State audit: Columbus ABC store in black, but needs improvement

Published 12:27 pm Thursday, January 26, 2012

Strategies implemented to improve profits
Columbus officials learned after a state audit that the town’s ABC (Alcoholic Beverage Control) Store is not meeting state standards, especially in terms of profitability.
The N.C. ABC Commission conducted a performance audit of the Columbus ABC store last year and made recommendations on how the store can increase its profits. One of those recommendations was that the ABC store should consider merging with another store.
In 2010, the N.C. General Assembly approved legislation that increased accountability of local ABC boards to their appointing authorities and to the state ABC Commission. Columbus’ audit was a routine procedure because the legislation called for audits of all ABC systems in the state. Currently 15 to 20 audits per year are being performed, with 10 already completed, according to N.C. Alcoholic Beverage Control Commission Public Affairs Director Agnes Stevens.
Stevens said the Columbus store is currently in the black, “but it does face challenges in improving profit percentage to sales as highlighted in the audit.”
Columbus Town Council met Thursday, Jan. 19 and expressed concern over the audit.
“I am very displeased at some of the findings,” said Columbus Mayor Eric McIntyre. “We need to let the ABC board know we are not happy with what we see.”
The town is sending the ABC board a letter stating the board needs to take action.
The ABC board already answered the audit in what changes it has made and will make. The response included steps the store plans to take to better meet profit margins, that the board is currently seeking a finance officer and that the board is currently looking into a merger.
The audit found that the Columbus store’s inventory turnover rate does not meet the target rate set by the ABC Commission and that the store does not meet the operating cost ratio recommended by the state.
“The Columbus ABC Board has an operating cost ratio of 0.91 while the average for similar boards is 0.77 or less,” the audit says. “In comparing with other single store boards with MXB (mixed beverage) sales, Columbus’ operating expenses are not out of line; however, sales are not sufficient to absorb all expenses. Overhead expenses are high, in this case, because of rent.”