Liquor Board audit identifies deficiencies

Written by on April 10, 2013 in Featured, Neighborhood News - No comments

A performance audit of the Board of Liquor License Commissioners for Baltimore City has concluded that the agency has multiple problems, including a lack of written policies and procedures, little formal guidance for inspections staff, and insufficient means for management to evaluate performance of day-to-day operations from within.

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The audit also found that establishments were inspected inconsistently.

“For example, 96 licensees were inspected eight or more times whereas 202 licenses received no inspections during this year [Sept. 1, 2010, to Aug. 31, 2011],” read the audit, which is available online at www.ola.state.md.us.

The audit was conducted by the Maryland Office of Legislative Audits; the final version was released at the end of last month.

The audit states that the board’s 2012 revenue was approximately $2.2 million, with most of that coming from license fees; the board issued 1,360 alcoholic beverage and adult entertainment licenses, according to the audit. Correspondingly, the board’s 2012 expenditures were approximately $2 million.

Auditors also commented on the number of inspectors—14 full-time and 5 part-time—versus the number of routine inspections.

“We estimate that the BLLC could meet its budgeted goal of completing 4,900 routine inspections for fiscal year 2011 using as few as six full-time inspectors,” read the audit.

(Stephan Fogleman, chair of the three-member Board of Liquor License Commissioners, said that the agency now has 10 full-time inspectors due to layoffs.)

Furthermore, the document commented on the agency’s responsiveness to public complaints:

“Finally, we found that BLLC routinely either did not follow up timely on public complaints, as reported through Baltimore City’s 311 complaint system, or failed to document the resulting investigations and resolutions.”

The audit was performed in compliance with a state law, effective 2011, that requires the state to conduct a performance audit of the Baltimore City Liquor Board at least once every three years. The requirement was proposed following a push from city community groups and the Community Law Center.

Samuel Daniels Jr., executive secretary of the Liquor Board, said that any comment he has would echo the Board of Liquor License Commissioners’ official response to the audit, though he did say that he wanted to comment on “the anti-Liquor Board sentiment.”

“They’re drawing their inferences from the audit without even looking at our responses,” Daniels said. “Do we have room for improvement? Vastly, yes. Is politics in the way? Absolutely.”

“I’m very tired of any suspicion that I’m responsible for things that I have tried to prevent,” he added, noting that as Executive Secretary, he has no power to “set policy.”

“Policy is generally handled by the commissioners,” he said.

Stephan Fogleman, chair of the three Liquor Commissioners that make official decisions on licensing, said that he was not responsible for the “day-to-day operations of the agency.”

Fogleman said that while “we generally agreed with many of the items” in the audit, there were others he didn’t agree with.

Regarding the audit’s finding that the agency could get by with six full-time inspectors, Fogleman said that the assertion was based on routine inspections rather than following up on complaints.

“Probably 30 years ago, routine inspections were the bulk of our work,” he said. “Today, we’re more plugged in to the community.”

Fogleman also mentioned compliance conferences, in which inspectors sit down with bar owners. The audit said that the practice may not be allowed under state law.

“Basically, when a bar gets three or more 311 complaints, the licensee is told about it and asked what they can do to rectify the situation,” Fogleman explained. “It’s a well meaning idea; unfortunately the Board doesn’t know enough about it because it hasn’t been written down.”

He added that the conferences don’t affect the Commissioners’ decisions on penalties for documented infractions.

The audit, which was released to the public last week, includes recommendations from the auditors and responses authorized by Daniels, who said that he was happy to agree with the audit when it was correct.

“The only in-depth clarifications—or attempted corrections—occurred when they got it wrong,” he said.

The audit, for example, recommends that the Liquor Board obtain a formal opinion from the State Attorney General on the legality of using alternatives to the official hearing process to address violations. These alternatives include compliance conferences and payments of fines in lieu of the hearing process for certain violations.

The agency expressed agreement with the audit’s recommendation to obtain and act upon an official opinion from the Attorney General on these practices.

To the audit’s recommendation that the agency must document and implement procedures for responding to complaints, and that it must not close 311 complaints until those complaints are investigated and resolved. Daniels agreed.

Fogleman said that many of the problems in the audit can be attributed to the Liquor Board being an “old-fashioned agency that doesn’t have a paper trail of guidance for inspectors” and instead relies on “oral history.”

“We do need to move forward into the 21st Century,” he said.

Fogleman also said that the Liquor Board has funding issues and may see more layoffs.

“This agency will have to be leaner and more efficient,” he said.

Fogleman and the other two Liquor Commissioners, Harvey Jones and Elizabeth Smith, are appointed by the governor on the advice of state senators every two years.

“You will see this [audit] being used by the mayor’s office to take over the Baltimore City Liquor Board,” said Daniels.

by Erik Zygmont
editor@baltimoreguide.com

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