely transfer of funds to the state’s bank account results in lost interest income and increases the potential for misappropriation of these cash assets,” auditors said in their report.

Representatives of the Maryland Racing Commission could not be reached for comment Monday. A Department of Labor, Licensing and Regulation spokeswoman said the department would have no comment beyond a response from Secretary Thomas Perez attached to the audit.

In that response, Perez said the division would reassign responsibilities to meet auditors’ recommendations. He said they would also monitor tax submissions from state tracks, and take action if the seven-day limit is exceeded.

acahall@baltimoreexaminer.com