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Audit Dings State Liquor Agency For Poor Financial Reporting

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A new audit found millions of dollars in reporting errors at the Utah Department of Alcoholic Beverage Control. The report sparked another debate over resources and oversight of the DABC.

According to the state audit, the errors came after the DABC switched to a new computer system last summer. In the six months that followed, hundreds of millions of dollars in expenses and revenue went unreported.

No money is actually missing, but State Auditor John Dougall says poor implementation and use of the new accounting system led to DABC errors bleeding into other state reports. 

“That’s where we had serious concerns,” Dougall says, “because it’s giving a false sense of what’s really taking place.”

The audit found inaccurate manager timecard reporting and concluded that the DABC’s finance division lacks knowledge and experience in retail and governmental accounting.

The state auditor’s office conducts an annual review of DABC operations, and DABC commissioners requested auditors look into the department’s financial processes.

DABC leaders agreed with some of the recommendations, but pushed back on other criticisms. Executive Director Sal Petilos says the new accounting system in question required a steep learning curve period, citing a “delay in reporting.”

“We generate a lot of money monthly,” Petilos told reporters. “We weren’t able to report because of system issues, and now that we’ve had the time to look at them, we’re remedying those.”

DABC Commissioner Neal Burube says the department is doing the best it can with its allocated resources. 

“If the state of Utah expects (the DABC) to be run like a business, they should treat it like a business,” Berube says. “There are many constraints that are put on the operations here that wouldn’t be in a normal business situation.”

Dougall agrees that it’s a challenge for government to run a business-like enterprise, but he says ultimately, it’s department management that needs to take responsibility for problems.

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