Audit - City and County of Denver

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are even more important to consider as the City looks forward. Marijuana-relatedbusinesses are not only a new phenomenon; they are here to stay, especially with theadoption of Colorado’s Amendment 64 legalizing the use of recreational marijuana. It istherefore critical that the City develop and implement a robust system for regulatingmarijuana-related businesses.City and County of DenverP a g e 30
RECOMMENDATIONS1. Internal Controls – The Department of Excise and Licenses should develop aframework of internal controls to ensure proper monitoring of processes and controls,which should include:1.1 Developing and implementing medical marijuana policies and procedures todocument processes and controls.1.2 Providing cross training on the medical marijuana licensing process so allLicensing Technicians can process medical marijuana applications.1.3 Establishing a process for following up on outstanding medical marijuanaapplications.1.4 Establishing deadlines for completing the application process, specifically withregard to inspections.1.5 Amending and updating the inspection report template for each specificlicense type.1.6 Ensuring quality control review has defined criteria and is adequatelydocumented with outcomes.2. Segregation of Duties – The Department of Excise and Licenses should establishsegregation of duties in the Medical Marijuana Program to strengthen internalcontrols, specifically in the areas of cash handling and data entry.3. Staffing – The Department of Excise and Licenses should develop a plan to request anincrease in staff support for the Medical Marijuana Program to enhance theefficiency of the process and strengthen internal controls.4. Cost Analysis – The Department of Excise and Licenses should conduct a costanalysis to determine if the medical marijuana license fees are appropriate andadequate, proposing any changes to City Council for consideration.5. Outstanding Applications – The Department of Excise and Licenses should reviewoutstanding medical marijuana applications and follow up with applicants to requestcompletion of outstanding inspections or other steps required for full City licensure.6. Application Data – The Department of Excise and Licenses should review and amend,for accuracy, the electronic medical marijuana license data as recorded in theDepartment’s Production information system so that medical marijuana datatransferred to Accela will be useful.7. Paper Files – The Department of Excise and Licenses should ensure that medicalmarijuana paper files are complete and filed correctly, including date stamping onall applications.8. Data Safeguarding – The Department of Excise and Licenses should ensure that allsensitive medical marijuana information contained in paper and digital files is secureand that controls are in place to monitor the safeguarding of this information.P a g e 31Office of the Auditor
Page 1 and 2: Medical Marijuana LicensingPerforma
Page 3 and 4: City and County of Denver201 West C
Page 5 and 6: City and County of DenverDennis J.
Page 7: TABLE OF CONTENTSEXECUTIVE SUMMARY
Page 10 and 11: Significant Issues Identified with
Page 12 and 13: Although another City department is
Page 14 and 15: Colorado’s Medical Marijuana Regu
Page 16 and 17: their inspection activities electro
Page 18 and 19: Internal Control Framework as a Met
Page 20 and 21: process include applicants submitti
Page 22 and 23: Without clear, consistent, and up-t
Page 24 and 25: econciliation activities but they i
Page 26 and 27: Personnel from the City’s Technol
Page 28 and 29: • We noted that a check in the am
Page 30 and 31: • Excise and Licenses - reviews a
Page 32 and 33: of Local Licensing Authority.” Ho
Page 34 and 35: Audit review of 41 sample files sho
Page 36 and 37: • When street address and busines
Page 40 and 41: 9. PeopleSoft Reconciliation - The
Page 42 and 43: AGENCY RESPONSECity and County of D
Page 44 and 45: City and County of DenverP a g e 36
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Audit - City and County of Denver

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