Auditors find material weakness, procurement gaps at Liquor Commission; commission disputes one finding

Auditors with the Legislative Budget Assistant (LBA) told the Fiscal Committee on March 20 that their FY2025 management letter for the New Hampshire Liquor Commission contains seven observations, including a material weakness and two compliance comments. "This is reported as a material weakness, identifying the need for the commission to establish formal policies and procedures and perform critical routine reconciliations for significant accounts and activities," LBA senior audit manager Jim LaRiviere said.

The auditors said the commission missed several key reconciliations in FY2025 and recommended formal policies, periodic reconciliations, review and approval by management, and investigation of differences. They also identified shortcomings in the commission's next‑generation financial and point‑of‑sale reporting, recommending the commission secure specialized IT and report‑development expertise to extract reliable datasets for analysis.

Other observations covered controls for gift and promotional card programs and procurement processes. The LBA recommended more competitive and transparent leasing processes for retail store space, documentation of lease agreements, and familiarity with statewide contract terms. The auditors flagged potential noncompliance with RSA 176:18 for certain nonexempt purchases and encouraged the commission to seek an attorney general opinion on exemptions.

Liquor Commission Chair Joe Molica thanked the auditors and said the commission runs "a business in the state" and concurred with some findings while disputing others. "Some we concur with and some we don't," Molica said. The commission explained it includes headquarters locations in some retail procurement packages to leverage economy of scale and therefore disagreed that a cited example was subject to the statute's competitive‑bidding provisions.

An agency official answering committee questions said the commission is documenting monthly reconciliation processes and is "about 70% reconciled up until February." Committee members pressed for a clear corrective action plan and for who will submit questions to the attorney general if statutory interpretation remains unclear.

The committee accepted the management letter presentation and requested updated corrective action timelines; auditors noted that of prior audit comments across two years, five were fully resolved, 12 remain in remediation and one remains unresolved.

The committee did not propose immediate legislation at the meeting; members said they may pursue statutory clarification if the attorney general's opinion leaves ambiguity. The committee placed the management letter on file.