Colorado's Medical Marijuana Enforcement Division (MMED) failed to pass a state audit it faced earlier this month, as the auditor's report revealed wasteful spending on purchases including furniture, electronics, and vehicles. Beyond the frivolous spending, the audit also highlighted nineteen consecutive months where MMED's expenses far exceeded its revenues despite a large influx of public tax revenue allocated to the Division.
A total of 89 pages of findings against the MMED were reviewed by the Legislative Audit Committee this morning, and included multiple $1,000 office chairs, 50 BlackBerry cell phones, and 33 government vehicles for the Division's 37 full time employees. The March 12 report from State Auditor Dianne Ray's office found that MMED's careless spending has prevented medicinal marijuana from being properly regulated in the state, concluding, "Overall, we found that the Division has not managed its resources effectively to meet its objectives."
The audit report advised MMED to develop new fee-setting processes, stronger control over expenses and purchasing, and better performance management and strategic planning. In all, thirteen different recommendations were noted throughout the audit as issues MMED must address in order to operate as intended.
Auditor's office staff also found that nearly a quarter of all expenses recorded by MMED did not appear reasonable or sufficiently calculated. For example, the division claimed that the purchase of 50 Black Berry smartphones was necessary for occasions when a staff member was out of the office visiting medical marijuana businesses.
The $31,000 MMED spent on 21 tablet computers in fiscal year 2012 was justified as useful for employees in helping them document their work. The Division also "spent about $250,000 on furniture in Fiscal Year 2011. The furniture purchases in our sample included $28,000 for seven desk extenders, $16,000 for three cubicles, and $4,200 for four office chairs."
Representative Daniel Nordberg (R-Colorado Springs), who sits on the bipartisan Legislative Audit Committee comprised of legislators from both the House and the Senate, was troubled by the state auditor's findings.
"I am absolutely appalled by the government waste being presented in this morning's audit of the Medical Marijuana Enforcement Division (MMED)," Nordberg posted to his Facebook page this morning. Nordberg concluded that the audit "continues the disturbing theme of no accountability in [Governor] Hickenlooper's administration."
Senator Steve King (R-Grand Junction), who co-chairs the Committee, agreed with his fellow legislator, adding: "It seems to me we have a dysfunctional system of tracking the marijuana."
The Medical Marijuana Enforcement Division received an exponential growth of revenue in July and August 2010, totaling about $8.1 million in additional money. This was the result of a provision in House Bill 10-1284 that "required existing medical marijuana businesses to apply for a state license by August 1, 2010, if they wanted to continue operating."
Despite the surge in funding, auditors found that the "Division’s monthly revenues and expenditures have rarely matched, resulting in significant revenue shortfalls or surpluses for extended periods."
For 19 consecutive months, beginning in September 2010, MMED expenses far exceeded its revenues. The audit report concluded that such runaway spending "disrupted the Division’s efforts to effectively manage its resources and fulfill its regulatory duties."
The Department of Public Health and Environment, which oversees the MMED, agreed to the recommendations made in the report from Auditor Ray and upheld by the Legislative Audit Committee. The Department of Revenue agreed to the auditor's recommendations, as well, and the agencies will begin implementation of new processes this summer.
The stinging MMED audit report comes on the heels of a January Colorado Energy Office (CEO) report which uncovered $250 million in unaccounted for and mismanaged funds over the last six years.
This story was originally featured at Media Trackers Colorado.