ADHS Misallocated $1 Million from Medical Marijuana Program

A new audit has revealed that the Arizona Department of Health Services (ADHS) has misused almost $1 million to operate the state’s medical marijuana program. The audit claims that the funds were “misallocated.”

The auditor found two employees with salaries totaling nearly $131,000 which were paid for wholly by the medical marijuana fund even though those employees also worked on other programs, Arizona Capital Times reported.

The auditor also reviewed a sample of 65 of the 7,177 fiscal year 2018 expenditure transactions, totaling approximately $2.6 million. For 30 of the 65 transactions, totaling approximately $962,000, the ADHS paid the full cost of the transaction, however, other ADHS programs also benefited from the expenditures, resulting in a possible misallocation of funds.

The ADHS said, “The Department believes that monies for the [Medical Marijuana] Fund were spent in an allowable manner, and that payroll costs for the Fund were only charged for work employees performed on the Program. However, the Department recognizes that more formal processes should be in place.”

The ADHS further stated that the “ADHS is confident that all Medical Marijuana funds were spent in an allowable manner, and the report supports this by recognizing that all audited funds were spent on personnel and activities related to the program. While some expenditures may have benefitted other programs in addition to the Medical Marijuana program, the Department sees this as an advantage that also improves public health capacity for the citizens of Arizona.”