I am fairly certain the flag system is not broken. Whoever flags something gets the post to be reviewed by a Moderator for a second review as a double check. Thus, if any user flags something as off-topic, spam, or inappropriate it will be double checked by one of the mods. Unless of course things have changed in the past few weeks.
Having said that, I do not fully understand what you mean when you say the system is broken, can you elaborate?