Report 2012-117 All Recommendation Responses

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

Recommendation #1 To: Athletic Commission, State

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.

6-Month Agency Response

The Executive Officer and the Commissioners approved a policy at the June 10, 2013 Commission meeting. Policy 2013-02 memorializes the Executive Officer's duties and responsibilities as they relate to communication with the Commissioners.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The Executive Officer and the Commissioners plan to approve a policy at the June 10, 2013 Commission meeting. Policy 2013-02 memorializes the Executive Officer's duties and responsibilities as they relate to communication with the Commissioners.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #2 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From October 2016

We have worked with the Department of Consumer Affairs to develop a long term financial plan. We have had multiple budget change proposals that has increased the Commission's operating budget. We have identified the number of inspectors needed by the event size, venue type, television presence, number of bouts, number of drug tests given, etc. We have a master sheet that tracks the number of events we regulate and all data associated with those events. Staff updates that sheet weekly. We have allocated money in future budgets for Athletic Inspector training. We have worked to increase revenue and the strategy for increasing revenue involves excellent officials, customer service, superb drug testing, concussion management, attention to dehydration and rehydration, and an overall focus on training and preparation. A workload analysis has been completed and will be sent to your office.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Based on its last annual response, we determined that the commission had implemented all elements of this recommendation except for the workload analysis.The commission performed and provided this workload analysis as part of its current response. Thus, this recommendation is fully implemented.

Annual Follow-Up Agency Response From September 2015

The Commission began a workload analysis in August 2015 and plans to have this recommendation completed by October 15, 2015.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2014

This recommendation is almost fully implemented. The only item we are lacking is the workload analysis. We plan to complete a workload analysis in approximately 6 months.

We currently have 7 staff members, one of which is out on maternity leave and one is about to take maternity leave. 6 months is a good projection of getting this recommendation fully implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The Executive Officer and the Commissioners worked closely to develop a reasonable budget that focused on reasonable expenditures with a conservative revenue forecast. This budget was approved at the June 10, 2013 Commission meeting.

The Commission has determined the number of inspectors needed with 4-5 being the minimum and 5-6 being the norm.

The Commission has been tracking the various events that it regulates which began in January 2013.

We have not made any more progress on the workload analysis recommendation. We plan to begin again in a few months.

The Executive Officer and the Commission have worked closely with Consumer Affairs and secured a $200,000 supplemental to next year's budget that is available for inspector wages, travel, and training.

Update: The Commission voted unanimously to approve the long term financial plan at the June 10, 2013 meeting.

Update: SB 309 that specified all of the strategies to increase revenue has now been passed by the Senate and the Assembly and is awaiting the Governor's signature.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

6-Month Agency Response

The Executive Officer and the Commissioners worked closely to devlop a reasonalbe budget that focused on reasonable expenditures with a conservative revenue forecast. This budget was approved at the June 10, 2013 Commission meeting. Please see attachments 2 and 8.

The Commission has determined the number of inspectors needed with 4-5 being the minimum and 5-6 being the norm. Please see attachment 3.

The Commission has been tracking the various events that it regulates which began in January using November's numbers and have completed six months of tracking. Please see attachment 3.

We have not made any more progress on the workload analysis recommendation. We plan to begin again in a few months.

The Executive Officer and the Commission have worked closely with Consumer Affairs and secured a $200,000 supplemental to next year's budget that is available for inspector wages, travel, and training.

Update: The Commission voted unanimously to approve the long term financial plan at the June 10, 2013 meeting. Please see attachments 2, 8 and 9.

Update: SB 309 that specified all of the strategies to increase revenue has now been passed by the Senate and the Assembly and is awaiting the Governor's signature. Please see attachment 4.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The executive officer and the commissioners are working together with Consumer Affairs' budget office to develop a reasonable budget. The Commission determined the number of inspectors needed, with 4-5 being the minimum and 5-6 being the norm. For larger events, to ensure all locker rooms and anti-doping procedures are followed, the Commission may assign more inspectors. The Commission has completed five months of event tracking. The Executive Officer is updating a workload analysis and estimates that the commission is 25 percent complete. He plans to coordinate with Consumer Affairs' Human Resource Office to help complete a detailed work load study and plans to have one completed by the commission's six month response. The executive officer and the commission worked with Consumer Affairs and secured a $200,000 supplement to next year's budget that is available for inspector wages, travel, and training. The Commission has worked with Consumer Affairs and Legislative staff to add many revenue enhancing strategies to the Commission's sunset bill. Some of those strategies include a raise in the TV tax cap, charging for federal identification card creation, and a creation of a new license type.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Recommendation #3 To: Athletic Commission, State

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

60-Day Agency Response

The commission implemented a policy that assigns inspectors to events based primarily on their proximity to the events.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #4 To: Athletic Commission, State

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.

6-Month Agency Response

This was covered in our 90 Day response.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission developed a policy related to tracking relevant event information.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #5 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: This analysis has been performed. With new cost saving measures the Commission is very rarely losing money on even the smallest events. With the revenue strategies of Senate Bill 309, should it pass the Commission will cease to regulate revenue negative events.

Update: With the passage of SB 309 and with the analysis that has been performed, the Commission is rarely losing money of events that it regulates. Should SB 309 be signed by the Governor, that should ensure that the Commission no longer loses money on any events.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission performed a preliminary analysis and believes it is very rarely losing money on even the smallest events.

California State Auditor's Assessment of 60-Day Status: Pending

The commission needs to perform its analysis on at least six months of events to determine the manner in which events affect its financial condition.

Recommendation #6 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From September 2014

Consumer Affairs has assured the Commission that the licensing database we are using is Breeze compliant. The inspector tracking spreadsheet is similar, and we plan to work with Consumer Affairs once the Athletic Commission begins transitioning to the new online database system and ensure that the information migrates without problems.

I am aware this is the same response as in April, however, I have no new information to provide. The Commission is in phase 3 of the Breeze rollout and the implementation of Breeze has been delayed. The Commission still is using the spreadsheet that is Breeze compliant.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

Consumer Affairs has assured the Commission that the licensing database we are using is Breeze compliant. The inspector tracking spreadsheet is similar, and we plan to work with Consumer Affairs once the Athletic Commission begins transitioning to the new online database system and ensure that the information migrates without problems.

California State Auditor's Assessment of 1-Year Status: Pending

Until the commission fully transitions to Consumer Affairs' online program and is able to demonstrate that its system is compatible with Consumer Affairs' online program, we will continue to report the status of this recommendation as pending.

6-Month Agency Response

CSAC Response: DCA has assured the Commission that the licensing database we are using is Breeze compliant. The inspector tracking spreadsheet is similar, but we will need to work with DCA to ensure that the information migrates without problems.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The commission stated that Consumer Affairs assured the Commission that its licensing database is compliant with Consumer Affairs' new online system. The commission indicated that will need to work with Consumer Affairs to ensure that the information migrates without problems.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #7 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From November 2019

As previously reported, the California State Athletic Commission (CSAC) in conjunction with Department of Consumer Affairs, has developed a Business Modernization Plan to effectively facilitate the analysis, approval, and potential transition to a new licensing and enforcement platform. The Plan outlines an approach to identifying CSAC specific business needs.

The Commission began its Business Activities in October 2019, per its reported schedule. Commission staff and department staff of the Organizational Improvement Office have begun weekly analysis and documentation of their current 68 business processes. Though early, the efforts are promising. The next major milestone is to begin the Project Approval Lifecycle (PAL) and achieve an approved Stage 1 package by October 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2018

The California State Athletic Commission (CSAC) in conjunction with Department of Consumer Affairs, has developed a Business Modernization Plan to effectively facilitate the analysis, approval, and potential transition to a new licensing and enforcement platform. The Plan outlines an approach to identifying CSAC specific business needs, determining cost- effective options, and proposes initial schedules. The Plan also considers the impacts and requirements of the Project Approval Lifecycle (PAL), the project approval process required by the California Department of Technology. CSAC will perform a mandated cost-benefit analysis, or determine the cost effectiveness of each alternative platform, during Stage 2 of the PAL process. The Financial Analysis Worksheets, required in Stage 2, facilitate fiscal planning and comparison, and will be used to determine cost-benefit specifically for CSAC.

CSAC began meeting with DCA project staff in May, 2017. Initial meetings included general education and discussion about the business modernization effort and its staff and time demands. Since identifying CSAC-specific needs via business analysis is the first step, CSAC inventoried their business processes in August 2017. The CSAC has initially identified 64 business processes across their enterprise. This inventory informed the initial schedule for business analysis facilitated by DCA Organizational Change Management staff. CSAC is currently scheduled to begin business analysis in October 2019. The thorough planning, business analysis, and CSAC-specific nature of this effort will ensure success for the Commission.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The commission has taken the first step in addressing this recommendation by working with Consumer Affairs to develop a business modernization plan, which will ultimately result in a new licensing and enforcement platform.

Annual Follow-Up Agency Response From November 2017

The California State Athletic Commission (CSAC) in conjunction with Department of Consumer Affairs, has developed a Business Modernization Plan to effectively facilitate the analysis, approval, and potential transition to a new licensing and enforcement platform. The Plan outlines our approach to identifying CSAC specific business needs, determining cost effective options, and proposes initial schedules. The Plan also considers the impacts and requirements of the Project Approval Lifecycle (PAL), the project approval process required by the California Department of Technology. CSAC will perform a mandated cost benefit analysis, or determine the cost effectiveness of each alternative platform, during Stage 2 of the PAL process. The Financial Analysis Worksheets, required in Stage 2, facilitate fiscal planning and comparison, and will be used to determine cost benefit specifically for CSAC. CSAC began meeting with DCA project staff in May 2017. Initial meetings included general education and discussion about the business modernization effort and its staff and time demands. Since identifying CSAC-specific needs via business analysis is the first step, CSAC inventoried their business processes in August 2017. The CSAC has initially identified 64 business processes across their enterprise. This inventory informed the initial schedule for business analysis facilitated by DCA Organizational Change Management staff. CSAC is currently scheduled to begin business analysis in October 2019. The thorough planning, business analysis, and CSAC-specific nature of this effort will ensure success for the Commission. Anticipated Date of Implementation: Proposed timelines are included and maintained in the individual Business Modernization Reports and may change due to business resource contention. CSAC progress through business modernization may change based on program resources, current legislative/business landscape, complexity, fiscal landscape, and the PAL process.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2016

The Commission will look to transition to a new IT platform in the future. An important step in that transition will be performing thorough business planning to determine and document the functional requirements specific to the Commission that are necessary in the new platform. The business planning will include an inventory of all business processes, workflow for each business process, specific use cases for each process, and development of functional requirements based upon these artifacts. The Commission will partner with the Department on completion of these tasks to ensure a smooth transition to the new platform. While we plan for this transition, we are tracking critical information needed to fulfill the mission of health and safety for the athletes and public.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2015

The Commission responded on 9/26/14 that it will work with the Department of Consumer Affairs to ensure that BreEZe meets our requirements. DCA initially scheduled the Commission to begin planning and implementation in Release 3. However, Release 3 has been delayed pending a cost benefit analysis. Once the cost benefit analysis has been completed, the Commission will have more information regarding implementation.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2014

The commission will work with Consumer Affairs to ensure that the new online program meets our needs and requirements. Consumer Affairs has scheduled the commission to begin implementation of the new online program with phase three boards and bureaus. Consumer Affairs is working with phase one boards and bureaus now. The commission plans to use the new online program as our central means for tracking operations once it is fully implemented.

I am aware this is the same response. I have no new information to provide. We are in the third phase of the Breeze rollout and Phase 2 is not expected to rollout for another year.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

The commission will work with Consumer Affairs to ensure that the new online program meets our needs and requirements. Consumer Affairs has scheduled the commission to begin implementation of the new online program with phase three boards and bureaus. Consumer Affairs is working with phase one boards and bureaus now. The commission plans to use the new online program as our central means for tracking operations once it is fully implemented.

California State Auditor's Assessment of 1-Year Status: Pending

Until the commission fully transitions to Consumer Affairs' new online program and can demonstrate that the program adequately tracks information critical to the commission's operations, we will continue to report the status of this recommendation as pending.

6-Month Agency Response

CSAC Response: This is early in the Breeze rollout. The Commission cannot give a proper comment on this recommendation.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The commission stated that it cannot give a proper comment on this recommendation because Consumer Affairs has not begun to put its new online system in place.

California State Auditor's Assessment of 60-Day Status: No Action Taken

Recommendation #8 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From September 2015

The Commission has formalized and implemented procedures to ensure the Commission is correctly and consistently calculating taxes, assessments and fees in accordance with the state law and regulations.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From September 2014

As we said in April, we expect this to be completed by January of 2015.

We may need a little more time due to unexpected leave of absences.

Please see our response from April 2014

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

This is a policy that the Commission is discussing at the June 9th inspector training in southern California. We are covering box office, but more importantly, we are working to get everyone to perform the box office functions the same way. The Commission has created an MS Excel file that calculates box office automatically; some inspectors continue to use a calculator. While the Commission is more focused on the amount being correct and not the micromanagement of individual inspectors, we agree that a standardized process would be beneficial.

Update: During the latest training for inspectors, a large portion of the classes were spent on box office. We are still formulating a policy, but educating the inspectors for proper calculation is paramount to the success of any policy. We used several models to educate the inspectors and worked in groups to solve the calculation exercises. Based upon our internal best practices, the training was taught to the inspectors on the proper way to calculate the box office. The policy to make this calculation is being created using this method established in the training. This method is obviously directly linked to the fees set by the Commission that are established by the Title 4 regulations and the Business and Professions code. Final policy will be developed once SB309 is signed into law by the Governor.

Update: SB309 became effective January 1, 2014 and the Athletic Commission began assessing the new fees associated with the new legislation. New forms have been developed and box office reports are being audited. We anticipate creating the final process within the next few months.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

6-Month Agency Response

CSAC Response: This is a policy that the Commission is discussing at the June 9th inspector training in southern California. We are covering box office, but more importantly, we are working to get everyone to perform the box office functions the same way. The Commission has created an MS Excel file that calculates box office automatically; some inspectors continue to use a calculator. While the Commission is more focused on the amount being correct and not the micromanagement of individual inspectors, we agree that a standardized process would be beneficial. The Executive Officer and the Chief Athletic Inspector plan to meet with the lead inspectors to standardize this practice. Once that is established, a formal procedure can be written. We agree that this should be performed, and the Commission has taken steps to address this, but we are still in the development phase of implementing this recommendation.

Update: During the latest trainings for inspectors, a large portion of the classes were spent on box office. We are still formulating a policy, but educating the inspectors for proper calculation is paramount to the success of any policy. We used several models to educate the inspectors and worked in groups to solve the calculation exercises. Based upon our internal best practices, the training was taught to the inspectors on the proper way to calculate the box office. The policy to make this calculation is being created using this method established in the training. This method is obviously directly linked to the fees set by the Commission that are established by the Title 4 regulations and the Business and Professions code. Final policy will be developed once SB309 is signed into law by the Governor. Please see attachment 5.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

Although the commission has made great strides in implementing appropriate measures to make sure that inspectors are correctly and consistently calculating taxes, assessments, and fees in accordance with state law and regulations, it is still formulating a policy.

60-Day Agency Response

The commission stated that it is in the process of developing these policies and procedures.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #9 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From November 2019

Commission regulations require promoters to "contribute 88 cents ($.88) on every ticket, excluding a working complimentary ticket as described in section 264, up to a maximum contribution of $4,600 per show" to fund the boxing pension plan. (Calif. Code Reg. tit. 4, section 403, subdiv. (a).) The term "every ticket" is not defined in commission regulation, creating a grey area requiring interpretation of the pension assessment regulation. By longstanding interpretation and practice, the commission has construed the term to mean tickets sold and complimentary tickets redeemed for admission except for working complimentary tickets. This interpretation is consistent with the overall scheme for calculating general revenue provisions. Specifically, when calculating the revenue provisions, only the number of sold and admitted tickets are considered in the calculations. (Bus. & Prof. Code section 18824, subdiv. (a)(2)(D); Calif. Code Reg. tit. 4, section 403, subdiv. (a).) Further, deference on how to interpret regulations is given to the commission. Specifically, under section 408(b) of Title 4 of the California Code of Regulations, the commission, maintains broad power and discretion to construe the terms of its pension regulations and to determine all questions arising in connection with the pension plan. The regulations further state that the commission's determinations on such questions are conclusive and binding upon all persons. (Calif. Code Reg. tit. 4, section 408, subdiv. (b).)

While the commission has the power and authority to conclusively interpret its pension regulations, the commission recognizes that an amendment to the pension assessment regulation replacing the term "every ticket" with the term "tickets sold and non-working complimentary tickets redeemed for admission" would be the prudent course. Thus, the commission intends to consider putting forth an amendment to the regulations.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2018

As CSAC responded on September 26, 2014, it does not agree with Auditors interpretation of CSAC's rules. Furthermore, the Auditor's interpretation would devastate the industry, as comp tickets are used to market events. Counting the complimentary tickets issued, rather than the complimentary tickets redeemed, is not the intent of the regulation and would lead to an unreasonable result.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2017

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.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

The commission did not provide an explanation as to why it will not implement this recommendation. Rather, it simply reiterated our recommendation.

Annual Follow-Up Agency Response From October 2016

The Commission does not agree that it should calculate the pension by counting all the complimentary tickets. It is a common industry business practice for promoters to have a small reserve of complimentary tickets that are used and given away to encourage attendance and to promote the boxing event to the general public. Not all of the printed complimentary tickets are redeemed. The pension assessment should be based on redeemed tickets since the redeemed tickets reflect the actual attendance of people at the event who actually watched the contests. Fees due to the Commission for pension fund contributions are based on the amount actually paid for admission (Bus. & Prof. Code 18824(a)(2)(C).) Consequently, the fee assessment should be based upon the number of actual tickets that were redeemed. For purposes of regulatory clarity, the Commission may seek a change its regulations to clearly specify that the fee owed is based on the number of tickets redeemed.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

The commission is seeking a change to its regulations related to the pension assessment and, based on documentation it submitted as part of its annual response, anticipates the changes will become law in early 2017. Until this occurs, we will report the status of this recommendation as pending.

Annual Follow-Up Agency Response From September 2015

As the Commission responded on 9/26/14, it does not agree with Auditors interpretation of the Commission's rules. In addition, the Commission's interpretation of its rules is correct.

Furthermore, the Auditor's interpretation would devastate the industry, as comp tickets are used to market events. Counting the complimentary tickets issued, rather than the complimentary tickets redeemed, is not the intent of the regulation and would lead to an unreasonable result.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From September 2014

Upon further review, the Commission does not agree with this interpretation of it's rules. The Commission is the interpreter of its rules and it believes that this is not correct.

This interpretation would devastate the industry, as comp tickets are used to market events. Counting every comp ticket issued, rather than comp tickets actually redeemed is not the intention of the regulation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

1-Year Agency Response

The Executive Officer and the Chairman discussed this recommendation and respectfully disagree with the interpretation of Bureau of State Audits. This recommendation is on the October 7th, 2013 Commission agenda to provide a regulation fix to avoid further confusion on how to calculate complimentary tickets that are not redeemed. Please see attachment 6.

Update: The Commissioners agreed to adopt new language related to the complimentary ticket assessment and regulations will be drafted within two months.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The Executive Officer and the Chairman discussed this recommendation and respectfully disagree with the interpreation of Bureau of State Audits. This recommendation is on the October 7th, 2013 Commission agenda to provide a regulation fix to avoid further confusion on how to calcualate complimentary tickets that are not redeemed. Please see attachment 6.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The commission is pursuing changes in its regulations to ensure it is compliant with state law. In addition, the commission is working with Consumer Affairs' legislative staff to clarify state law.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #10 To: Athletic Commission, State

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.

6-Month Agency Response

The Commission disagrees with this recommendation and we are respectfully submitting to the BSA that asking the Legislature to raise the TV tax cap is all the Commission is planning to do on this recommendation.

Further explantion can be found in the Commission's 90 day response.

California State Auditor's Assessment of 6-Month Status: Resolved

Although the Commission will not require promoters to submit broadcast contracts, the legislation that recently became law--Chapter 370, Statutes of 2013--increases the maximum fee for broadcast contracts and thus resolves our recommendation.

60-Day Agency Response

The commission does not believe that promoters will submit broadcast contracts; however, the commission is pursuing legislation to increase the maximum fee for broadcast contracts.

California State Auditor's Assessment of 60-Day Status: Pending

The commission is not pursuing legislation to require promoters to submit broadcast contracts. Instead, the commission is seeking legislation to increase the fees charged to promoters.

Recommendation #11 To: Athletic Commission, State

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.

6-Month Agency Response

We provide the promoters a promoter responsibilities worksheet. This worksheet was created in direct collaboration with Chairman Frierson. Additionally, inspectors are provided training as required by law every six months and an office staff member verifies the accuracy of each box office report. The inspectors are given this worksheet along with the promoters to ensure that the requirements are met and enforced.

This sheet was provided to the BSA during our 90 day response. Another can be provided if requested.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission now provides promoters a promoter responsibilities worksheet that the commission created in collaboration with the chairman. The inspectors are given this worksheet along with the promoters to ensure that the requirements are met and enforced. Additionally, the commission is providing inspectors with training as required by law every six months related to collection revenue. Finally, an office staff member verifies the accuracy of each box office report.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #12 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: Our box office forms now require signature under penalty of perjury. Please see attachment 10.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission's box office forms now require signature under penalty of perjury.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #13 To: Athletic Commission, State

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.

6-Month Agency Response

We have approved many ticket printers and get more applications perodically. We have a process of approving these printers.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission established a policy for approving ticket printers and has approved several ticket printers.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #14 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: We are continuing to do this.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission stated that it continues to ensure proper separation of duties. by require staff to track revenues received from events and reconcile those amounts to the events' box office reports

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #15 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: The commission will ensure that the filing officer is notified of the names of those commission members who have not submitted their Form 700 by the deadline so that he can follow-up with the appropriate communication before reporting them to the Fair Political Practices Commission.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission indicated that it will ensure that it notifies the filing officer of the names of those commission members who have not submitted their statements of economic interest.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #16 To: Consumer Affairs, Department of

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.

Annual Follow-Up Agency Response From October 2016

In January 2016, the Department of Consumer Affairs (Department) implemented an online, paperless filing system for all of its designated filers to ensure timely and complete filing of Statement of Economic Interest (Form 700) upon appointment, annually every April 1 and upon leaving the Department. The Department's nearly 1600 designated filers now use NetFile, a paperless online system to electronically file their Form 700. This online filing is available 24 hours a day, seven days a week from any computer with internet access. NetFile ensures required data is complete and allows the Department and its Boards and Bureaus to monitor, as well as follow up with filers before important deadlines. Moreover, all data is saved for future filings and can be accessed and updated by the filer at any time.

All of the California State Athletic Commission's designated filers completed an annual Statement of Economic Interest before the April 1, 2016 deadline. Included below is an example of the data pulled from the Department's NetFile system.

Name Type Filed Deadline Department Position

Ayala, Luis An 3/21/2016 4/1/2016 CSAC Commissioner

Carve, John An 3/17/2016 4/1/2016 CSAC Commissioner

Corne, Sophi An 2/17/2016 4/1/2016 CSAC SSManager I

Fost, And An 3/16/2016 4/1/2016 CSAC Exec Officer

Frier, John An 3/28/2016 4/1/2016 CSAC Commissioner

Lehman, Mary An 3/30/2016 4/1/2016 CSAC Commissioner

Saut, VanGor An 3/18/2016 4/1/2016 CSAC Commissioner

ShenUr, Mar An 3/23/2016 4/1/2016 CSAC Commissioner

Williams, V An 3/21/2016 4/1/2016 CSAC Commissioner

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From September 2015

The Department of Consumer Affairs continues to work closely with the California State Athletic Commission (CSAC), as well as all Boards within the DCA umbrella, to ensure all conflict-of-interest filings are timely and complete. To streamline its current procedures and ensure that all designated parties complete Form 700s correctly and timely, the Department executed the purchase order for an electronic conflict-of-interest filing system on September 3, 2015. This online filing system will provide custom notification to filers, ensure minor errors are corrected before filing with the Fair Political Practices Commission and enable the Department to monitor the status of each filer's forms (not started, started but not completed, completed and submitted) and run management reports.

The Department is currently working with the vendor on the specific needs of the system to best serve its designated filers. The Department anticipates access to the new online Form 700 filing system will be available later this year. At that time, the Department will distribute a revised conflict-of-interest procedures memo to all filers, as well as the necessary training modules, in order to properly educate, register and prepare users of the new conflict-of-interest filing system.

Policies and procedures regarding the Form 700 Statement of Economic Interests are outlined in the Department's Board Member Orientation Training, which Board Members are required to complete within one year of assuming office. Additionally, the Deputy Director for Board and Bureau Relations regularly communicates with Bureau Chiefs, Executive Officers and Board Members regarding Form 700 filing deadlines. The Department also has an attorney in its Legal Unit designated as the Ethics Officer available to answer conflict-of-interest questions.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

In April 2014, the Department re-assigned the Filing Officer responsibility, obtained additional training from the Fair Political Practices Commission and established an internal automated Board Member database that records and tracks the trainings and forms Board Members are required to complete by law, including the Form 700 Statement of Economic Interests. The Board Member database is now the single repository to track Form 700 Statements, allowing the Department to proactively follow up with Board Members and ensure filing deadlines are met.

Additionally, the OHR is thoroughly reviewing departmental procedures to ensure the roles and responsibilities for all parties in the process are clearly defined. A revised procedure memorandum is in development and the Filing Officer will increase communication with the program liaisons, to ensure more timely information on new and departing staff is provided to the Filing Officer.

The Department intends to procure an electronic conflict-of-interest filing system which will have the capability to provide custom notification to filers, ensure minor errors are corrected before filing, monitor the status of each filer's forms (not started, started but not completed, completed and submitted) and provide timely management reports. The Department expects the e-filing system to be operational for the annual Form 700 filing period in April 2015.

Policies and procedures regarding the Form 700 Statement of Economic Interests are outlined in the Department's Board Member Orientation Training, which Board Members are required to complete within one year of assuming office. Additionally, the Deputy Director for Board and Bureau Relations regularly communicates with Bureau Chiefs, Executive Officers and Board Members about the mandatory training requirements and when the trainings/webcasts are available. The Department also has an attorney designated as the Ethics Officer.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The Department continues to work closely with the California State Athletic Commission (CSAC), as well as all Boards within the DCA umbrella, to ensure all conflict-of-interest filings are timely and complete. DCA has provided a copy of the Departments conflict-of-interest procedures process, which includes identifying incomplete statements and notifying the filer and the Fair Political Practices Commission, when necessary.

The Department began developing an internal database to record and track the timely submission of Board Member conflict-of-interest filings (Form 700 assuming office, annual and leaving office), as well as all required trainings. We anticipate this database will be completed by July 2014. This database will allow the Department to audit compliance with the Form 700 deadlines (30 days assuming office, annually April 1, 30 days leaving office), as well as proactively follow up with appointees and designated board staff.

The Department is also researching electronic conflict-of-interest filing systems in use by other government agencies, that allow required filers to create a profile, log in and securely file and e-sign their Form 700.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The Department of Consumer Affairs (DCA) remains committed to achieving implementation of the recommendations contained in your March 2013 report. We continue to work closely with the California State Athletic Commission (CSAC), as well as all Boards within the DCA umbrella, to enhance the conflict-of-interest filing and required reporting processes.

After receiving your March recommendations, we launched a review of our assuming and leaving office procedures. Due to concerns with the accuracy of our database, we are working to enhance and streamline our procedures to accurately track and proactively follow-up with appointees and designated Board staff required to file a Form 700, Statement of Economic Interest, to ensure timely completion of required forms as well as required trainings.

The Department of Consumer Affairs appreciates every opportunity to improve operations at CSAC and all Boards. We take your recommendations seriously and look forward to reporting additional progress to you in our one-year response.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Consumer Affairs indicated that follows the guidelines as set forth in the Fair Political Practices Commission Notification Guidelines for Filing Officers Statement of Economic Interests.

California State Auditor's Assessment of 60-Day Status: No Action Taken

Although Consumer Affairs indicated that it follows the guidelines set forth in the Fair Political Practices Commission Notification Guidelines for Filing Officers Statement of Economic Interests, these guidelines did not prevent the oversight we found during our audit. Thus, Consumer Affairs needs to make improvements to its policies to ensure these oversights do not continue.

Recommendation #17 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: The Commission requires staff and inspectors to complete the event packet checklist for each event.

Update: In addition to requiring an event checklist, the Executive Officer plans to audit ten percent of event packet on a quarterly basis. Please see attachment 7.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission requires staff and inspectors to complete the event packet checklist for each event.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #18 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: The Commission is conducting inspector training every six months or before.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The Commission is conducting training on June 9th, which is covering box office, staff reductions, and anti doping processes

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Although the commission conducted training in June, it needs to set up a training plan to ensure it conducts training every six months.

Recommendation #19 To: Athletic Commission, State

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

6-Month Agency Response

This policy has been created and we track attendnce and training status.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission formalized a process to track inspectors' training status.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #20 To: Athletic Commission, State

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

6-Month Agency Response

CSAC Response: The Commission will continue to do this.

Update: CSAC is continuing to do this including possibly using skype calls for lead inspector trainings on a more regular basis than every 6 months. In addition, the Commission will require athletic inspectors to cover certain training costs as provided in SB309. Please see attachment 4.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission is continuing to evaluate more cost-effective ways of providing training

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #21 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: After an analysis conducted by the Commission, Senate Bill 309 addresses these concerns.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission indicated that it worked with Consumer Affairs and the Legislature to determine a reasonable use of the neurological account. As a result of this work, the Legislature introduced legislation related to the neurological account.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

The commission conducted an analysis and worked with Consumer Affairs and the Legislature to determine a reasonable use of the neurological account

Recommendation #22 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From November 2019

The Commission hopes to have DCA approval of the regulation package that outlines the Neurological Assessment by December 2019 and submit the rulemaking package to the Office of Administrative Law (OAL) sometime in January 2020. This rulemaking will take approximately 12 months to complete once submitted to OAL and we anticipate the proposed language to be effective January 2021.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2018

On 5/16/14, the Athletic Commission (CSAC) approved language to amend section 280 of the CCR "Examination of Boxer Applicants", to establish a neurological assessment fee pursuant to B&P Code (BPC) Section 18711. The Department of Consumer Affairs (DCA) had concerns that the proposal did not completely address the legislative intent of BPC 18711, and recommended CSAC modify the language to include all medical examinations required by athletes for licensure. As a result, CSAC realized that the regulation package would not be completed within the specified timeframe. At a Medical Advisory Committee Meeting held on 11/7/15, Committee members reviewed the proposed language which included DCA's recommendations and made necessary changes.

On 8/12/16, CSAC submitted to OAL, proposed changes to section 280, regarding specific medical examination procedures including an additional Neurological Examination Assessment.

CSAC submitted a complete rulemaking file to DCA for review and approval on 11/16/16. As a result of the recent implementation of the C3 Logix Program and the change in CSAC's appropriation of the Neurological Fund, CSAC staff recommended significant changes to the neurological assessment section 280(h) of the proposed language.

On 3/14/17, CSAC approved withdrawing the proposed regulation file Z-2016-0801-04, "Examination of Boxer Applicants" to allow additional time to prepare and propose a new rulemaking file.

On 8/15/17, CSAC approved proposed changes to section 280 and authorized staff to proceed with the rulemaking process. On 8/29/17, the rulemaking package was submitted to DCA and is currently in the review process by the Department and by the Business, Consumer Services and Housing Agency. We expect to have a regulation package ready to file with OAL by 12/1/18, and project approval and implementation by 12/1/19.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Until the regulation package has been approved, we are assessing this recommendation as partially implemented.

Annual Follow-Up Agency Response From November 2017

On 5/16/14, the Athletic Commission (Commission) approved language to amend section 280 of the CC&R "Examination of Boxer Applicants", to establish a neurological assessment fee pursuant to B&P Code (BPC) Section 18711. The Department of Consumer Affairs (DCA) had concerns that the proposal did not completely address the Legislative intent of BPC 18711, and recommended the Commission modify the language to include all medical examinations required by athletes for licensure. As a result, the Commission realized that the regulation package would not be completed within the specified timeframe. At a Medical Advisory Committee Meeting held on 11/7/15, Committee members reviewed the proposed language which included DCA's recommendations and made necessary changes.

On 8/12/16, the Commission submitted to OAL, proposed changes to section 280, regarding specific medical examination procedures including an additional Neurological Examination Assessment.

The Commission submitted a complete rulemaking file to DCA for review and approval on 11/16/16. As a result of the recent implementation of the C3 Logix Program and the change in the Commission's appropriation of the Neurological Fund, Commission staff recommended significant changes to the neurological assessment section 280(h) of the proposed language.

On 3/14/17, the Commission approved withdrawing the proposed regulation file Z-2016-0801-04, "Examination of Boxer Applicants" to allow additional time to prepare and propose a new rulemaking file. On 8/15/17, the Commission approved proposed changes to section 280 and authorized staff to proceed with the rulemaking process.

On 8/29/17, the rulemaking package was submitted to DCA and is currently in the review process by the Department and by the Business, Consumer Services and Housing Agency. We expect to have a regulation package ready to file with OAL by 12/1/17, and project approval and implementation by 7/1/18.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2016

The Commission has created a regulation that specifies all of the medical requirements for licensing contestants and also sets the assessment for the neurological examination account. The regulation has passed the Commission and is in the regulation process.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2015

The Commission proposed regulation changes that would address this CSA Audit Recommendation on June 27, 2014. The regulatory process has taken longer than anticipated due to several amendments that were required.. The Commission has taken into consideration all comments and suggested amendments from the public and the Department of Consumer Affairs and anticipated that the regulations will be fully implemented by November 1, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2014

The Commission has proposed amendments to it's regulations regarding the neurological assessment. This regulatory proposal addresses this BSA recommendation. The estimated implementation date if approved by the Office of Administrative Law is April 1, 2015.

Please see supporting documentation emailed to Kathleen.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The Commission is still working on this recommendation and the neurological subcommittee is studying the overall costs of the tests needed to perform.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Update: The Commission is still working on this recommendation and the neurological subcommittee is studying the overall costs of the tests needed to perform.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The Commission indicated that it is working with Legislative staff and with consumer affairs to comply with this recommendation.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #23 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: The Commission has issued multiple press releases and we have developed a brochure to provide at weigh ins in addition to the standard enrollment form.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission plans to issue press releases in the forthcoming months and has developed a brochure to provide at weigh ins in addition to the standard enrollment form. The commission also intends to explore other means of locating eligible boxers, funding permitting.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #24 To: Athletic Commission, State

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.

6-Month Agency Response

CSAC Response: The Commission is now tracking addresses in its licensing database. The Commission will be happy to provide this, but the BSA will need to come visit CSAC to get it or I can deliver it, but this has secure information contained in this file and it is a very large file.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission is now tracking addresses in its licensing database.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #25 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From October 2016

The Commission has created a policy and procedure for inclusion in the Administrative Manual for moving money to and from the Pension Investment Account.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

The commission created and provided policies and procedures related to transferring funds on a regular basis from the pension fund's state account into its investment account.

Annual Follow-Up Agency Response From September 2015

The Commission's Executive Officer is working closely with the Department of Consumer Affairs' Budget Office to create a procedure to transfer funds from the pension fund's state account into its investment account.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2014

This recommendation is being performed by not moving more money than is being distributed from the investment account to the SMIF account.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

The commission did not provide amended policies and procedures as we recommended. Furthermore, the commission's policies and procedures need to ensure that commission staff make transfers from the state account to the investment account.

1-Year Agency Response

The Athletic Commission is currently drafting an Initial Statement of Reasons (ISR) for pension regulation changes. Once the regulations are in place, and the ISR finalized, the Athletic Commission will complete policies and procedures for its administration.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Update: We have made more progress toward the development of this policy, but it is still in the creation phase.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The Commission has yet to formalize this process. Further evaluation of distributions is in progress in order to determine a formal policy. The commission expects to have a policy developed by its six month response.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #26 To: Athletic Commission, State

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.

6-Month Agency Response

Update: We are awaiting the Governor's consideration of SB 309. Should the bill, that passed the Senate and the Assembly be signed into law, the Commission will be in full compliance. Please see attachment 4.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Chapter 370, Statutes of 2013, increases the amount that the commission can spend on administration to 2 percent of the corpus of the fund. As a result, the commission will be in compliance with the new law if it ensures that its expenditures remain below the limit.

60-Day Agency Response

The commission has taken steps to comply with this recommendation. First, the commission no longer pays the staff service analyst from the pension account that will result in approximately $30,000 savings. Further, the commission is working with Consumer Affairs and the Legislature to address this provision of state law.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #27 To: Athletic Commission, State

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.

6-Month Agency Response

This has been completed and is fully implemented.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The commission has discontinued paying the pension plan's administrative costs from its athletic commission fund

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #28 To: Athletic Commission, State

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.

Annual Follow-Up Agency Response From October 2018

CSAC has taken significant steps to implement this recommendation. As recommended, all event information, including athlete licensing and box office information, by event type, is tracked in our Master Event Log. CSAC conducted an analysis of expanding the pension plan to cover all athletes and determined that an expansion, as recommended by the BSA, would require adding approximately 450 mixed martial art athletes to the Plan. We know there will be an increase in costs associated with staffing and the two existing contracts (the administrator and the investment company). CSAC does not have the appropriation nor the resources to expand the pension plan to all athletes.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Based on the information supplied by the athletic commission, it did conduct an analysis of its pension plan and reported the results of this analysis to the Legislature.

Annual Follow-Up Agency Response From November 2017

The Commission looks forward to implementing this recommendation and since its last response, has taken significant steps in doing so. As recommended, all event information, including athlete licensing and box office information, by event type, is tracked in our Master Event Log. Additionally, in recent meetings, the Commission has discussed options for expanding pension benefits to cover all athletes. We anticipate having sufficient data to report to the Legislature by the end of this Fiscal Year.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2016

Existing law requires the Commission to establish a pension fund for professional boxers. The pension plan and fund only pertain to professional boxers who engage in boxing contests in the State of California. (Bus. & Prof. Codesection 18881; see also Tit. 4, Cal. Code Regs. section 400-409.) All contributions to finance the pension plan are required to be deposited in the State Treasury and credited to the statutory titled "Boxers' Pension Fund." (Bus. & Prof. Code section 18881.) There is no existing authority governing the pension plan which directs the Commission to determine the feasibility of expanding the pension plan to cover all athletes regulated by the Commission and report the results to the Legislature. Although it may be a laudable goal to determine the feasibility of expanding the pension plan to cover all athletes regulated by the Commission, to do so would require specific statutory authority which presently does not exist.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2015

The Commission plans to implement this recommendation but does not have the expertise to conduct the analysis. The Commission plans to contract to have the analysis completed when funds are available. The current budget will not cover the expenditure; however, the Commission believes that resources will be sufficient to implement this recommendation by October 1, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2014

This analysis has not been conducted. We plan to do it to satisfy the audit and legal requirements, but require additional time.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

The analysis of expanding the pension plan will be completed in the future, but with the limited staff the Commission currently has, we have focused on the other recommendations as this is a long-term analysis.

California State Auditor's Assessment of 1-Year Status: No Action Taken

6-Month Agency Response

The analysis of expanding the pension plan will be completed in the future, but with the limited staff the Commission currently has, we have focused on the other recommendations as this is a long-term analysis.

California State Auditor's Assessment of 6-Month Status: No Action Taken

60-Day Agency Response

The commission indicated that it completed the list of all licensed athletes and box office event type. The commission intends to conduct an analysis of expanding the pension plan when staff resources permit.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #29 To: Athletic Commission, State

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.

1-Year Agency Response

The Commission voted to implement the Communication policy at the June 10 meeting.

The Commission voted to implement the long term financial plan unanimously at the June 10, 2013 meeting.

Tracking systems have been set up to track expenses and revenue. Please see the 90 day response.

The Commission has formalized administrative policies related to revenue collection, processing, and separation of duties. Please see the Commission's administrative manual.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

The commission worked with Consumer Affairs to develop an action plan to address the deficiencies we noted in our report. In addition, the commission has implemented each of the four points that we included as part of this recommendation. Furthermore, the commission's accounting records demonstrate that it has maintained a fund reserve to support at least three months of operating costs. As a result, we consider this recommendation to be fully implemented.

6-Month Agency Response

CSAC Response: The Commission voted to implement the Communication policy at the June 10 meeting. Please see attachments 1, 2, and 8.

CSAC Response: The Commission voted to implement the long term financial plan unanimously at the June 10, 2013 meeting. Please see attachments 2, 4 and 8.

Tracking systems have been set up to track expenses and revenue. Please see the 90 day response or attachment 3.

The Commisison has formalized administrrative policeies related to revenue collection, processing, and sepeartion of duties. Please see the Commission's administrative manual.

California State Auditor's Assessment of 6-Month Status: Pending

The commission worked with Consumer Affairs to develop an action plan to address the deficiencies we noted in the report. In addition, the commission has implemented each of the four points that we included as part of this recommendation. However, because only six months have elapsed since we issued our report, it is not clear whether these steps will resolve the commission's significant deficiencies. As a result, we consider this recommendation to be pending until the commission can demonstrate that the steps it has taken have resolved its deficiencies.

60-Day Agency Response

The commission is drafting a policy related to the roles and responsibilities of the commissioners, the executive officer, and commission staff in the commission's administrative processes. Further, the Commission is working on a long term financial plan along with revenue enhancing strategies that have been incorporated into legislation introduced by the Legislature during the fiscal year 2012-13 session. The commission also stated that it formalized policies related to tracking key information and administrative practices.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation for Legislative Action

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.

Description of Legislative Action

SB 309 (Chapter 370, Statutes of 2013) was signed by the governor on September 26, 2013, and extends the sunset date for the commission to 2016. This statute also addresses other recommendations in the report. Specifically, SB 309:

-Authorizes CSAC to charge a $20 fee to issue federal identification cards and requires the cards to be reissued once every four year.

-Requires CSAC to use no more than 30% of monies from the State Athletic Commission Neurological Examination Account to fund special neurological examinations and limits the administrative costs associated with managing and distributing the account to no more than 20% of the prior year's contributions.

-Raises the minimum fee collected by CSAC for an amateur event or contest from $500 to $1,000 and clarifies that the minimum fee for a professional event is $1,250.

-Raises the maximum broadcasting fee collected by CSAC from $25,000 to $35,000.

-Limits the administrative costs associated with investing, managing and distributing the Boxers' Pension Fund to 2% of the corpus of the Fund.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

All Recommendations in 2012-117

Agency responses received after June 2013 are posted verbatim.