SALT LAKE CITY (ABC 4 News) - The results of an audit on Utah's Department of Alcoholic Beverage Control found that the agency had several deficiencies related to inventory, accounting, security, ethics and funding.
And it also recommended that possible criminal charges should be pursued against a former licensing and compliance director.
Earl Dorius resigned in March after reports he got free gifts from a restaurant owner who had 8-different liquor licenses.
"We did forward this information onto the Attorney General's office because the law was violated there and they have to make the determination of whether or not to investigate this," says Legislative Auditor Brian Dean.
Last year Dennis Kellen got the same treatment from a legislative audit.
Kellen was accused of steering thousands of dollars worth of state contracts to his son's business. He's now under investigation.
In response, a spokesman for the Attorney General says "the investigation is ongoing."
Legislative auditors found numerous problems with DABC.
The audit shows:
-Dorius, as former licensing and compliance director illegally accepting gifts.
-DABC needs to improve accounting of inventory ... to ensure accuracy.
-Inadequate oversight of contracts resulting in overcharges.
-Tighter controls (are needed) at warehouse to guard inventory.
"Which could make it easier for non-DABC employees to steal state owned product," Dean told a legislative committee.
Lawmakers jumped on the interim director to get that problem fixed right away.
"The report points out that you have a problem there through your backdoor, you need to control that backdoor," Senate President Michael Waddoups says.
Part of the audit cited a lack of controls to ensure accurate inventory at warehouses, along with similar problems at stores.
The audit also cited security risks related to loss of inventory due to overcharging for parts, labor and vendor services since 2003. The audit also reported that the DABC may have violated purchasing laws.
The audit, performed by the Office of Utah Legislative Auditor General also mentioned the need for employee ethics training, while singling out a former licensing and compliance director who accepted illegal gifts.
The report also noted that the DABC has been "self-appropriating" for years, by allocating operating expenditures from the Liquor Control Fund, instead of going through budget appropriation via legislative oversight. The audit claims the DABC improperly allocated $6.6 million in 2011.