06/26/2003 11:00PM

Second report blasts NYRA

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NEW YORK - A report drafted last October by the New York State Racing and Wagering Board that was not made public until Friday complained that the New York Racing Association had inadequate controls over its mutuel department and failed to address concerns raised by regulators.

The concerns raised by the board were nearly identical to those outlined in a report two weeks ago by Eliot Spitzer, the New York State Attorney General, which was highly critical of NYRA's mutuel room cash policies. The attorney general's report recommended that NYRA's president, Terry Meyocks, be removed, and that the legislature review whether NYRA was fit to run racing at Aqueduct, Belmont, and Saratoga.

The board's report, which was first made public in an article in Friday's edition of he Albany Times Union, was sent to NYRA in draft form last October and issued in its final form to the racing association on March 6, 2003, after NYRA filed a response.

In the final report, the board said some of the concerns raised in the initial draft "have been addressed and corrected by NYRA" but also criticized NYRA for being "reactionary and incapable or unwilling to make changes unless well-publicized negative events occur."

NYRA's attorney, Denis J. McInerney, said in a statement on Friday that NYRA had "implemented many changes in response to the board's concerns." He said that "NYRA very much looks forward to continuing to work closely with the board to ensure that all appropriate control measures are implemented."

NYRA, a quasi-public organization, is dependent on the legislature for its franchise to run racing.

The board's report listed 16 areas of concern about NYRA, including controls to prohibit betting by mutuel tellers, supervision of mutuel employees, and security procedures in handling cash. The report cited the convictions of 19 mutuel tellers for tax evasion or money laundering.

The report said in part: "It is the opinion of the staff that the failure to adequately safeguard NYRA assets by instituting daily cash counts, lack of supervision of teller shortages, failure to enforce rules against teller and credit betting, as well as the absence of strong checks and balances within the organization created a situation that was ripe for the type of violation" that resulted in the convictions.