Purpose

To determine whether the New York State Liquor Authority (Authority) appropriately approved new and renewed licenses in accordance with the State’s Alcoholic Beverage Control Law (ABC Law) and the related administrative and documentation requirements. The audit also sought to determine if the Authority complied with the administrative protocols related to enforcement actions, including the revocation, cancellation, and suspension of liquor licenses. Our audit focused on compliance with certain provisions of the ABC Law and related rules and regulations at the State level. This audit did not assess compliance with any local laws or policies that could impact licensing in specific communities, including “on premises” establishments in New York City where licensing may require input from local community boards. Matters pertaining to noise complaints related to liquor license holders in New York City were addressed separately, in another State Comptroller’s audit report. This particular audit and report covered the period April 1, 2014 through August 23, 2016.

Background

The Authority was established under New York State Law in 1934 to regulate and control the manufacture and distribution of alcoholic beverages for the purpose of fostering and promoting temperance in their consumption and respect for and obedience to law. The ABC Law gives the Authority the power to issue licenses and permits for the manufacture, wholesale distribution, and retail sale of all alcoholic beverages. A three-member Board of Commissioners oversees the Authority’s operations.

The Authority investigates licensees to ensure they are in compliance with the ABC Law. When a licensee is non-compliant, the Authority can impose a fine on the licensee and/or suspend, cancel, or revoke the license. The Authority has a total of 96 types of licenses and 91 types of permits. Our audit focused on the largest retail license types (On Premises Liquor, Grocery Store Beer, and Liquor Store). Between April 2014 and June 2016, the Authority issued 11,321 new retail licenses and 34,816 renewals of retail licenses in these three categories. During that same time, the Authority: assessed 5,134 fines totaling $20.5 million; made 1,134 bond claims totaling $1 million; and imposed 216 suspensions, 861 cancellations, and 156 revocations on licensees.

Key Findings

On a statewide basis, the Authority generally approved new liquor licenses and license renewals consistent with the ABC Law and the Authority’s prescribed administrative protocols. In particular, the Authority adequately ensured that license applicants and parties seeking renewals complied with the Authority’s prescribed documentation requirements. For the new license applications we selected for review, the Authority had 99 percent of the required documentation on file. For selected license renewals, we determined that all documents were submitted, as required. In addition, the Authority complied with its administrative requirements pertaining to license revocations, cancellations, and suspensions.

Other Related Audit/Report of Interest

State Liquor Authority - Division of Alcoholic Beverage Control: Oversight of Wholesalers’ Compliance With the Alcoholic Beverage Control Law (2005-S-33)