Objective

To determine the extent of implementation of the two recommendations included in our initial audit report, Internal Controls Over Selected Financial Operations (Report 2019-S-69).

About the Program

In 1934, the New York State Legislature enacted the Alcoholic Beverage Control Law (Law), creating the State Liquor Authority and the Division of Alcoholic Beverage Control (both commonly and hereafter referred to as SLA). SLA promotes the health, welfare, and safety of the people of the State, and to the extent possible supports economic growth, job development, and the State’s alcoholic beverage production, tourism, and recreation industries.

SLA has locations – or zones – in New York City, Albany, and Buffalo and is governed by a chairperson and two commissioners. SLA issues both on- and off-premises licenses (e.g., for bars and grocery stores, respectively) as well as manufacturing and wholesale licenses, special event and brand label permits, and miscellaneous permits such as those for brewery tastings. The application and fee requirements depend on the type of license or fee and the location. For the calendar year ended December 31, 2020, SLA generated almost $49 million in revenue from licenses and fees.

Travel expense reports provide accountability for employees’ use of travel cards and support for reimbursement of out-of-pocket costs. They also provide information necessary to reconcile the travel card bill and identify and challenge incorrect and potentially fraudulent charges. Per the OSC Travel Manual, which SLA uses for its travel procedures, employees should submit travel expense reports within 30 days of the end of the travel event, detailing all expenses including both travel card and out-of-pocket expenses.

The objective of our initial audit, which was issued September 2020 and covered the period April 2016 to June 2020, was to determine whether SLA had adequate controls over selected financial operations to provide reasonable assurance that State assets and information were appropriately managed and safeguarded. We found that the controls were generally adequate to provide this assurance. We also identified six travel card charges for one current and one former employee for which SLA lacked employee travel vouchers (SLA now refers to these as expense reports), and we made two related recommendations.

Key Finding

SLA has made progress addressing the problems we identified in the initial audit report and has implemented the two recommendations from that report.