Watchblog: Audit finds $1 million in assets unaccounted for by Liquor Control Board

An audit of the state liquor control board reveals that the state agency responsible for selling and regulating the consumption of wine and liquor overstated its assets by more than $1 million during the past fiscal year.

LCB employee Larry Smith stocking shelves in 2005 at the State Store in Franklin Mills, one of 613 that Pennsylvania operates. (Jonathon Wilson/ File Photograph)Read more

by Eric Boehm, PA INDEPENDENT

Published May 14, 2013, 11:30 a.m. ET

HARRISBURG – An audit of the state liquor control board reveals that the state agency responsible for selling and regulating the consumption of wine and liquor overstated its assets by more than $1 million during the past fiscal year.

The audit, quietly released in March and uncovered by Keri Andren of the Pittsburgh Tribune-Review for a story published over the weekend, was conducted by the state auditor general and looked at the fiscal year that ended on June 30, 2012. It shows that the PLCB does not regularly take a physical inventory, leading to the inaccurate information on financial statements.

Andren explains:

The audit found that in a random sample of 10 items from the LCB's list of assets, six items valued at $1.047 million were no longer being used or were described vaguely and could not be identified by LCB officials or a store manager.

The list of assets includes items such as store shelving and signs, cash registers and warehouse machinery. It does not include wine and spirits inventory.

Stacy Kriedeman, spokeswoman for the LCB, denies its assets were overstated. She said the audit's sample looked at fully depreciated items, or older items that were beyond their useful life.

With the state legislature knee-deep in a debate over the future of the state-owned and operated liquor stores, the actual value of the physical assets owned by the PLCB is a significant point.

Pro-privatization Republicans like Gov. Tom Corbett and House Majority Leader Mike Turzai want to raise between $800 million and $1.2 billion from selling off the liquor stores, with most of the revenue coming from the auction of private liquor licenses.

But it's understandable how the PLCB would have difficulty finding time to conduct inventory of their internal assets, what with all the time they spend developing ideas like million-dollar wine tasting rooms for government employees, ill-fated grocery store wine kiosks and advertisements that warn about the dangers of drinking alcohol (while simultaneously spending millions on ads convincing you to buy more booze.)

Boehm can be reached at Eric@PAIndependent.com.

Pennsylvania Independent is a public interest journalism project dedicated to promoting open, transparent, and accountable state government by reporting on the activities of agencies, bureaucracies, and politicians in Pennsylvania.