I played Balboa 18 today, and one player hit a putt too firmly, and it hit the flagstick laying on the ground. I was pretty sure that was a penalty, but I wasn't sure of the details.
Rule 17 is all about the flagstick. There are only 34 rules of golf, and the flagstick is one of them. For today, 17-3a was the relevant rule, specifically the underlined portion - "The player's ball must not strike the flagstick when it is attended, removed, or held up." That's a two-stroke penalty, and the ball must be played as it lies.
Of great interest in Rule 17 is 17-4 - Ball resting against flagstick.
"When a player's ball rests against the flagstick in the hole and the ball is not holed, the player, or another person authorized by him may move or remove the flagstick, and if the ball falls into the hole, the player is deemed to have holed out with his last stroke; otherwise, the ball, if moved, must be placed on the lip of the hole without penalty."
Just a refresher here, a ball is holed when it comes to rest at the bottom of the cup. So be careful on your hole-in-one.
Interestingly, I was close enough to the flagstick that I had a thought on attempting to quickly move it. I could not find anything in Decisions on the Rules of Golf regarding whether or not this would be legal. I imagine so.