Review of alcohol licensing finds paperwork problems

An audit of Columbia County's alcohol licensing records shows what officials are calling numerous examples of "sloppy paperwork."

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Conducted earlier this year by the Serotta, Maddocks and Evans public accounting firm, the internal audit randomly examined 10 requests for new alcohol licenses and 10 requests for renewed licenses issued by the county's Code Enforcement division from July 1, 2008, to Nov. 30, 2009.

The accountants noted several examples of licenses issued though applications that were incomplete, unsigned or not notarized, had not been paid for using recognized payment methods, did not include required certificates of incorporation or did not include certifications from the Health Department.

In some instances, there was no evidence that authorities had conducted the required background checks of the owners of businesses requesting alcohol licenses.

A cursory investigation of one applicant showed an arrest on that person's record, but no documentation was available to auditors to indicate that the arrest had been researched further, as required by county ordinances.

Auditors also found that no documentation existed showing that alcohol license applicants were verified to have been legal U.S. residents, as required by state law.

Two applicants, auditors noted, were not born in the U.S., but their files contained no copies of their resident alien card or naturalization papers.

Officials are saying the report, which was presented to county commissioners last week, seems worse than it is.

"While they found significant problems, they only sampled a small cross-section," said county Deputy Administrator Scott Johnson, who now oversees Code Enforcement but didn't during the time frame auditors examined.

"The cross section they sampled, in this particular case, just happened to be bad."

During the time period sampled by auditors, the county received a total of 135 alcohol license applications, said county Development Services Director Richard Harmon. Of those applications, 111 were renewals, 23 were issued new licenses and one application was rejected.

Johnson admitted he was taken aback when first presented with the audit.

"When I saw it, I thought, 'This is bad, folks. What's the problem here?' "

The problem, Johnson and Harmon both said, was "sloppy paperwork."

"This was an absolute embarrassment to me," said Harmon, who called for the audit after his department was restructured in January and the Code Enforcement division was turned over to Johnson.

Now, Harmon's office issues alcohol licenses.

Though Harmon had overseen Code Enforcement, the director of that division is Linda Glasscock, who said that she, too, was "dumbfounded" by the audit's results.

Glasscock also is questioning its accuracy.

"They (examined) the business licenses and alcohol (licensing procedures) at the same time, and there may have been some confusion with what were business and alcohol license requirements," she said.

Glasscock said that in some cases background checks were performed late in the year and no need existed to perform them again in January, when renewals were required.

"That's where some of the discrepancies were, with applications done like that," she said.

During the weekend, Glasscock had said she intended to read the audit and give an oral report to Johnson on Tuesday.

"All of them are commonsense answers," she said.

Now that the responsibility for issuing alcohol licenses has shifted, Harmon said the affected application files have been completed, fees paid, and everything set right.

"It's bad on paper, but the money is there and I feel confident that everyone who has a license is legal," he said.

Since the audit, Harmon said, his department has implemented procedures recommended by auditors to safeguard the integrity of the application process.

Those recommendations included creating a checklist to make sure all applications and required investigations are completed, instituting a policy that no application files leave the Development Services office, and requiring that licenses are issued only after payment is rendered via money orders or certified checks.

Although no employees with Code Enforcement or Division Services were disciplined over the audit results, Johnson hasn't ruled out punishment for some.

"I think some employees were responsible for that, but the county bears some responsibility as well," he said. "There were procedures in place that weren't working."

Commissioners ordered a follow-up audit in six months to make sure the new procedures prove effective.