Youngsville ABC Board
Performance Audit Report
TABLE OF CONTENTS
ABC Commission Statement .................................................................................... 3
Objective, Purpose & Background Information ............................................................. 4
Financial Analysis, Observations & Findings .......................................................... 6
Recommended Actions & Additional Considerations ....................................... 13-16
Appendix A -Youngsville ABC Board Response Letter ................................... 17-18
July 3, 2024
Youngsville ABC Board
Mason Hurt, Chair
1170 US 1 N.
Youngsville, NC 27596
Chairperson Hurt,
On the following pages you will find the performance audit report conducted by the
staff of the ABC Commission Reviewing the operations of the Youngsville ABC Board.
The report consists of an overview of the objectives & background summary,
financial analysis and findings, and a summary of actions recommended based
upon your board's performance and related findings. Additional considerations
are listed as well to provide further guidance and enhance awareness to promote
ABC board success.
Please reach out if you have any questions or require assistance in implementing
any of the statute requirements, Commission rules, or other recommendations
included in the report. On behalf of the North Carolina ABC Commission, I thank
you and your staff for your assistance and cooperation in conducting this periodic
review. We appreciate the continued efforts by your board to comply with the
performance standards, as well as the board’s commitment to increase
profitability and reduce expenses.
If we can be of assistance in the future, please do not hesitate to reach out to the
Commission staff.
Respectfully,
Michael DeSilva
Deputy Commissioner
3
In addition to regular and special financial audits, G.S. 18B-705(a) authorizes the NC ABC
Commission to conduct performance audits of all local ABC boards in the state. Performance
audits are examinations of existing operating policies, practices, controls, and activities to
determine those areas in which there may be a need for improvement.
The audits are designed to ensure that all local ABC Boards comply with established performance
standards pursuant to G.S. 18B-203(a)(20). The audit’s scope addresses compliance with ABC
laws and rules, store appearance, operating efficiency, solvency, and customer service.
To achieve the objectives of the audit, auditors:
• Review applicable General Statues, ABC Commission Rules, and Administrative
Policies
• Review applicable reports and studies of ABC Boards with similar size and
geography
• Verify compliance with Commission and Board policies
• Verify results of previous performance audit recommendations
• Review ABC Board annual independent financial audits
• Review ABC Board reporting and documentation reports
• Visit the store(s)
• Interview key ABC Board personnel
OBJECTIVE, PURPOSE & BACKGROUND INFORMATION
4
The Town of Youngsville is found in northcentral North Carolina in Franklin County. The quaint town
is known for its neighborly attitude towards residents and visitors and its downtown area. The town’s
population per the 2020 Census was approximately 2,016 residents which was an approximate 74%
population increase since 2010.
1971 S.L Chapter 328 authorized the town to hold a referendum for an ABC store. The referendum
was held June 15, 1971, and the vote passed 104 to 80. The first retail sales here occurred on August
2, 1971. A mixed beverage referendum was hold on November 3, 2015, and passed 47 to 13. The
Youngsville ABC Board is one of four (4) boards in the county. Currently, the Youngsville Mayor and
Town Council appoint a chairperson and four (4) additional board members to serve on the ABC
board.
The Youngsville ABC Board operates one (1) retail store. A second store is slated to open within the
year. The board currently staffs eighteen (18) total employees including five (5) full time and thirteen
(13) part time. Five (5) of the current full-time personnel are enrolled in the NC457 (b) retirement plan
based on employee and company contributions. The general manager is responsible for all aspects of
store oversight focusing on administrative responsibilities to include Human Resources, marketing,
finance, and operations. The finance officer provides the general manager/budget officer and the board
with fiscal management, all things accounting and administrative, to include payroll, payables, and
reconciliation, and a host of other responsibilities. Assistant general manager is responsible for
ordering, inventory, and many other operational duties. Store manager(s) facilitate day to day
operations of the store including opening and closing, transactions, stocking, and supervision of
employees. Customer Experience Specialists responsibilities include selling products, daily stocking,
floor upkeep-maintenance and enhancing the customer’s experience.
The last performance audit for the Youngsville ABC Board occurred in 2014. The Commission audit
serves as a continuous way to provide local boards with information and best practices that target areas
for improvement.
5
On Tuesday, May 21, 2024, ABC Board Program Analyst Edwin Strickland, visited the Youngsville ABC Board
and interviewed Bridget Stanley (General Manager) and Amy Hernandez (Finance Officer) and spoke with other
team members. Below is a financial analysis followed by operation observations, findings, and recommendations
related to the performance audit.
FINANCIAL ANALYSIS
INVENTORY TURNOVER
The inventory turnover rate is calculated by dividing the cost of liquor by the average inventory in the system (Cost
of Liquor/Average Inventory). The Commission has set goals for determining an effective rate based on the
frequency of deliveries. Below are the turnover rates based upon the delivery schedule:
• Once a week deliveries target at 6 times or more per year
• Twice a month deliveries target at 5 times or more per year
• Monthly deliveries target at 4.5 times or more per year
The Youngsville ABC Board received shipments 4 times a month. The inventory turnover rate in (FY) 2022-2023
was 5, which is slightly lower than the target goal of 6 or more times per year.
PROFIT PERCENTAGE TO SALES & OPERATING COSTRATIO
In fiscal year (FY) 2022-2023, the Youngsville ABC Board had a profit percentage to sales of
11.95%. The NC ABC Commission profit to sales standards for ABC Boards with gross sales
greater than $2M is 6.5%. The Youngsville ABC Board’s gross sales totaled $6,655,434, which
was a 18.6% increase from the previous fiscal year. The board’s sales have grown an
astonishing 372% over the last five completed fiscal years.
The operating cost ratio for the Youngsville ABC Board was .48 in FY 2022-2023. The NC
ABC Commission standard for ABC Boards with one or two stores and mixed beverage sales is
.73 or less.
Thus, the Youngsville ABC Board met both the profitability standard and the operating cost
standard set by the NC ABC Commission. Below is a chart showing gross profit on sales and
income from operations for the previous two years.
OPERATIONAL OBSERVATIONS, FINDINGS,
REQUIRED ACTIONS, & RECOMMENDATIONS
6
FY 2022-2023
FY 2021-2022
Gross Profit on Sales
$1,629,124
$1,355,788
Income from Operations
$795,107
$686,734
Factors affecting profitability and cost include:
➢ Surrounding areas with other ABC Boards operating stores within an approximate twenty-five (25)
mile range of Youngsville ABC: Franklinton, Louisburg, Bunn, Wake County, Granville County,
and Vance County.
➢ An ABC Board’s average cost of goods sold (COGS) is between 52% & 54% per year. The
Youngsville ABC Board’s cost of goods sold was approximately 53.2% in FY 2022-2023.
o The board has three (3) mixed beverage accounts.
BUDGET ANALYSIS
FY 2021-2022
Budget Projections
FY2021-2022
Actual
Variance
Variance %
Sales
$6,655,434
$6,655,434
0
0.0%
Revenue over or (under)
Expenditures
$236,775
In reviewing the budget to actual analysis of the FY 2022-2023 financial audit, final budget
amendment yielded no variance in budget to actual sales. The net income changeduring the fiscal
year was $572,461. The board’s collective net position on June 30, 2023, was $1,490,519; thenet
position has steadily increased over the last five (5) fiscal years, and the FY-2023 figure reflects
the board’s highest overall net position during the five-year period.
DISTRIBUTIONS
G.S. 18B-805 (b) requires the board to pay from gross receipts, all expenses, excise, and rehabilitation taxes. G.S.
18B-805(c)(2) requires the board to typically distribute at least five percent (5%) of applicable gross receipts to law
enforcement and typically at least seven percent (7%) for alcohol education. Before assigning these percentage
distributions, G.S. 18B-805(c)(1) requires the board to first make a minimum quarterly distribution of the 3.5%
markup & relevant bottle charges to certain county/municipal recipients. Some of these distribution percentages
are designated by an official local enabling act (and thus distribution requirements and recipients are subject to
vary).
In FY 2022-2023, Youngsville ABC made other statutory distributions totaling $200,019 (Net profit distribution
recipients received $135,557 of this). The amount of $1,484,8432 in primary distributions and other taxes were
paid to the NC Department of Revenue (NCDOR), DHHS, and the county commissioners of Franklin County.
Per the local enabling act, the distribution formula for recipients of net profits is as follows:
➢ One hundred percent (100%) to Youngsville General Fund
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WORKING CAPITAL
G.S. 18B-805(d) allows the board to set aside a portion of the remaining gross receipts, within the limits set by the
rules of the Commission, as cash to operate the ABC system. The NC ABC Commission has set a working capital
standard for boards with annual gross sales greater than $1.5M but less than $50M as an amount equal to three (3)
months of sales revenue.
Based upon the existing rules, as of June 30, 2023, the Youngsville ABC Board is required to maintain a minimum
working capital of $198,868 with a maximum working capital amount of $1,723,516. The Youngsville ABC
Board had a working capital balance of $962,518, which falls within the Commission requirements for this section
(*).
* FY 2022-2023: Working Capital (WC) graphic
MIN MAX
*ACTUAL*
Under 18B-805(d), with approval of the appointing authority for the board, the local board may
set aside a portion of the remaining gross receipts as a fund for specific capital improvements
whenever working capital is exceeded.
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PERSONNEL, OPERATIONAL & ADMINISTRATIVECOMPLIANCE
The findings for personnel, operational & administrative compliance are as follows:
➢ The board holds board meetings the third Tuesday of each month at 7:30 PM, records regular meeting minutes, and
provides public notification and awareness of these meetings. The meeting minutes are organized electronically for
review at the board, in a book at town hall, and are published on town’s website and board’s website. Additionally,
the board meetings are recorded and available via YouTube. The minutes provided have the time and date, conflict-
of-interest disclosure statements, and distinguished between new and old business. The board and deputy town
clerk have plan for approved minutes to be routinely signed by the Chairperson.
o Training records review: Board members and board personnel are compliant on ethics training referencing
NCGS 18B-706(b). One board member’s term slated to end in June 2024. If reappointed or if new
appointment is established, member would need to complete ethics training in an appropriate amount of
time not to exceed one year from appointment.
o Board member compensation & General Manager (GM) salary: Board members receive compensation for
their services less than or equal to the maximum $150.00 per meeting. The General Manager has updated
their salary for Commission records. Any future salary changes should be relayed to the ABC Commission
for record retention.
o Board website review: The board’s login website was updated by the Commission in 2022 for board
member term tenure information (begin dates & end dates). Special note: As part of a revalidation effort,
the Commission has worked to revalidate term tenure information for all ABC boards across the state,
working directly with the appointing authorities. As a value-added measure for all ABC boards and
Commission records tracking in summer 2022, the term begin dates as well as term end dates were entered
on all individual ABC board websites.
▪ The expectation going forward is that ABC boards will routinely manage this information
online, and work to communicate with the Commission particularly when new members are
added, or whenever any current serving members resign before a term has ended.
o Board Personnel & Board Members: The general manager provides board members with monthly sales
information to include actual versus forecasted and specific areas, rankings, and focuses. The finance
officer provides updates on accounts and other activities associated with the financial operation of the
board. Both serve to answer inquiries from board members questions and points of clarification are
routinely asked. Board members are heavily encouraged by the Commission to use checks and balances
to ensure that cash management practices are upheld especially on payroll. Boards should routinely
review any notes and recommendations provided by the CPA firm onannual audits. Board members
have an array of experience including business and professional services and communityinvolvement.
➢ POLICIES: The board has a variety of policies and SOPs to include mixed beverage and mixed beverage
delivery, credit card, shelf management, rules of conduct, and a newly adopted parental leave policy. The GM
and FO have created a very well-crafted policy for ACH payments that is serving as a template for otherboards.
For travel policy, the board now chooses to adhere to their municipal travel policy. The board must annually
obtain approval from the appointing authority to adhere to their local government travel policy and annually
provide the Commission a copy of this approval per G.S. 18B-702(g2).
➢ BUDGETS: In FY-22/23, the board exceeded budgeted sales in June 2023. A year end reconciliation budget
amendment was found in Commission records. Based on sales trajectory for the current fiscal year with 83% of
the budget year completed, the board is tracking higher than forecasted at 94% of annual budgetedsales.
➢ FINANCIAL INSIGHT: The finance officer (and others) has worked diligently to collect ACH payment
information from suppliers and other payees. All payments are made via Quick Books and Melio by Finance
Officer. General manager verifies payments monthly and auto signs verification report. Invoice records for
recent liquor purchases reflect them as being paid routinely well inside of 30 days. Taxes and distributions are
paid monthly. Daily deposits are reviewed by team members and balanced by finance officer with realaccount
data. Full bank reconciliation is completed monthly by finance officer and reviewed monthly by general
manager to correct codes and provide full oversight.
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PERSONNEL, OPERATIONAL & ADMINISTRATIVE COMPLIANCE(cont.)
o Bank deposits are routinely made each business day per review of bank Statements and discussion with the
finance officer and general manager. Tills are counted by store leaders and discrepancies are verified and
documented if they exceed $20.00. Daily cash balance sheets for balancing deposits and variance, and for
tracking bill denominations and coinage. For safeguard measures and adherence to Commission rule 15A
.0905 Daily Deposits, the board utilizes a locked fireproof safe for integrity of funds that remain at the
board at any given time.
o Assistant General Manager reviews timecards and submits payroll file to Quick Books. Payroll is reviewed
and processed bi-weekly by the finance officer through Quick Books. Payroll is reviewed by general
manager and records are retained via Quick Book reporting. Bank reconciliation report was reviewed for
current period. Board does have check books available for select key personnel which are seldom used.
Please verify any checks issued contain dual signatures to include finance officer and general manger or
chairperson.
o Purchase order requests forms require signatures from both finance officer and general manager. The pre-
audit certificate is not on liquor orders at the time they are placed; however, the preaudit approval and
general manager signatures are now on ACH payments history for liquor orders. Board has developed
and implemented a means for FO to verify liquor purchases orders are pre-audited. Staff sends final
order total to FO who digitally signs as pre-audited.
o All board members, General Manager and Finance Officer are each bonded for $50,000 per G.S. 18B-
700(i). Board should consider insuring bonds cover other applicable staff to include store manager(s)
and other employees per G.S. 18B-803(b)(c).
o The annual CPA audit was received and logged by the Commission on September 22, 2023.
➢ STATUTORY DISTRIBUTIONS:
o Net Profit Distributions - The Youngsville ABC board has made net profit distributions over the last three (3)
fiscal years, meeting the mandatory distribution those years in reference to NCGS 18B-805(c)(1). The table
below references distributions calculated on the left and total distributions made by the ABC Boardfor
the last five (5) years on the right. FY’s ending 2018 and 2019 board made distributions below minimum
per agreement with appointing authority. Distributions are made monthly.
o Law Enforcement Distributions: Have been properly disbursed at or above the standard 5% statute amount for
the last five (5) FYs. Distributions are made monthly.
Alcohol Education Distributions: Have been properly disbursed at or above the standard 7% statute amount for
the last five (5) FYs. Distributions are made monthly.
NC GENERAL STATUTE: 18B-805 (c)(1)
Calculation of Minimum
Mandatory Distribution for Net
Profit to Designated Recipient(s)
Note: Referencing CPA Audit Reports
Youngsville ABC Board
Net profit distribution made
annually by fiscal year
CPA Calculated Amount
Total paid to recipient(s)
FY-2023
$135,557
FY-2023
$135,557
FY-2022
$156,417
FY-2022
$156,417
FY-2021
$66,610
FY-2021
$66,611
FY-2020
$52,015
FY-2020
$37,089
FY-2019
$40,786
FY-2019
$36,478
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PERSONNEL, OPERATIONAL & ADMINISTRATIVE COMPLIANCE (cont.)
➢ LAW ENFORCEMENT (LE) REPORTS: Reports are being submitted routinely, and they are current to date as
well. Submitted reports come from CPT B. Lemons
➢ LAW ENFORCEMENT (LE) CONTRACT: The board has a law enforcement contract on file at the
Commission with the Youngsville Police Department. Contract on file in Commission retention records is from
2019 and has signatures from different board members and possibly town officials. If more recent contract is
available board should send electronically to Commission.
➢ INVENTORY: Full store inventory is annual with categorical inventories conducted weekly; thus, inventory is
perpetual. Assistant General Manager heads inventory discrepancies and adjustments. Multiple key personnel
involved with deliveries and scanning for discrepancies between order, manifest, and actual shipment. Strategies
for slow moving stock include dual displays, requested tastings, and price reductions. General manager has
developed a matrix for staggered price reductions. Additional space availabilities from new store and warehouse
will allow for opportunities to escalate SPA buy ins.
➢ INTERNAL CONTROLS:
o The general manager (GM) has a long tenure and a wealth of experience in the retail industry. Assistant
general manager (AGM) and store leaders provide additional experience and knowledge with regards to
retail and specifically the alcohol industry.
o Finance officer (FO) has an extensive knowledge of all things related to accounting and bookkeeping. FO
formerly owned/operated a bookkeeping service, is a Quick Books pro advisor, and has very innovative
strategies for administrative projects.
o The executive team and other personnel meet frequently in person and/or through teams or other remote
services to discuss ideas, changes, issues, and other relevant topics to operations.
o Invoice information from DSD Link is exported in excel and entered into a bulk invoice website, Sasset,
which imports into Quick Books. Payment service Melio is linked to Quick Books and ACH payments are
made capturing all applicable invoices to reduce payment quantities. FO matches Quick Books to accounts
and generates reports to verify paid/unpaid. GM goes through monthly to verify payments and auto signs
report verifying payments are made to appropriate sources.
➢ EXPENSES:
o Total operating expenses in FY 22/23 increased over twenty-four percent (24%) from the last fiscal year.
o Board payroll and taxes was approximately seven and a half percent (7.5%) of total annual sales. Payroll
salaries and taxes increased by roughly twenty nine percent (29%) from the previous fiscal year.
o Cost of Goods Sold (COGS) was roughly 53.2% for the fiscal year with a normal range being 52% to
54%. The board could explore more buy-ins to keep the COGS low with new warehouseopportunity.
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STORE INSIGHT & OVERVIEW
The findings for store insight & overview are as follows:
➢ Board location store has a modern layout and promotes a festive and energetic feeling. Shelving
and displays are maximized but allow for easy flow for patrons/staff. Some additional new
shelving is planned to increase from the current 1463 linear feet.
➢ Warehouse space is beyond fully utilized. New store will help serve as additional warehouse space
for current store as that warehouse is at capacity.
➢ Customer Experience Specialist’s interactions with customers are attentive, courteous, and all are
eager to meet the needs of the customers and enhance their overall experience. Entire staff actively
engages with patrons at a high level.
➢ All team members receive full on-boarding for all policies and expectations in initial phase of
employment. Board has a digital training video with quizzes to facilitate training and product
knowledge they plan to implement in the coming months.
➢ Board has a comprehensive website that provides a variety of information for the public to include
alcohol rules and law education, recipes, community involvement, fund distribution, events,
contact information and career opportunities. Additionally, the board has multiple social media
platforms.
➢ Store has mobile ordering, and the public can view inventory of items other than limited or
allocated. Orders are filled and await customers visit.
➢ Special orders requests from patrons are fulfilled as quickly as possible and board will order any
requests.
➢ Tastings are held frequently, and the board encourages industry members to visit and conduct.
Board has digital agreement and on-line booking system for vendors.
➢ Board utilizes a survey for feedback from visitors asking questions to enhance customer
experience.
➢ The board has three (3) mixed beverage customers and works to accommodate orders to include
delivery. Board personnel will sometimes call customers to encourage an order prior to busy
periods to help ensure order fulfillment is manageable.
➢ Board has lottery ticketed events for allocated product.
➢ Price discrepancies are handled in the customer’s favor and prices are updated immediately.
➢ The board closes on the five (5) required annual holidays and every Sunday.
➢ A random sample of approximately 100 items were selected to determine if uniform pricing is
displayed. Of those selected, all items reflected the current quarterly or monthly SPA price. The
board has very professional labels and sticker system to indicate special priced items. The store
has good categorization and signage. Managers and team members have innovative ideas for
product placement.
➢ Board has breakage bin and tabs of unsaleable reports for each broker.
➢ The stores display the required Fetal Alcohol Syndrome poster required by G.S. 18B-808.
➢ Products are placed within the designated categories; premium products are generally found at eye-level or
top shelf. Bottles were fronted and dusted, and shelf space is maximized. Some shelf management
guidelines were not fully adhered to with some bottles not increasing from left to right in size.
➢ Outside area surrounding the stores are well-maintained and free of debris or trash.
➢ Security systems are in place and functional in all designated areas.
o Ten (10) cameras work to cover the retail area.
o Additional cameras planned to be added in future.
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RECOMMENDED ACTIONS (PER STATUTES OR COMMISSION RULES)
➢ The board must annually obtain approval from the appointing authority to adhere to their local government travel
policy and annually provide the Commission a copy of this approval per G.S. 18B-700(g2). NOTE: As another
option the board can alternately adopt the official State of NC government travel policy referenced under G.S. 138-
6. This would allow the board an option to eliminate the annual travel policy update requirement by instead
formally adopting the state government travel policy at an official board meeting and providing a copy ofminutes
to the Commission.
➢ NCAC Rule 15A .1701 requires quarterly reports be submitted to Commission for any unsaleable merchandise
(breakage) and retain original copies for three (3) years. All breakage reports should only be transmitted via email
submission to Commission staff; copies should not be mailed.
➢ Shelf management plan should be fully followed to include arranging bottles, so they increase (in size) from left to
right of the same item. 15A .1708 (a)(3)
➢ The recipients of alcohol education distributions must provide annual documentation to the board describing the
activity for which these awarded funds are spent per G.S. 18B-805(h). The board may want to considerobtaining
documentation before the funds are officially awarded / transmitted to any recipients.
➢ Board could consider staggering board member terms to have at least one term end date a year and no more than
two term end dates each year. Currently there are three board members with term end dates at the sametime.
➢ In connection with the periodic audit, a Certificate of Accountability attestation form should be reviewed and
signed by board members and applicable personnel. A signed copy would then only need to be emailed to
Commission personnel for recordkeeping.
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Previous Performance Audit Findings and Actions (status)
• Closely monitor monthly overhead and business expenses. Request bids from vendors to ensure that the best price is
offered for services provided, such as insurance, professional fees, some utilities, and bank/credit card charges. Board
complies.
• In FY 2012, Youngsville ABC had a working capital of $33,617 which is equivalent to less than four months gross sales
and is not within the limits of NCAC 02R .0902 (Now 15A .0902). Working capital requirements currently within
required range.
• Consider modernizing the store to increase shelf space and encourage impulse shopping and will in turn increase
profitability. Board complies.
• Consider developing a strategy for product placement utilizing the marketing and industry standards. An efficient shelf
management plan focuses on the growing market. Recommended practices are as follows: a. Brand blocking products
with bottles with mid-price, or premium products, at eye level, high-priced, or ultra-premium products, on top shelves
and lower priced, value products, on lower shelves; b. Cross-merchandising by placing products that mix together on
the same shelves. Intermingle North Carolina products within their specific category as well as having a designated area;
c. Reallocating shelf space from declining categories to those showing growth; d. Allow more space for your more popular
brands and re-allocating space when eliminating underperforming brands. Board complies.
• Bring all board members into compliance with the state ethics requirement. All newly appointed board members must
receive ethics education with 12 months of appointment. Refer to Appendix B (1) for statute. Boardcomplies.
• Have an agreed upon law enforcement contract and submit to the Commission. All local boards are required to have an
agreement, even if the agreement results in no enforcement activity without pay. Refer to Appendix B (2) for statute.
Board complies.
• Update employee handbook to reflect current practices and policies expected and outlines the duties and responsibilities
of each employee, board policies, and benefits offered, if any. Forward copies to all employees and request a signed
acknowledgement of receipt from every employee to be filed in the designated personnel files. Once adopted, submit to
the Commission. Refer Appendix B (4) for rule. Board complies.
• To strengthen inventory controls, consider implementing procedures that would segregate duties. Physical inventories
should be performed by someone other than the person(s) responsible for that inventory on a daily basis. When this is
not possible, the physical inventory should be spot-checked by the bookkeeper, a board member, and/or finance officer
(someone not handling the inventory daily). Board could still consider cross personnel for inventories.
• Adopt a written cash shortage and overage policy. While this is understood, it is good business practice to have written
procedures in place for current and future employees. Once adopted, submit a copy to the Commission and include in
the employee personnel manual. Board could still consider.
• Have the board chairman read the conflict-of-interest statement to all board members at the start of each meeting.
Reference the conflict-of-interest statement was read in the board minutes. Refer to Appendix B (5) for rule. Board
complies.
• Update the bonding insurance to include the general manager and the finance officer as bonded for $50,000 along with
all board members. Refer to Appendix B (6) for statute. Board complies.
• Follow the Records Retention Schedule that explains how long to keep the documentation of board meeting minutes,
liquor invoices, etc. Board complies.
• Place the pre-audit certificate with the finance officer’s signature on the order to LB&B. When ordering supplies, have
a purchase order or order confirmation that will have authorization from the finance officer before the transaction takes
place. Refer to Appendix B (7) for statute. Board working to satisfy.
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ADDITIONAL CONSIDERATIONS & GUIDANCE ….
➢ The Commission’s primary focus for ABC board members:
o ABC board members are highly encouraged to meet monthly for the best formal oversight and review of board
operations, routinely recording meeting minutes (adhering to closed meeting requirements where applicable)
and ensuring either no conflicts of interest are present or that they are addressed appropriately when presented.
Monthly sales should be reported to the Commission at beginning of next month, providing annual budgets,
budget amendments, miscellaneous financial reporting to Commission following timelines, and ensuring
Commission has annual CPA audits by Oct 1
st
.
o ABC boards are highly encouraged to keep term begin dates & term end dates updated on the Commission’s
board login website for all ABC board members and other information such as store hour changes, pictures,
email updates, etc. Moreover, liaising with the Commission when new members are appointed or when member
resign early before term has ended is very important for recordkeeping efforts of the Commission.
➢ ABC boards are highly encouraged to find straightforward ways to lower any recurring expenses. A very tangible way
to lower operating costs is to fully maximize monthly special purchase allowance (SPA) liquor products that routinely
sell well in the store to lower cost of goods sold (COGS). ABC Boards can limit the number of personnel travelling to
conference and convention events across the state. Other ways to try to improve expenses include requesting bids
annually from various vendors to get the best rates possible on financial audits, various utilities, maintenance contracts,
and credit card processing companies.
➢ Boards must keep full and accurate minutes of all official meetings, including all closed sessions, referencing
G.S. 143-318.10. Regular minutes should make a general reference to the reason for closed session occurring.
Closed sessions minutes could either be kept at the board location secured under lock and key, or with board
attorney (or appointing authority attorney) for proper stewardship.
➢ ABC board members must complete ethics training within one (1) year of each appointment and again following
all reappointments following NCGS 18B-706(b). General managers, finance officers (and any applicable deputies)
have a one-time training requirement for ethics training yet are highly encouraged to complete training
periodically as a good refresher along with any other personnel interested.
➢ ABC Boards are required to operate within a balanced budget each fiscal year. Budget amendments must be
approved by the board before any funds are transferred between accounts and utilized, occurring at the actual point
of time an adjustment of funds is necessary. This would include the point in time during the fiscal year when the
board will exceed its annual forecasted sales budget. Ensure budget amendment copies are submitted to the ABC
Commission as required per NCGS 18B-702(h), to include a final reconciliation budget amendment for the fiscal
year end.
➢ ABC boards are encouraged to closely review financial statements monthly, comparing with the annual budget forecast,
approving budget amendments when necessary and submitting copies to the Commission for anticipated sales increases
as well as other adjustments for budgeted accounts.
➢ Law enforcement reports must be submitted on the Commission’s board website by the 7
th
of each month referencing
G.S. 18B-501(f1). In cases where law enforcement provides no information in any given month, simply enter “No data
provided by law enforcement” in narrative of report. ABC Boards should make sure reports are in a “Final Submitted”
status and not just in saved status. For any saved reports, the only transaction necessary to finalize them is to click the
preview button and then click the submit button.
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➢ Ensure all purchase orders to include obligations evidenced by a contract or agreement requiring the payment of
money, shall include or bear a certificate stating that the instrument (or order) has been pre-audited to ensure
compliance with G.S. 18B-702(m) with a signature by the finance officer. The specific statement should read, “This
instrument has been pre audited in the manner required by G.S. 18B-702.” Special note: This could be most
reasonably accomplished by signing & stamping the summary total of the Order Edit List from inventory system
before any liquor orders are placed with state warehouse.
➢ Cross training opportunities for personnel should be maximized to ensure solid continuity of operations occurs for ABC
boards. Also, training opportunities can work well to develop store employees for increased responsibility roles and
serving to make both the routine operations and employee morale stronger. Board should consider RASPtraining.
➢ As a reminder, remove all faded posters and replace with new ones when applicable. Reach out to the Commissionto
provide fetal alcohol syndrome posters, NC Dept of Labor can provide wage & hour posters, and OSHA can provide
some applicable federal posters if any are needed.
➢ ABC boards can explore additional training opportunities periodically available through the ABC Commission aswell
as partnering with other ABC boards on specific areas such as best retail and marketing practices.
Please network with the ABC Commission whenever needed for guidance and assistance to
support local ABC board mission and success.
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Town ofYoungsville
Alcoholic Beverage Control Board
Official Response to the Performance
&
Standards Audit Report - 2024
NC ABC
Commission
400 E. Tryon Rd.
Raleigh, NC 27610
July 3, 2024
On behalf of the Town of Youngsville Alcoholic Beverage Control Board, I thank you
for your review and audit of our performance and standards. We truly appreciate your
support and recommendations from the audit recently performed in June 2024, and
genuinely support the present control system for the State of North Carolina. Our Board
remains diligently focused on having a positive impact and relationship with our local
and state communities through our efforts in the control of spirituous liquor, our
monetary distributions to various community outlets, and the prevention of underage
drinking and alcohol abuse through our alcohol education efforts. This performance audit
has shown us a few new ways on how to continue to improve. Please find below our
responses to the findings and recommendations.
Item 1: Adopt Travel Policy and provide documentation to the NC ABC
Commission
All available options will be presented to our Board for vote by our August meeting. Once our
Board has voted to implement an official policy version, we will follow the appropriate
required process with our appointing authority and submit all supporting all supporting
documentation to the NC ABC Commission.
Item 2: As stated in NCAC Rule lSA.1701, all breakage reports should be
transmitted via email submission to the NC ABC Commission Staff each
quarter and copies retained for 3 years.
All reports have been sent and we are currently up to date for all required breakage forms.
Board Leadership will continue to send quarterly scheduled reports via email as required.
Item 3: As stated in NC AC Rule lSA.1708 (a)(3), the Shelf Management
Plan should be followed to include arranging bottles, so they increase in size
from left to right of the same item.
Corrections to be made as shelves are stocked over time to be completed by the end of the
calendar year 2024.
YOUNGSVILL E ABC BOARD
I
Response Letter to Perfonnance & Standards Audit - 2024
17
Town of Youngsville
Alcoholic Beverage Control Board
Item 4: Per G.S. 18B-805(h), require recipients of Alcohol Education
distributions must provide annual documentation to the Board, describing
the activity for which those awarded funds are spent.
Our Board will request this report from our current recipient, the Town of Youngsville, to
document how they are utilizing these funds. For any future, new or different recipients, we
will develop a grant program.
Item 5: ABC Board should consider staggering Board Member Terms to
ensure no more than 2 term dates end each year.
One Board Members current term, currently our Chairman, will be extended by one year,
which will create the appropriate staggering of all Board Member terms and fulfill this request.
Item 6: Certificate of Accountability attestation form should be reviewed
and signed by Board Members and applicable personnel.
This has been signed and submitted back to the NC ABC Commission as of the time of this
response letter.
Sincerely,
!3 S -
Bridge lan1ey, GM
tf
Youngsville ABC Board
2
YOUNGSVILLE ABC BOARD I Response Letter to Perfonnance & Standards Audit - 2024
18
