COLUMBUS, OH (FOX19) - An audit of Ohio's medical marijuana program found several mistakes and an inconsistent application of scoring rules, State Auditor Dave Yost announced Thursday.
The Ohio Department of Commerce exceeded its legal authority when it awarded two additional licenses to cultivators in the state's fledgling medical marijuana program, the audit shows.
The Commerce Department was legally limited to issue up to 12 large-scale (Level I) and small-scale (Level II) provisional cultivator licenses before Sept. 8.
Despite that, it created an additional 13th provisional license for both levels in an attempt to correct errors it made during its process, the audit found.
That was the most significant of the dozens of errors and inconsistencies auditors found in their review of the process used by the Commerce Department to evaluate, score and award provisional licenses, a news release states.
"The Department didn't do a very good job launching this program," Yost said. "It did not exercise due diligence to make sure Ohioans could have complete confidence in the process. The Department's work was sloppy. Ohioans deserved better."
A spokeswoman for the Commerce Department said they were aware of the audit's findings and have been working with auditors for months. She directed us to a letter from their office included in the full audit.
Ohio's medical marijuana program was supposed to roll out earlier this month, but the start date has been delayed several months over licensing and other business-related delays.
The three offices that share responsibility for Ohio's Medical Marijuana Control Program - the Commerce Department and the state medical and pharmacy boards - have said Ohio's two-year implementation schedule was aggressive.
The state has certified some 250 doctors and provisionally licensed 26 large and small growers, four testing labs, 40 processors, and 56 dispensaries.
Auditors found weaknesses throughout the process, including in the way the Commerce Department protected passwords, system folders and summary scoring sheets.
Though auditors found no evidence of intentional manipulation, the totality of identified weaknesses indicates that the opportunity to manipulate scores did exist.
For example, auditors uncovered errors made in final score calculations affecting 13 applicants and in reviewer score sheets affecting 15 applications – errors which could have disqualified two small-scale provisional applications.
A number of the issues auditors found during their review of the program were shared with the Commerce Department during the course of the audit was complete so Commerce officials could correct and not repeat them in the awarding of subsequent licenses.
During the auditors' review, they asked the department for additional information regarding final score calculations.
At that time, the Commerce Department more closely reviewed the information it was providing and later acknowledged scoring errors were made in the large-scale (Level I) cultivator final score calculation.
These particular errors were not disclosed or acted on until the auditor's office requested and compared master score sheets.
But for the auditor's investigation, these errors might never have come to light. Yost's office noted.
"The Department should have conducted this additional and more-thorough review before it awarded any licenses," he said. "In an attempt to make up for the initial errors, the Department compounded the problem by awarding additional licenses outside the bounds of its authority."
Commerce Department officials maintain they acted legally in awarding additional provisional licenses, citing a May 18 Franklin County Common Pleas Court ruling on a temporary order.
However, the judge in the case wrote, "nothing in this Opinion should be taken as binding."
Auditors also found that although the department intended personal identifying information about applicants to be redacted from scoring materials, identifying information remained available to evaluaters in five of 11 applications reviewed – or nearly 50 percent of those tested.
In addition, auditors found they applied inconsistent standards in determining if cultivators met zoning requirements.
In effect, this set a higher or lower bar for some applicants. This had the material effect of awarding a license to an applicant who could have otherwise been disqualified, auditors said.
"For some applicants, the Department accepted letters from local zoning officials as sufficient evidence that the applicants met the standard for compliance. But for others, who had the same type of letters, the Department did not," Yost said. "There was no rhyme or reason for the disparate treatment."
The Commerce Department commissioned Ernst & Young to review the process it used to evaluate, score and award provisional licenses.
Ernst & Young was to produce two reports, one for Level I licenses and the other for Level II.
Additionally, auditors were told Ernst & Young would make attempts to completely re-score sheets by reassembling the teams that initially produced scores. To date, the Department said it has never seen the Level II report.
Auditors did not attempt to re-score the applications as they did not have the specialized expertise in marijuana cultivation that the Commerce Department said was necessary for scoring.
The Commerce Department hired consultants and used specialized state employees to conduct the scoring.