“What occurs when there’s a lack of transparency is that it impacts our potential to set our legislative agenda.”
By David Abbott, Arizona Mirror
The Arizona Division of Well being Providers has but to enact wanted modifications to the way it manages the state’s medical marijuana fund that state auditors advisable three years in the past, the auditors stated in a report launched final month.
The Arizona auditor normal issued an update to its 2019 audit of ADHS’s administration of the medical marijuana fund, and located ADHS has been sluggish to enact modifications that might tackle the misallocation of funds that had been used to pay some salaries within the division.
Whereas ADHS has adopted many of the suggestions specified by 2019—equivalent to addressing well timed revocation of medical marijuana certifications for sufferers who violated the 2010 Arizona Medical Marijuana Act (AMMA); performing medical marijuana facility inspections, and addressing complaints and noncompliance points—the division has but to adequately audit its charge construction and tackle funding allocations for particular makes use of outlined in hashish laws.
The audit discovered that, below the management of former Director Cara Christ, ADHS had not developed enough written insurance policies and procedures that might “assist decide whether or not an expenditure is allowable and whether or not it needs to be allotted to the fund,” and guarantee staff documented time spent on duties associated to its administration.
“The Division paid some worker salaries from the Fund though they labored on non-Program obligations throughout not less than one of many pay durations we reviewed,” the auditors reported. “The extent and influence of payroll expenditures being incorrectly allotted to the Fund is just not identified, incorrectly allocating expenditures additional decreases out there monies within the Fund for Program operations and different statutorily required or permitted makes use of, equivalent to for statutorily approved medical trials and proficiency testing, which the Division has not but allotted nor spent Fund monies on in fiscal 12 months 2022.”
ADHS additionally has not assessed or adjusted its charge construction for the reason that AMMA was applied in 2011.
“With out this evaluation, the Division doesn’t have the knowledge it could must set its charges at quantities that might enable it to get well its prices for working the Program and never accumulate pointless fund balances,” the report states. “The Division additionally reported that it doesn’t but have sufficient data to find out whether or not Program charges needs to be modified as a consequence of current modifications that influence the Fund’s steadiness, such because the legalization of leisure marijuana and statutory necessities which have required the Division to switch monies from the Fund for varied functions.”
The AMMA, which legalized the usage of medical marijuana in Arizona, was handed by voters in 2010. Because it was a voter initiative, cash within the medical marijuana fund is protected and may solely be used for functions outlined within the AMMA. The funds are supplied primarily by medical certification and dispensary licensing charges, in addition to civil penalties imposed and donations, in line with the statute.
In 2020, voters accredited Proposition 207, legalizing adult-use of hashish. However that added additional pressure on the medical marijuana fund by shifting $45 million to varied state companies, from regulation enforcement to lecturers’ grants to public security. That cash was largely aimed toward implementing the adult-use program.
Based on the report, the fiscal year-end steadiness within the marijuana fund elevated every year between fiscal years 2016 and 2020, peaking at greater than $91.7 million on the finish of fiscal 12 months 2020.
Since then, it has decreased to an estimated $48.2 million for the fiscal 12 months that ended on June 30. Resulting from expenditures and transfers, that quantity is anticipated to drop to about $22 million.
“A mixture of declining revenues; outflows, consisting of expenditures and required transfers to different companies or funds, exceeding revenues; and up to date statutory modifications that limit the usage of some Fund monies to particular functions have led to a lower in Fund monies out there for the (AMMA’s) functions,” the report states.
Fiscal 12 months 2022 revenues are estimated to complete about $12.4 million, however projections for Fiscal 12 months 2023 decline to $10 million. Based on ADHS studies, the variety of qualifying sufferers within the medical marijuana program decreased from 299,054 in January 2021 to 191,682 in Could 2022.
In mid-2020, ADHS applied a rule extending the lifetime of medical marijuana playing cards to 2 years with the intention to cut back prices to sufferers, and that has additionally had an impact on the amount of cash within the fund.
One other probably giant pressure on the fund is a 2021 regulation devoting $25 million over 5 years to marijuana analysis on the efficacy of hashish to deal with ache and a myriad of different illnesses.
Issues with the medical marijuana fund can have hostile results on shoppers and hashish advocates working to enact coverage that advantages grownup hashish customers and sufferers.
Arizona Nationwide Group for the Reform of Marijuana Legal guidelines (AZNORML) Government Director Mike Robinette says a “lack of transparency” can have an effect on the group’s legislative agenda when it’s not clear how a lot is within the fund.
“What occurs when there’s a lack of transparency is that it impacts our potential to set our legislative agenda,” he informed the Arizona Mirror. “One of many massive issues we tried to do that 12 months was cut back card charges, however not figuring out (how a lot is in) the fund makes it unimaginable.”
For example, Robinette pointed to the newest legislative session, the place AZNORML advocated for laws that might have completed away with certification charges for Arizona’s veterans, which failed within the last minutes of the session.
It additionally may probably have an effect on the way forward for analysis in Arizona.
“Since HB 2298 contained $5 million in annual funding for authentic medical trials, we have now to ask the query, is that an unfunded mandate?” he stated, referring to the 2021 regulation allocating $25 million for analysis. “We didn’t know the place the fund was, so we didn’t know if 2298 was funded.”
In a press release to the Mirror, ADHS spokesman Tom Hermann wrote, “We’re finishing the implementation of the Auditor Basic’s suggestions and we will probably be working with the Auditor Basic to make sure that our Division is satisfying factors talked about within the report.”
The auditor normal’s workplace will conduct one other follow-up on the division’s progress in six months.