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State audit finds cash theft at Utah Department of Alcoholic Beverage Services; agency says it has implemented recommendations
Summary
An Office of the State Auditor review led to DABS identifying internal cash theft at one store, totaling about $112,000; DABS leaders told the committee they have implemented audit recommendations and strengthened internal controls.
The Utah Department of Alcoholic Beverage Services reported to the House Business and Labor Interim Committee that an internal investigation, reviewed by the Office of the State Auditor, revealed cash theft by a single employee at one DABS retail store. Todd Darrington, DABS director of finance and administration, told the committee the amount stolen was “just a little over a hundred thousand dollars, about a hundred and $12,000.”
Why this matters: DABS is the state's liquor control agency and handles retail sales, taxes and state revenue; losses affect taxpayers and require robust controls. The department told the committee it has implemented audit recommendations, tightened deposit and reconciliation processes, and is seeking restitution through the attorney general’s office.
What the audit covered and DABS response: Tiffany Clayson, executive director of DABS, told the committee she welcomed the audit and said the department “agree[s] with the findings and recommendations, and in fact, we've already implemented all of the recommendations.” Darrington outlined steps taken: updated change-order policies, faster bank reconciliations, deposit procedures meeting statutory time frames, hiring an additional auditor for cycle counts and prompt investigations, and discontinuing clearing accounts to improve traceability. The department also said it is working with the state Division of Finance and an external CPA firm to review corrected processes.
Timeline and investigation: Committee members asked when the theft occurred; Darrington said it occurred from January 2021 through June 2024, during a period when DABS was implementing a new enterprise resource planning (ERP) and accounting interfaces. Darrington said the theft was by a single employee at a single location and that the person “is no longer working at the DABS.” DABS reported the situation to the Office of the State Auditor and partnered with the attorney general’s office, which has an active investigation. Clayson said that, at the time of the audit, the auditor did not find other similar instances.
Package agencies and accounting entries: The audit also identified long-standing reporting practices involving Type 5 manufacturing package agencies. Darrington said DABS adjusted entries and revenue codes and has corrected fiscal-year reporting; the department also reallocated staff responsibilities for monitoring those accounts. The committee discussed the business model for package agencies and possible legislative follow-up to review compensation and contracting for agencies in rural markets.
Next steps and committee action: The committee received the report as informational; no legislative action was taken at this meeting. DABS said it will seek restitution after the AG investigation concludes and will continue to modernize internal controls and automate interfaces to the state accounting system.
Bottom line: DABS acknowledged the findings, reported operational fixes already made, and told legislators it will pursue restitution and further improvements to prevent recurrence.
