Audit - City and County of Denver

When the Department first began licensing MM businesses; management was closelyinvolved in the application process. These processes were subsequently transitioned tothe staff member currently responsible for handling all MM license applications. To assistwith processing MM license applications, the Department created the QC step andassigned it to a Management Analyst who is alawyer by training and works primarily with theliquor licensing hearings process. Over time,the QC step was delegated to legal fellowsworking for the Department in an interncapacity.There are no developed criteriathat guide the QC process whenreviewing an application anddocumentationOur testing identified several weaknesses inthe QC step. First, the Department has notdeveloped criteria regarding the QC review, such as what renders an applicationincomplete or what supporting documentation is acceptable. QC reviewers complete acopy of the same checklist that Department staff complete when an applicant initiallysubmits their application. As a result, documentation of the QC step is limited. AlthoughQC reviewers check off items on the checklist, they do not document their conclusionsregarding their review, nor do they sign or initial the checklist upon completion of thereview, which would identify the person responsible for the review. If a QC reviewerneeded to ask any clarifying questions of the applicant, resolution of the issue and bywho are not documented. Finally, there is no review of QC reviewers’ work, either by theManagement Analyst or by other staff familiar with MM license requirements.The supporting documents submitted with the MM license application are intended toprovide assurance that the applicant meets the licensing requirements. It is imperativethat Department develop processes to ensure that this is the case and to support itslicensing decisions.Inspection Deadlines Have Not Been Established – Before a new MM business may beginoperating, it must pass a number of City inspections. However, audit work found that theDepartment does not have a deadline for completing the required City inspections. Thispotentially adds length to the time applicants are already waiting for their applicationsto be processed and allows some MM businesses to operate for an extended period oftime without a valid City license, resulting in loss of licensing revenue and increased risksrelated to public health and safety.Both City and state laws and rules grandfathered-in MM businesses that were alreadyoperating by allowing them to continue to operate until their licenses were approved ordenied. Specifically, the laws prohibit operating an MM business without valid state andlocal licenses unless the business has submitted an application for a license.As part of the licensing process, inspections by the following four City agencies arerequired.• Denver Fire – conducts facility safety inspections• Community Planning and Development – reviews time, place, manner, andzoning issues• Environmental Health – performs an environmental reviewP a g e 21Office of the Auditor