ND Racing Commission Audit Finds Overspending, Missing Records, and Purchasing Violations
Summary
The ND State Auditor's audit of the North Dakota Racing Commission (July 1, 2021 to June 30, 2025) identified four issues of concern. The Commission spent up to 201% more than the legally permitted 25% of its Promotion Fund balance on operating expenses during the four-year period. Of 13 sampled grants totaling $1.8 million awarded, three grants worth $25,500 were paid without any grant applications on file. Itemized expense reports for $7,500 in grants were also unavailable. Two of 12 reviewed Breeder Fund awards totaling $1,957 went to horse owners who failed to provide required ownership-transfer records. Additionally, $63,675 of $590,300 in goods and services procured did not follow state procurement requirements.
“The Commission spent much more than this on operating expenses, up to 201% more than allowed during the four-year audit period.”
Government agencies that manage Promotion Funds, Breeder Funds, or similar special-purpose fund accounts should verify their spending stays within statutory percentage limits, that grant awards are made only after applications are received and documented, and that all procurement follows state requirements. The specific dollar thresholds ($25,500 in grants without applications, $63,675 in non-compliant procurement, $1,957 in Breeder Fund awards to unqualified recipients) provide reference points for internal audit scoping.
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What changed
The North Dakota State Auditor's audit of the Racing Commission identified four financial-control deficiencies during the period July 1, 2021 through June 30, 2025. The Commission exceeded state-law spending limits on its Promotion Fund, awarded grants without documented applications, failed to maintain required expense documentation for grant awards, and made $63,675 in purchases without following mandatory state procurement procedures.
State agencies and commissions receiving dedicated funds should review their spending limits, grant-application documentation requirements, expense reporting practices, and procurement procedures against state requirements to identify and remediate similar control weaknesses before the next audit cycle.
Archived snapshot
Apr 22, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Audit Finds Overspending, Missing Records, and Purchasing Violations at Racing Commission
Wednesday, April 22, 2026 - 09:58 am
Categories: News Releases An audit of the North Dakota Racing Commission, the state agency overseeing horse racing, has found four issues of concern.
Overspending of Promotion Fund
The Racing Commission has a Promotion Fund. The purpose of that fund is to promote racing and develop racetracks in the state. State law only allows the Commission to spend up to 25% of the fund balance per year for operating expenses. The Commission spent much more than this on operating expenses, up to 201% more than allowed during the four-year audit period.
Grant Criteria Not Met
There are grants that are awarded through the Promotion Fund. The purpose of the grant program is to benefit horse racing in the state. The Commission awarded 43 grants totaling $1.8 million during the audit period. Our team sampled and reviewed 13 of those grants. Out of the 13, the audit team found that three grants totaling $25,500 were awarded, but no grant applications were submitted. Additionally, itemized reports showing how money was used for $7,500 worth of grants was not available. Itemized expense reports are important because they show that taxpayer dollars are being used in the way the grant is intended.
Requirements Not Met for Breeder Fund Awards
There is a Breeder Fund that provides money for North Dakota bred horses that race. 306 awards totaling $1.1 million were given during the audit period. Out of the 12 awards our team reviewed, our team found that two of those awards totaling $1,957 went to horse owners who did not provide records of ownership transfer, which is a requirement of receiving money from this fund.
$63,675 of Services Not Procured Correctly
When making large purchases, state agencies are required to follow state procurement requirements. This makes sure that agencies are receiving the best available price for services and using taxpayer money effectively. It also makes sure that the full scope of work and compensation are agreed upon by both parties. The Commission procured $590,300 worth of goods and services during the audit period. Of that total, $63,675 did not follow procurement requirements.
The audit period was from July 1, 2021, to June 30, 2025. To download the full audit report, click here.
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