A March 28 audit report by California State Auditor Grant Parks has found gaps in the way the city of San Diego hands out pot permits, raising the specter of incipient corruption. “Because San Diego did not maintain the records of applications for adult-use cannabis permits, we were unable to accurately identify the number of applications,” says the document.

In addition, per the report, “Of the six local jurisdictions we reviewed, four – the cities of Fresno, Sacramento, South Lake Tahoe and the county of Santa Barbara ­­— have chosen to require a competitive process that requires scoring of permit applications for either all or some permit types. The remaining two local jurisdictions — Monterey County and the city of San Diego — have chosen not to require a competitive process that scores applications.”

Raising more doubts about the selection process, San Diego and three other jurisdictions “did not require individuals involved in reviewing cannabis business applications to sign impartiality statements.” Notes the report: “In any process that requires impartiality or that may be susceptible to bias, it is important to consider and implement safeguards, such as using impartiality statements, to prevent undue influence and strengthen confidence in the integrity of the process.”

The auditors went on to say that “We were unable to verify the completeness of the list of applications at San Diego because it did not maintain a comprehensive list of applications it received for adult‑use cannabis businesses. Further, San Diego did not maintain the records for applications in a cannabis-specific location in storage, which did not allow us to manually search for the applicable applications.”

San Diego’s background checks were also spotty, though the auditors credited the city for some recent computer changes. “San Diego could not demonstrate before December 2021 that it followed its documented process for ensuring that applications were complete. San Diego’s policy states that its minimum submittal requirements checklist establishes the minimum details that must be included in all plans and documents required to be included in the application and that staff will review applicants’ documents against this checklist.

“For applications submitted before December 2021, San Diego simply entered into its tracking database the date the application was deemed complete. However, for 13 of the applications we reviewed, San Diego could not provide evidence that it followed its policy to compare the applications to the checklist, all of which were submitted before December 2021.

“San Diego’s project manager stated that the local jurisdiction’s adoption of an online permitting process in December 2021 has improved its documentation and record retention. In fact, we reviewed seven applications that San Diego received after December 2021 and verified that city staff had performed appropriate checks for completeness using the online system.”

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