Wines fill the shelves Tuesday, July 12, 2016, at Chattanooga Wine and Spirits.
These [failures] were not just crossing Ts and dotting Is

Alcoholic Beverage Commission audit


The Tennessee Alcoholic Beverage Commission may see another overhaul at the top if several influential lawmakers have their way.

Sen. Mike Bell, R-Riceville, and Rep. John Ragan, R-Oak Ridge, both expressed their belief commissioners should be ousted, and ousted soon, because of failures noted in audits in 2007, 2009 and last month.

"When you look at an audit and the first finding starts with the line 'as noted in the 2007 financial and compliance audit,' there's a problem," Bell said. " Who [these failures] fall back on are the commissioners. That is where the buck stops. They're the ones, in my opinion, who have not been giving proper attention and oversight to the executive director."

The audit was conducted for the Joint Government Operations Judiciary and Government Subcommittee, of which Bell is a member, and was presented Wednesday morning to the Education, Health and General Welfare Subcommittee, of which Ragan is the chairman.

Last month's audit found continued failure in key areas stretching back more than a decade. The commission failed to put proper policies in place to oversee licenses, did not properly keep track or handle confiscated evidence and did not have proper conflict-of-interest policies in place, among other failures noted in the audit.

The subcommittee voted to recommend the commission continue for at least four more years but asked auditors to follow up within a year to examine what improvements have been made.

However, if Bell has his way, the commission will have new leadership. He encouraged lawmakers and commission directors to write a letter asking Gov. Bill Haslam to replace the current commissioners.

"There will be a letter under my signature going to the governor," Ragan assured Bell.

The commission consists of Chairwoman Mary McDaniel, John Jones and Bryan Kaegi. They did not attend the hearing Wednesday morning.

McDaniel and Kaegi were appointed to the commission on the same day in 2011 while Jones replaced his father on the commission in 1992. They each have overseen the commission during a stretch when audits found key failures throughout it.

"These were not just crossing T's and dotting I's," Bell said. "These have to do with integrity of the system."

New management personnel, who began over the summer, were left to explain the systematic failure by the commission that dates back more than a decade and answer questions about how they are going to fix it.

The agency has, among other changes, a new executive director, assistant director, chief law enforcement officer, administrative services director, Director Clay Byrd said.

Byrd took the position after one former executive director was caught with marijuana in her home, Bell said, and another left suddenly without explanation.

Many of the commission's new hires were at the Wednesday hearing and were praised by Bell, Ragan and other subcommittee members.

"It's very commendable that you all have hit the ground running and not only used this as a challenge and a roadmap to get foundational work done, but you also seem to be doing it in rapid order," said Sen. Janice Bowling, R-Tullahoma, the subcommittee's vice chairwoman.

"Let me compliment Director Byrd and Assistant Director Blair," Bell said. "I want to compliment you on the work you have done so far in the time that you have had to do it."

The new commission managers met individually with several lawmakers to further explain what they are doing to help fix failures noted throughout the last decade.

Subcommittee members asked Byrd and Blair how long it will take new management to correct previous failures.

"It's hard to say how long it will take to be corrected," Byrd said. "But we certainly are improving day by day."

The commission is implementing a new online system and working with a vendor to modernize and improve the way it conducts background checks, a failure noted in previous audits, according to Assistant Director Zach Blair.

Blair has an IT background and is staying on top of the transition, he said.

"We are very excited to be getting into the 21st century and to have accurate digital records that don't exist at the ABC, currently," Blair said. "We are working diligently to get that implemented, and we are looking forward to the launch of an online system very soon."

That system is expected to be rolled out for use in May.

Contact Mark Pace at 423-757-6361 or Follow him on Twitter @THEMarkPace and on Facebook