Unreconciled discrepancies in Oklahoma’s OKBred Fund prompt OSBI probe and renewed scrutiny of controls

State horse-breeding incentive account faces unresolved questions after reconciliation report

An independent reconciliation of Oklahoma’s Oklahoma Breeding and Development Fund Special Account, commonly called the OKBred Fund, has intensified scrutiny of how the state-managed account is tracked and controlled. The Oklahoma Horse Racing Commission voted on Jan. 15, 2026, to refer the reconciliation materials to the Oklahoma State Bureau of Investigation and to the Oklahoma State Auditor and Inspector’s Office, and the OSBI has confirmed an open investigation.

The fund is a state treasury special account created in law to support Oklahoma’s horse-breeding and racing industry through purse supplements and awards, along with related program administration. The account’s revenues include breakage and unclaimed pari-mutuel tickets and is intended to be spent only for specified program purposes.

Key findings: payee mismatches, unreconciled dollar variances, and voided checks that still cleared

The reconciliation report, finalized Dec. 17, 2025, reviewed the period from Jan. 1, 2022, through June 30, 2025, with the goal of determining the fund’s balance as of June 30, 2025, and evaluating internal controls and processes. The review pulled records from multiple state entities involved in processing or recording fund activity, including the Horse Racing Commission, State Treasurer, state auditor’s office, and the Office of Management and Enterprise Services.

Among the most consequential findings were (1) examples of cleared checks where the payee information was missing from agency reports or did not match the recipient shown on check images, (2) a cumulative variance in which the aggregate amount of checks clearing the bank exceeded amounts recorded in the commission’s Binkley accounting system by $893,112 for the period reviewed, and (3) 65 checks totaling $118,532 that were marked as cancelled in the Binkley system and recorded as $0 disbursements despite having cleared the bank.

The report also flagged out-of-sequence and missing checks, describing those gaps as a fundamental vulnerability that can impair completeness of disbursement tracking and weaken the audit trail.

Control structure raised concerns across agencies

The reconciliation described a process in which commission staff issued checks and prepared deposits but did not receive bank statements. Bank statements were received by the State Treasurer’s Office, which matched cleared checks to a list of check numbers provided by the commission. The report noted that this matching did not include verification of payee names, and that the underlying spreadsheet provided to the Treasurer’s Office was editable, creating a control vulnerability.

Balances required assumptions; horsemen groups dispute figures

Because of inconsistencies in underlying data, the reconciliation stated that assumptions were required to estimate the account balance as of June 30, 2025. Using cleared-check amounts and other available records, it estimated an adjusted balance of $9,598,981 (including outstanding checks) and an actual balance of $9,790,348 (excluding outstanding checks). It also reported that $118,532 could not be allocated to a breed because supporting information was no longer available after checks were voided in the accounting system.

In public statements following release of the report materials, leaders connected to both the Thoroughbred Racing Association of Oklahoma and the Oklahoma Quarter Horse Association said they remain concerned about unaccounted-for money and disputed the accuracy of reported breed balances, while calling for additional records and clearer accounting.

Next steps: investigation and system replacement efforts

During a February 2026 commission meeting, the agency’s attorney stated that an OSBI case had been opened and a case file assigned, and commissioners approved continued efforts to pursue a new software system for OKBred Fund management. The reconciliation recommended phasing out cash receipts and implementing a modern system with audit trails, dual approvals for check issuance, and integrated bank reconciliation.

• Review period examined: Jan. 1, 2022 to June 30, 2025
• Reported variance: $893,112 more in cleared checks than recorded in the legacy system
• Voided-but-cleared checks: 65 checks totaling $118,532

The reconciliation framed its work as a reconstruction based on available evidence rather than a final determination of cause or responsibility.