The Department of Alcoholic Beverage Services (DABS) faces several operational and financial challenges, according to a report published July 30. The audit, which was conducted by the Office of the Utah State Auditor, identified five specific findings and recommendations for the department.
The audit, which commenced in February 2026 and concluded in June 2026, identified several areas requiring improvement. One finding noted that the Bailment Inventory Program lacks a formal, centralized policy and financial transparency, as the volume and estimated value of inventory are not externally reported.
Another finding indicated that audits for Type 5 Package Agencies (PA) are predictable, which may not ensure that reported liquor sales are accurate. The report suggested introducing unpredictability into annual audits to prevent agencies from temporarily adjusting behavior to pass inspections.
Regarding financial controls, the audit found an improper separation of duties within the bank reconciliation process. Currently, a staff member performing bank reconciliations could also record adjusting journal entries, which could allow unauthorized adjustments to go undetected.
The report also highlighted issues with deposit timelines and accounting accuracy. Change order deposits are currently exceeding the timeframe permitted by statute and DABS policy. Additionally, the audit found that DABS recorded accounting activity and allocated overhead costs to an inactive liquor store, which can skew performance metrics.
While the report noted that DABS management and the Commission have made significant progress in addressing recurring issues from previous audits, the current findings necessitate further improvements to processes and controls.
The Office of the Utah State Auditor has performed this annual audit of DABS finances, operational effectiveness, and compliance since 2013. The audit was statutorily required and agreed to by the DABS Commission.
