Alcoholic Beverage Commission
An Audit Report on Management Controls at the Alcoholic Beverage Commission
April 1998
Report Number 98-038
Overall Conclusion
The Alcoholic Beverage Commission (Commission) has management controls which provide reasonable assurance that goals and objectives are met. However, improvements are needed in fleet management, the Internal Affairs Department, and some administrative functions. Also, a study should be conducted to determine how much additional revenue could be earned from taxing all cigarettes imported from Mexico.
Key Facts and Findings
The Commission appears to have controls in place to implement the strategy of detecting and deterring violations of the Alcoholic Beverage Code. However, improvements could be made by (1) using available information to monitor fleet assignments, (2) ensuring the independence of the Internal Affairs Department, and (3) enhancing communication on how to file a complaint with the Internal Affairs Department.
The Commission should improve controls in a variety of areas to ensure effective and efficient operations. Improvements to the budgeting process, the performance appraisal system, training, staffing analysis, and human resources performance measures would enhance the Commission's operations. Improvements in processes used in the Internal Audit Department would also enhance operations.
A study should be conducted to determine how much additional revenue could be earned from taxing all cigarettes imported from Mexico. Collecting additional revenue would require a change to the Tax Code. Currently, travelers are allowed to bring one carton of cigarettes per day per person across the border free of tax. Preliminary estimates indicate that if 5 of every 10 estimated smokers cross the border with a tax-free carton of cigarettes, additional annual revenue of $17 million could be earned. Alternatively, if an administrative fee were charged on cigarettes and 5 of every 10 estimated smokers cross the border with a tax-free carton of cigarettes, additional annual revenue of $2 million could be earned.
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