The third-party audit into a state-managed fund that supports horse breeding has been completed, but industry stakeholders left Thursday’s meeting of the Oklahoma Horse Racing Commission frustrated by a lingering lack of answers about a multi-million-dollar question.
“They would raise about $8 million to $10 million every year off gambling, breakage, registration fees. It’s a lot of money,” former OHRC director John Chancey said of the Oklahoma Breeding and Development Fund on Thursday. “It’s supposed to go back to the horsemen and support the breeding industry.”
In 2025, Chancey met with Oklahoma State Bureau of Investigation agents to report concerns about the so-called “Oklahoma-Bred Fund.” The year before, he had told the State Auditor & Inspector’s Office and the Legislative Office of Fiscal Transparency that significant “discrepancies” existed between how payments to horse breeders were made and documented. At Chancey’s request, the Horse Racing Commission hired a certified public accountant, Shanna Dutton, to review the Oklahoma-Bred Fund’s finances, which Chancey said were managed through an antiquated state computer program called Binkley.
“We had a meeting last summer, and in that meeting she presented to me that she was looking for one month — I don’t remember what month that was, it was in ’22 or ’23, possibly — where there were discrepancies between the checks that were written and the checks that were cashed,” Chancey said Thursday. “Tens of thousands of dollars for one month that was — I won’t say unaccounted for — but there were too many discrepancies.”
On Thursday, Horse Racing Commission members entered executive session to review Dutton’s findings for about 30 minutes.
“I make a motion that we refer this matter to the OSBI and the State Auditor and Inspector’s Office and instruct staff to cooperate with those agencies in any way they can,” commissioner Kathleen McNally said during the meeting.
Commissioners approved McNally’s motion unanimously, and after the meeting some discussed Dutton’s report.
“It was somewhat inconclusive,” Chairman Brian Burget said. “The balances are consistent, but there are some discrepancies associated with how those balances were configured.”
Like Chancey and others, Burget said state statute requires the Oklahoma-Bred Fund to be reviewed annually by the State Auditor and Inspector’s Office — something that did not happen for a period of years.
Commissioner James Fuser said commissioners recognize that people want to know what has occurred with the Oklahoma-Bred Fund.
“We’re trying to get a little bit more into the investigation. I don’t know if we can really do anything, to be quite honest with you,” Fuser said. “This is something that’s been going on for decades.”
Fuser said it is not entirely clear whether anyone had been “misappropriating” monies or whether fund payments were just “mishandled.”
“We do know there’s some stuff in there that just doesn’t look right. That’s what they’ve discovered,” Fuser said. “We’re not trying to accuse anybody whatsoever. We see some things that are wrong — some things that shouldn’t have been done — and we are trying to correct that, and we have.”
Chancey said his early review of the Binkley software two years ago indicated that it was vulnerable to unauthorized access. Burget, Fuser and others said the antiquated software system has been secured since and that current payouts from the Oklahoma-Bred Fund are being accounted for properly.
“We look forward to growth and modernization and [this] different commission,” OHRC director Amanda English said after the meeting. “We’re excited about the direction we’re headed. Nowhere to go but up, and we’re excited to get there. We’ve got a great group of commissioners working with us for the best of the agency.”
English said OHRC staff had been cooperating with OSBI investigators well prior to Thursday’s motion.
“We have met with them several times,” English said of OSBI.
But the extent and status of criminal inquiries into the Oklahoma-Bred Fund remains unclear.
Initially on Thursday, OSBI spokesman Hunter McKee told NonDoc the agency had been “requested to investigate alleged protocols.”
“It’s still an ongoing investigation at this time,” McKee said. “I can’t identify specific information we’re investigating at this time, but I’ll let you know as soon as the case is closed.”
About an hour later, however, McKee provided a different statement:
“I was notified that the OSBI actually does not have an open investigation at this time regarding Oklahoma Bred Funding. Apologies for the confusion,” he said. “We weren’t requested for a full investigation.”
Commissioner: ‘It needs to be investigated’
Amid confusion over what has been investigated by whom, whether the completed third-party audit will be released publicly also remains unclear.
English said OHRC’s general counsel, Michael Copeland, would determine whether to release the document under the Open Records Act. But Copeland said the Attorney General’s Office would actually make that decision, and he looped an assistant attorney general onto NonDoc’s email requesting records. A spokeswoman for the AG’s office was inquiring about the request prior to the publication of this story.
Weeks earlier, the Thoroughbred Racing Association of Oklahoma had also requested the audit report to no avail.
“I think us as industry stakeholders, we just kind of want to know where they’re at,” TRAO director Danielle Barber said.
Rep. Erik Harris (R-Edmond) also attended Thursday’s meeting and said he believes the audit should be released. Harris exercised lawmakers’ statutory authority to attend the meeting’s executive session.
“According to the agenda, there has been an audit that has taken place already. I believe that is an open record, and I think it is public,” Harris said. “I don’t think it is confidential whatsoever, so I believe that that record should be released to the public, and I intend on calling them to do so.”
After the executive session, Harris briefly spoke with Barber and TRAO representatives, including Jennifer Monies, the senior advisor to House Speaker Kyle Hilbert (R-Bristow). Monies listed TRAO as the party she represented on the meeting’s sign-in sheet and said she was there only in her capacity as a contracted communications professional.
Harris said he is “absolutely” concerned about the situation and that the Legislature has an obligation to ensure oversight of state agencies.
“Today’s action by the commission after executive session certainly raises some eyebrows,” Harris said. “Hopefully the state auditor and inspector and OSBI can get to the bottom of what may be going on.”
Chancey — who resigned as OHRC director in August after reaching out to state and federal law enforcement about industry issues — expressed dismay about the confusing state of investigations.
“There’s a lot of unanswered questions is all I know, but it doesn’t sound like anything is going to come of it,” Chancey said. “Did we see anything today? It’s up to the OSBI. Are they going to do anything with it? I don’t know. I’m disappointed.”
Commissioner G.R. Carter agreed that the audit’s findings are concerning.
“Without a doubt. It needs to be investigated, I’ll just say that,” Carter said
Carter said it would be “speculation” to say whether he thought anyone had acted inappropriately.
“It’s going back at least 10 years,” Carter said. “By statute, they’re supposed to do an audit every year, and they haven’t done it in 10 years.”
State Auditor and Inspector Cindy Byrd’s office did release an audit of the Oklahoma-Bred Fund in October 2023, which reviewed a period from 2015 to 2022. The 14-page document outlined reconciliation concerns that constituted repeat findings within OHRC.
Acknowledging industry tensions between quarter horse and thoroughbred interests, Carter said concern about the Oklahoma-Bred Fund is one issue where the Quarter Horse Association of Oklahoma and TRAO generally agree.
“I think they’re on the same page on this one. It’s everybody’s money,” Carter said. “I’m pretty sure that both groups support transparency and correct business practices.”
(Update: This article was updated at 8:35 p.m. Thursday, Jan. 15, to clarify that an audit was produced in 2023 by the State Auditor and Inspector’s Office.)
