California's state athletic commission is struggling to regain its footing after teetering on the brink of insolvency -- a fact that led to legislative approval Wednesday of a formal state audit.
The decision to call in state auditors came on the same day the commission, meeting in Sacramento, appointed an interim replacement to the former executive officer who resigned last week. That ex-staffer was censured by commissioners after revelations that the state board was on a path towards being some $700,000 in the red by next summer.
"We were able to remain solvent, but it was a very difficult task for us over the last three months," interim executive officer Kathi Burns told the commission Wednesday morning.
The commission, which oversees boxing and mixed martial arts events in California, looks to have spent some $444,000 more than it took in this year. But a cash reserve from the previous fiscal year will serve as a lifeline, leaving about $23,000 in cash once the books are closed out from the end of June.
The impending state audit will not be the only formal review of the commission's finances; the state Department of Consumer Affairs is doing its own investigation. Over the last two months, the department has pushed the commission to make quick changes to its spending habits.
"The (Athletic) Commission is a special fund operation," states a June 26 memo to Department of Consumer Affairs director Denise Brown. "It is supposed to be financially self-supporting."
For the last three weeks, News10 has been requesting spending records for the commission under the California Public Records Act. The documents provided to date show a sizable amount of spending -- more than $580,000 -- on the salaries of athletic inspectors and for travel of inspectors, commissioners, and staff.
The wages of the athletic inspectors, many of whom work part-time on overseeing fight events, are drawing much of the attention. While states like Nevada pay athletic inspectors a flat rate for their work, California pays inspectors that have day jobs in state government at their overtime rate -- time-and-a-half pay for both their drive time to athletic events and their time in service.
The legislator who asked for the formal audit also questions why some events draw so many paid inspectors. "At some of these fights," said Assemblyman Luis Alejo, D-Salinas, "there's numerous -- maybe too many -- inspectors, which is driving up the costs."
Commission staff are now downsizing how many inspectors attend events, and in some cases enlisting volunteer inspectors. They told the commission Wednesday they are also cutting back on travel wherever possible. And they admit that the immediate future could be tight, with fewer combat sports events scheduled in California... and thus, less money coming in to the commission.
"It's very important that we get some money in the bank so we can get through the lean months," interim executive officer Kathi Burns told commissioners.