Audit - City and County of Denver

• We noted that a check in the amount of $750, dated November 2012, was keptin a file attached to an MMC application completed by an applicant. The filecontained no explanation with regard to the reason for keeping this check in thefile.• Only nine of the forty-one files (22 percent) were placed in order inside the filefolders and secured with clamps. The rest of the applications and supportingdocuments reviewed were loosely inserted in their file folders. Thirteen of theapplications and supporting documents (32 percent) were not in any designatedfolders.Issues with the Department’s file management practices was also a finding in the reportof the previous performance audit of the Department, issued in August 2010. TheDepartment should take immediate action to organize all MM-related files and maintainthem in a secure manner.Medical Marijuana Licensing Process• Application ProcessDuring the MM licensing process, the Citytakes a number of measures, which are • Licensing Processintended to ensure that applicants areprepared to operate according to City rules• Renewal Processgoverning MM businesses. These stepsinclude a review of application packets,inspections of the business premises, andcoordination with the state licensing authority before licenses will be delivered to theapplicant. The steps of the licensing process are laid out in greater detail in Appendix A.The Department’s lack of an internal control framework has reduced the effectiveness ofthe established steps integrated into the licensing process. Specifically, the QC processlacks sufficient documentation and oversight. Further, the City’s inspections of MMbusiness premises take an unreasonable amount of time and may contribute to theoperation of unlicensed MM businesses in the City without any action taken by theDepartment. Finally, the tool that is currently being used by the state and the City tocoordinate dual MM licensure is ineffective and may allow some MM businesses tooperate with only a City or state license, but not both.Quality Control Process Lacks Guidelines, Documentation, and Review – The Departmenthas established a QC step in the MM licensing process, performed upon theDepartment’s receipt of the complete application package and payment of associatedfees. The purpose of the QC step is to ensure that each section of the application hasbeen completely filled out and that the required supporting documents are valid andsufficient, such as by verifying that required permits are valid.City and County of DenverP a g e 20