Tennessee Alcoholic Beverage Commission receives criticism from Comptroller’s office

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NASHVILLE, Tenn. (WJHL)- Tuesday, the Tennessee Comptroller of the Treasury released it’s audit on the state’s Alcoholic Beverage Commission.

The state comptroller said the agency didn’t have sufficient written policies and didn’t comply with all the rules.

“Management has not developed written policies and procedures governing the program, the program’s processes or implemented necessary controls to ensure compliance with statutes and rules,” said Auditor Robert Harness. “Management did not have a process to maintain documentation to show they complied with TCA 57-3803 which requires that establishments be located within a county or municipality that have full-time police or sheriff’s department and have passed a referendum authorizing the sale of wine at retail stores.”

The executive director for the ABC, Russell Thomas said each location in the state meets that requirement.

“We’ll be adding a specific question to each application process to document that finding in every application going forward,” Thomas said.

The hearing brought to light issues with documentation and noncompliance with rules mainly over paperwork and information on chains opening new locations.

“The rules require applicants to submit a corporate charter or articles of the organization but management no longer obtains this documentation,” said Thomas. “There’s certain ownership information related to those businesses and in recent years, the agency has not required those companies that add locations to resubmit the same information again”

That process is a tedious one according to the president of the Tennessee Grocers and Convenience Store Association.

“While they are operating in multiple locations in multiple jurisdictions, they end up having to provide duplicates of the same information they provide over and over, basic company information,” said president Rob Ikard. “Grocery stores are inspected regularly for compliance. They have to renew their licenses every two years and they have to provide a lot of information. There are undercover stings and numerous ways a grocery store could lose its wine and retail food store license.”

Those stores are already governed by strict rules according to Ikard.

“They took issue with some very arcane, detailed provisions of the statute that weren’t necessarily covered in the most thorough way,” Ikard said. “Grocery stores are very highly regulated by the TABC to the same level that liquor stores are. That was actually one of the goals of the legislation when it passed in 2014.”.

Many of the findings were due to streamlining of technology and the need for a reliable system.

The TABC has drafted new language for its rules and has filed a notice of rulemaking hearing. That’s expected to happen in November.

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