Archive for Thursday, March 5, 1998

ALCOHOL AGENCY NEEDS OVERHAUL, AUDIT FINDS

March 5, 1998

Advertisement

— An audit recommended that ABC improve liquor licensees' compliance with state law, beef up systems for identifying and penalizing violators and better assess its own effectiveness.

A cramped fifth-floor room in the Capitol was an inauspicious spot to present an audit Wednesday offering new evidence a state agency sacrificed liquor enforcement to concentrate on unrelated tax-fraud investigations.

The 48-page report confirmed key points of Journal-World stories published Feb. 1 chronicling the status of liquor enforcement in Alcoholic Beverage Control.

ABC, with 40 employees and a $2 million budget, is responsible for investigating people and organizations involved in selling alcoholic beverages in Kansas.

The Legislative Division of Post Audit recommended that ABC, part of the Kansas Department of Revenue, improve liquor licensees' compliance with state law, beef up systems for identifying and penalizing violators and better assess its own effectiveness.

Auditors also found the revenue department's oversight of 500 bingo licensees was in need of overhaul.

``No one can tell if Kansas is getting all the bingo tax it should,'' state auditor Allan Foster said in a presentation to legislators. ``It's a cash business. Skimming is relatively easy.''

The state currently receives $1 million annually in bingo tax revenue.

Auditor Sharon Patnode said ABC's system for dealing with bars and liquor stores that violate state laws was in disarray. Fines are inconsistent and don't necessarily escalate in response to repeated or more serious violations, she said.

The completeness and accuracy of ABC records was questioned by auditors. ABC's legal staff initially couldn't find 35 of 129 case files requested by auditors. Ultimately, 19 case files remained lost.

``There was a sense of chaos in this area,'' Patnode said.

Pressed on this point, Revenue Secretary John LaFaver said he was surprised auditors thought the agency's handling of offenders was substandard.

``That is certainly the point in this report that concerns me the most,'' he said.

This audit and J-W stories detailed how ABC liquor enforcement has been transformed in the 1990s as agents' caseloads expanded to include enforcement of laws on illegal drugs, bingo and cigarettes as well as motor fuel, sales, personal and corporate tax fraud.

Agents assigned to ABC spent 92 percent of their time on liquor in 1992, compared to 41 percent in 1997. When these percentages are taken into account, full-time staff at ABC devoted exclusively to liquor decreased from 23 in 1992 to nine in 1997.

Overall, liquor and bingo infractions fell from 3,256 to 2,271 during the five-year period studied.

However, LaFaver said the audit supported his contention ABC was doing a better job with serious liquor offenses, including the ban on alcohol sales to minors.

``The fact is that Kansas is on the cutting edge of underage liquor enforcement,'' he said.

In an interview, a current ABC agent said Wednesday night that statistics were manipulated to obscure the agency's less vigorous approach to liquor statutes.

``How could we be doing a better job when we're only spending 41 percent of our time on it?'' the agent said.

Auditors did recommend ABC increase attacks on underage drinking by conducting more bar checks and controlled buys, in which undercover teen-agers attempt to purchase alcohol at liquor stores that are under surveillance.

Sen. Lana Oleen, a Manhattan Republican and co-chair of the committee receiving the audit, said she was distressed the report found minimum job qualifications for ABC staff performing liquor control. They were in the bottom half of seven states surveyed.

Requirements for ABC agents conducting tax fraud investigations are lower than any of the other states, the audit said. A college degree is required in Colorado, Missouri, Arkansas and Virginia, while Kansas requires just one year experience in the criminal justice field.

``Let's raise standards,'' Oleen said.

Patnode said interviews with ABC agents indicated some were confused about the state's investigative priorities.

``Is tax our focus? Liquor our focus? What should I be doing?'' she quoted them saying.

An ABC agent, who agreed to speak if not identified in print, said colleagues in the agency would be disappointed by results of the audit.

``They didn't do anything with the terrible morale problem that we have,'' the agent said. ``There won't be any changes.''

-- Tim Carpenter's phone message number is 832-7155. His e-mail address is tim@ljworld.com.

Commenting has been disabled for this item.