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Legislative audit finds inventory, IT and oversight weaknesses at DABS; department commits to corrections
Summary
A Legislative audit presented Oct. 15 found recurring inventory variances, weaknesses from a 2022 IT rollout, limited follow-through on past findings and inadequate risk tracking at the Department of Alcoholic Beverage Services (DABS). DABS leadership acknowledged the report, outlined recent management changes and described steps to strengthen fi
SALT LAKE CITY — A legislative performance audit released Oct. 15 found systemic control weaknesses at the Department of Alcoholic Beverage Services (DABS), including recurring unexplained inventory variances at retail stores and the warehouse, shortcomings stemming from a 2022 enterprise IT rollout, and inadequate risk-assessment and follow-up processes.
Audit findings and concerns: The audit team told the committee that some stores showed inventory variances month after month without adequate investigation or escalation; auditing and oversight functions had not consistently traced causes or required corrective plans. Auditors said a late internal audit of the new ERP system prioritized contract issues and delayed operational-control testing; this delay reduced the legislature—s and the department—s ability to respond to known risks. The report flagged repeated findings that were not fully addressed over several audit cycles.
Recommendations and department response: The auditors recommended strengthening inventory controls, improving follow-up on recurring findings, enhancing risk assessment and coordinating internal audit to prioritize operational controls. They also advised the legislature to review warehouse expansion funding in light of the new findings and evolving operational needs. DABS Executive Director Erica Evans and Commission Chair Steve Handy accepted the report, described a recent executive turnover and new finance and operations leadership, and outlined an "operations improvement blueprint" aligned with auditing standards (the GAO "Green Book"). The department said it will update strategic planning, improve KPIs and internal audit coordination and present proposed corrective steps to the legislature.
Why it matters: DABS manages substantial sales and state revenues and operates a statewide distribution system. Inventory control and financial integrity affect state assets, revenue remittance and operational capacity, including readiness for major events and ongoing public-safety duties.
Next steps: DABS and the commission committed to provide the committee and appropriations staff updates on corrective action; auditors suggested reviewing warehouse funding decisions with the new information included.
