SALT LAKE CITY — A state audit of Utah’s liquor agency will likely reveal more legal problems when it is completed in mid-October, the acting director said Wednesday.
Although Interim Executive Director Francine Giani wouldn’t expand on the legal issues auditors are uncovering, she said they are generally related to long-term practices by some employees at the Department of Alcoholic Beverage Control.
"There are some people who have lost sight of the direction and the law," Giani said.
Part of the problem is the DABC director doesn’t report to the governor, Giani said, but instead to an appointed five-member commission. That can make oversight "murky" and is at least partly to blame for the department’s internal management problems.
Giani, who took temporary control of the department in August, is also the director of the state’s Commerce Department.
Giani replaced former executive director Dennis Kellen after it was discovered that Flexpak, a company owned by Kellen’s son Brian, had been paid more than $270,000 for maintenance supplies and services. The majority of the payments were under $1,000, which is the threshold for seeking competitive bids under state law.
Dennis Kellen disclosed the conflict during his time as director and has said he wasn’t involved in any discussions or decisions about the contracts. Brian Kellen has said the contracts were legal.
The DABC has also faced ongoing criticism from legislators because of an audit that showed the agency lost more than $300,000 after a privately owned store that sold liquor closed.
"I believe the director needs to be appointed by the governor, and the governor needs to have direct oversight," Giani said. "It’s impossible for a commission that’s there four hours a month to know what is going on."
Giani was on Capitol Hill for a hearing before the Senate Business and Labor Confirmation Committee. A full vote of the Senate on the appointments of Giani and DABC Commissioner Constance White is expected Wednesday afternoon.
Josh Loftin can be reached at http://twitter.com/joshloftin.