ALBANY — New York City’s OTB, saddled with a bloated payroll, too many outlets, a huge fleet of cars and several no-bid contracts, “is unlikely to avoid financial insolvency,” a scathing state audit has found.
The still-secret draft document from the office of state Comptroller Tom DiNapoli also concluded that Off-Track Betting’s management team “has not undertaken the kind of comprehensive cost-reduction necessary to address its unsound financial condition.”
The audit, obtained by The Post, sought to assess OTB’s “deteriorating financial condition” in the wake of Gov. Paterson’s decision in June 2008 to have the state operate the money-losing monopoly bookmaker.
The Post disclosed last week that OTB’s senior management was considering an unprecedented filing in federal bankruptcy court.
Despite an annual handle of $1 billion, the audit found, OTB has accumulated $24 million in operating deficits during four years ending in 2008.
Most of OTB’s operating revenues were consumed by the costs of maintaining 68 betting locations, including 57 branch offices, eight restaurants, and three tele-theaters, which were staffed by a combined 1,360 employees.
The audit found that OTB management had not conducted a study of its staffing needs since 1981 — before the initiation of telephone and Internet betting options that account for an increasing percentage of wagering.
It also discovered that OTB maintained a total of 87 vehicles, including several recently purchased high-priced SUVs, 22 of which were routinely used by executives to commute to and from work.
The audit noted there were “no written rules governing the assignment of the vehicles” and “no written explanation for the existing assignments.”
“We question whether all 87 vehicles are needed by the corporation,” the auditors wrote.
The audit also cited three Brooklyn betting parlors in close proximity to one another — at 1367 and 2112 Rockaway Parkway and 111-14 Flatlands Ave. — as evidence that consolidation of locations is needed.