Audit - City and County of Denver

esults consistently. 28 For example, “valid zoning permit,” “valid alarm system permit,” andlicensee in possession/control of (MM) premise” are listed as inspection items, but proofof these items is among the required documents to be submitted with the application.Therefore, inspecting for these items is duplicative of a previous Department activity.Further, we noted that some inspectors marked these items as not applicable or “N/A,”whereas others marked them “yes” or “no.”Additionally, the Inspection Report template was designed for medical marijuanadispensaries, which are now obsolete. Since the three new license types have slightlydifferent requirements, the current template contains items that are no longer required.To ensure that City inspectors are consistently inspecting to current rules, we recommendthat the Department update the Inspection Report template and establish guidelines forcompleting it. A different Inspection Report can be developed for each MM licensetype, or one form that distinguishes between the requirements and includes the licensetype can be used.This is related to an issue we noted in our 2010 audit of the Department of Excise andLicenses for other types of licenses. Specifically, this audit recommended recording andtracking inspection information. For the current audit, we recommend that theDepartment update the Inspection Report to ensure that reviews are consistent betweeninspectors and that inspection results are recorded in a consistent manner. This improvedmethod of tracking will provide the Department with more useful information to supportlicensing decisions.Even if the Inspection Report template is updated and used consistently betweeninspectors, it will not address the absence of Department follow-up on in-processapplications or the lack of licensing deadlines. Both of these issues contribute to lengthycycle times. For example, audit review of 41 sample files determined that for sixapplications (15 percent), the inspection cards issued to the applicants between August2012 and December, 2012, have not yet been returned to the Department. Since theDepartment does not follow up on these applications, it is possible that these businesseshave been operating uninspected and unlicensed for six months.The Purpose of the Local Verification Form is Unclear and May Confuse LicensingDecisions – State Rules require local approval of an MM license application or a locallicense as a condition of granting the state license. 29 However, the form that wasdeveloped to ensure this requirement is met is not used for this purpose.To address the requirement of local license approval prior to issuing a state license, inmid-2012, the state developed a form called a local verification form (LVF). The state’sMedical Marijuana Enforcement Division (MMED) populates an LVF with informationabout the MM business applying for a state license and sends it to the appropriate locallicensing authority. The local licensing authority is to complete the form regardingapproval of the local license application and return it to MMED. Specifically, the sectionof the LVF to be completed by the local licensing authority is titled “Report and Approval28 The Department inspectors complete a one page document called an “Inspection Report” to document their inspection.29 C.R.S. § 12-43.3-305 (2).P a g e 23Office of the Auditor