An Audit Report on the Alcoholic Beverage Commission's Excise Tax Collection Process
October 2009
Report Number 10-010
Overall Conclusion
The Alcoholic Beverage Commission (Commission) collected, accurately processed, and deposited excise taxes into the State Treasury. The Commission reported it collected $188 million and $194 million in excise taxes in fiscal years 2008 and 2009, respectively.
Auditors reviewed 20 of 550 monthly excise tax reports (4 percent of April 2009 reports) that wholesalers and distributors filed with the Commission in April 2009 and identified no significant errors. However, the Commission lacks adequate controls to ensure that it is collecting all excise taxes due. Specifically:
- For each type of excise tax, only one Commission employee conducts the initial reviews of the monthly tax reports that wholesalers and distributors submit. The Commission does not rotate the staff performing these initial desk reviews.
- Supervisory reviews are conducted only on tax reports in which the initial reviewer identified an error. No supervisory reviews are performed on tax reports without identified errors.
- All invoices, shipping reports, and other supporting documentation for tax reports that do not contain an identified error are discarded.
The Commission's Compliance Audit Division generally ensured that distributors and wholesalers correctly calculated excise tax amounts due and that excise tax audit files included required documentation. However, due to limitations within the Compliance Audit Division's audit tracking system and lack of written policies and procedures, the Commission cannot ensure that it provides sufficient oversight of regional excise tax audit offices.
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